// Sports Direct insists it is confident a €674 million tax bill in Belgium is close to being resolved
// Half-year revenues increased 14% to £2bn
// Half-year pre-tax profits up 160% to £193m
Sports Direct has insisted it is starting to see green shoots of recovery at department store House of Fraser, which it purchased from administrators for £90 million last year.
The company, controlled by retail tycoon Mike Ashley, also said a €674 million (£561 million) tax inquiry into unpaid VAT in Belgium is also progressing well and bosses expect a decision on €491 million to be made by early next year.
The revelations come as the business, which has snapped up several under-performing high street names in the past year or so, saw sales jump 14 per cent to £2 billion in the six months to October 27.
Meanwhile, pretax profits surged 160 per cent to £193.4 million.
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Ashley used his company’s half-year results as an opportunity to attack his rivals, regulators and politicians over some of the scandals that have unravelled at businesses where Sports Direct had been a shareholder, such as Debenhams.
He also made a parting shot at outgoing Labour leader Jeremy Corbyn, who attacked Ashley and other rich businessmen throughout the election campaign.
Ashley said: “Mr Corbyn attacked our business during the election campaign, but he really should have checked his facts as he really was shown to be ‘clueless’.
“He clearly has zero awareness of the fact we are one of the very few groups, and also one of the first, to have a workers representative as a statutory director of the group.”
Ashley also added that a planned meeting with shareholders from advisory group Pirc was scrapped due to Corbyn making “it completely untenable for anyone associated in any way with the Labour Party – or any of its key supporters and supporting organisations – to be allowed access to such key and confidential meetings and the information divulged within them”.
Finally, Ashley demanded that restructuring advisers should be regulated, adding the sector had “become the wild west in terms of deceit, dishonesty and self interest”.
In terms of sales, it was a strong period for Sports Direct, as it focused on its “elevation” strategy of improving stores and winning over big-name brands to be able to sell its most popular products.
Sales in its UK sports retail business, which includes Sports Direct, Jack Wills, Game Digital, Evans Cycles and Sofa.com, rose 6.7 per cent to £1.2 billion, although this growth mainly came from takeovers.
When stripped out, sales fell 8.6 per cent, with bosses saying this was due to “the continuing elevation strategy”.
On House of Fraser, Sports Direct insisted “green shoots of recovery” were starting to emerge.
Ashley added that recent sales have held up well during Christmas, but warned: “We are doing as much as we can to realistically save as many jobs and stores as possible however, despite our best efforts, there are still a number of stores which are currently paying zero rent and that are unprofitable and thus not sustainable.”
The last six months has been relatively stable for Sports Direct, compared with previous periods.
At its full-year results earlier this year, publication was delayed after management clashed with auditors over the Belgian tax bill.
However, Ashley said the matter was close to being resolved.
He said tax authorities have written to him saying “they are satisfied that they have all the information they require from Sports Direct and that they are satisfied that VAT has been correctly accounted for in the information they have reviewed so far”.
An initial decision will be made by the authorities early next year, he added.
Bosses have also endured the fallout from a major accounting scandal at Goals Soccer Centres, which remains under police investigation.
Later today, Sports Direct shareholders are set to meet for a general meeting to vote on whether the firm rebrands as Frasers Group.
Sports Direct said the rebrand has been proposed to “reflect the changing profile and consumer proposition of the group” amid a continued effort to improve its image.
The move comes amid plans to launch a new lifestyle store chain called Frasers on the high street within the new financial year.
Should the rebrand be approved, Frasers Group would encompass Sports Direct, House of Fraser, Flannels, Evans Cycles, Jack Wills, Sofa.com, Game Digital, USC, and Frasers.
with PA Wires
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