British retailer Sports Direct has delayed revealing its annual results, warning issues integrating its purchase of House of Fraser stores and tight scrutiny of its accounts could have an effect on the financial steering it gave in December.
Shares in the firm, managed by Newcastle United soccer club proprietor Mike Ashley, plunged up to 14% to a seven-month low of 226.2 pence in early Monday trading.
Sports Direct termed trading in December as “unbelievably bad.” While it didn’t give an update on its core sporting items stores on Monday, it referred to complexities in integrating the House of Fraser chain it acquired last year and “uncertainty as to the long run trading efficiency of this business.”
Sports Direct’s core chain has been a comparatively flexible performer in recent years, in contrast with a string of British retailers that have collapsed in the face of subdued client spending and a move to shopping online.
Nonetheless, the group has further engaged in a raft of dealmaking that has complicated the trade. It lately frolicked trying – and failing – to buy department stores group Debenhams, after acquiring House of Fraser out of administration in 2018.
On Monday, the corporate said it now controlled video gaming retailer Game Digital, “thereby adding to the complexity of the trade,” per Bubb.
Sports Direct, which is 61% held by Ashley, said the timing of its results was affected by assessment by Britain’s accounting firm of Grant Thornton’s audit of the firm’s results for the year ended April 29, 2018.
It stated that meant the company needed to compile more info than in earlier years.