Sports Direct is in the hot seat again this week

 
Helen Cahill
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General Views of Sports Direct Shops
Analysts expect the company to say its profits have fallen (Source: Getty)

Sports Direct will be in the spotlight again this week as it reports its interims on Thursday.

Analysts are predicting chief executive Mike Ashley will announce a profit fall of 25 per cent to £170m. The City will also be looking for signs that Sports Direct is improving its corporate governance, something the retailer promised to focus on at its last annual general meeting.

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Canaccord Genuity analysts said: "We believe Sports Direct's wounds are self-inflicted. The lack of dollar hedging for the financial year of 2017 has been hugely painful.

"If understanding the various operational challenges of the business were not hard enough, the corporate governance saga has become a huge barrier to entry for most investors.

"Sports Direct was always tightly run, but with the loss of the chief executive and acting chief financial officer and no influx of new management, it is questionable as to whether Mike Ashley has the resources to fight all the fires he has, both within his company and externally from a PR perspective."

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Former chief executive Dave Forsey exited the company in September, leaving Ashley to take up the top job. Forsey was followed shortly after by Sports Direct's acting chief financial officer, Matt Pearson, who oversaw the company's failure to hedge for currency movements. Pearson's oversight resulted in a £35m hit to the company.

The Sunday Telegraph has reported that the company will announce it has hired two City figures to plug the holes in its board - and to reassure worried City investors, who have been calling for change in how Sports Direct is run.

Now, the retailer is also facing an accounting probe by the Financial Reporting Council (FRC) after it emerged Sports Direct has not reported a link to a delivery company run by his brother.

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