Mike Ashley to reveal Sports Direct's lowest profits in six years

Alys Key
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Mike Ashley will take a break from his ongoing legal battle to face down investors (Source: Getty)

Sports Direct is set to reveal its lowest profits for six years this week, as founder Mike Ashley struggles to convince investors of his "Selfridges of Sport" ambitions for the company.

The firm is expected to say that pre-tax profits have more than halved to £126m compared with £275m the year before, when it announces annual results on Thursday.

Despite an increase in overall sales from £2.9bn to an expected £3.2bn, City analysts predict a shrinking profit margin will hit the company's bottom line.

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The company was badly hit by the drop in the value of sterling after it failed to hedge against it, while the costs of expansion are also expected to be a factor.

"The danger here is that we see big downgrades and no prospect of a medium-term profit bounceback," said Peel Hunt analyst Jonathan Pritchard. "The clear reality is that this whole 'Selfridges of Sport' process would be much easier for Mr Ashley to execute if he was away from the scrutiny of the press, shareholders and the likes of us."

Ashley has previously professed his desire for the company to become the "Selfridges of Sport" and embarked on a series of acquisitions, the most recent being in struggling video game retailer Game Digital.

But analysts are worried that this could distract from the challenges facing the core business.

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