Sports Direct raises Ashley’s payout plans

 
City A.M. Reporter
MIKE Ashley, the billionaire founder of Sports Direct, could net a one-off shares bonus worth about £24m at current prices after Britain’s biggest sporting goods retailer raised a proposed payout.

Sports Direct said yesterday it would ask shareholders at its annual meeting in September to back the granting of 8m shares to Ashley, up from the 6m shares proposed in December.

Ashley holds 71 per cent of the company’s equity and is executive deputy chairman. He does not take a salary and generates significant free advertising for the company through his ownership of high-flying English Premier League soccer club Newcastle United.

A spokesman for Sports Direct said the increase in the proposed payout reflects the imposition of tougher performance criteria, which have to be met for the shares to vest in 2018.

The firm must generate underlying earnings before interest, tax, depreciation and amortisation (Ebitda) of £270m, £290m and £340m in the 2012-13, 2013-14, 2014-15 years respectively, and have a net debt/Ebitda ratio of 1.5 times or less in 2015.

News of the proposed payout came as Sports Direct posted a 13.2 per cent rise in fourth-quarter sales and said it was eyeing a boost to trade from this summer’s landmark events, sending its shares up two per cent.

“We remain positive about the group’s outlook and are excited about the summer ahead with the Diamond Jubilee, Euro 2012 and the London Olympics,” said chief executive Dave Forsey.

Total sales were £267.6m in the nine weeks to 25 March, up from £236.4m in the same period last year. That compared with a third-quarter rise of 9.1 per cent.

Sports Direct, which owns Sports World and Lillywhites stores as well as brands including Slazenger and Dunlop, said gross profit increased 13.5 per cent to £99.8m.

The firm said in February it would reach its earnings target of £225m for the year to 29 April.

Mike Ashley is in line for a share bonus of £24m