Sports Direct’s share price fell this morning as it delayed the release of its annual results ahead of today’s annual general meeting with shareholders.
Billionaire Mike Ashley was due to release results for his company at 7am ahead of the London Stock Exchange’s open at 8am.
Sports Direct had already delayed their publication from 15 July, warning investors of a hit from its House of Fraser acquisition.
Its auditor, Grant Thornton, is also under scrutiny.
However, shortly before 9am Sports Direct had still not published its results, sending its share price down 2.6 per cent to 233p.
It promised an update at midday, but that was simply an email to journalists to say: “We are currently still finalising our preliminary results and will update you again at 14:00.”
Investor advisory firm Pirc made its displeasure clear, saying: “We were amongst the investors and analysts who wasted their time attending the Sports Direct briefing this morning that was cancelled at the last minute.
We were amongst the investors and analysts who wasted their time attending the Sports Direct briefing this morning that was cancelled at the last minute. It would be nice to say this was out of character, but… #CorpGov #stewardship— PIRC (@PIRC_news) July 26, 2019
CMC Markets analyst David Madden said: “A delay on a delay isn’t a good look, and it suggests the company doesn’t have its act together.”
Journalists preparing to attend Sports Direct’s AGM in London expressed their confusion on Twitter.
Outside the firm’s Oxford Street offices, City A.M. correspondent Seb McCarthy reported that people were being rushed in and out of the building but with no explanation for media as to the reason for the delay.
The company earlier released a statement to say: “Unfortunately we are still finalising our preliminary results.
“We anticipate that our annual results will be still be [sic] released today, with a presentation to follow, and will update again at midday.
“Apologies for any inconvenience.”
‘Total disregard’ for shareholders
“It’s a total and utter shambles and betrays a number of problems at the business after Ashley embarked on his rather random acquisition spree,” said Neil Wilson, chief analyst at Markets.com.
“Above all it betrays a total disregard for shareholders.”
Wilson also raised the prospect of whether Ashley could seek to take the company private, with the delays raising fears over the state of Sports Direct’s balance sheet.
Previously shares dived on 15 July as it revealed it would delay the publication of its results due to uncertainty around House of Fraser. It also warned it would miss guidance given in December.
“House of Fraser must be losing money hand over fist,” Wilson added.
Sports Direct has since said it would hit December guidance, but the chaos besetting investors has raised questions over whether Ashley’s core business “has missed the mark”, the analyst said.
Can Sports Direct’s share price recover?
Hilary Ross, head of retail, food and hospitality at law firm DWF, called the factors behind today’s delay “a perfect storm”.
“The purchase of the distressed House of Fraser broke with Sports Direct’s model of discount and value,” she said.
“Ashley has also had to deal with the departures of several trusted lieutenants from his management team. Given it has also been yet another year of challenging trading conditions, it is looks like Sports Direct’s internal resources have been stretched to breaking point.”
She questioned how quickly the retailer’s shares will recover after the publication of what are expected to be a poor set of results.
Main image credit: Getty