Mike Ashley, the boisterous billionaire owner of Sports Direct, yesterday pledged to become a “good guy on corporate governance” as the retailer saw its full-year profits halve as consumers tightened their spending.
The retailer’s lack of transparency in failing to provide like-for-like sales in its quarterly results has been heavily criticised by City analysts. But yesterday Ashley defended the move, saying they would not have been helpful because seasonal promotions would not have been included.
“We’ve now given you like-for-likes based on a true model. It includes likes and margins, which is useful and not some made up bullshit,” the Newcastle United owner said. He added: “We want to be good guys on corporate governance. We’ve started with the likes and we’ll slowly climb uphill from there.”
The retailer, which Sports World and Lillywhites, blamed the dismal weather, England’s failure to qualify for Euro 2008 and the credit crunch for a 6.5 per cent slump in revenues to £1.26bn, in its first year as a public company. Underlying pre-tax profits halved to £85m.
Ashley said it was the worst trading environment he’d seen in 25 years and was unlikely to improve over the next two years. “Customers were being very choosy about the products they now buy. We have to get the products and the pricing exactly right.”
Oriel Securities analyst Jonathan Pritchard downgraded the stock to a hold, saying: “The market in which it is trading is so tough at the moment that we believe only the very best brands will manage to hold EBITDA, and Sports Direct is not one of them.”