Mike Ashley’s Business On Track For Record Profits


Newcastle United owner Mike Ashley’s sportswear business Sports Direct International is expected to be on track for record profits when the company announces its interim results this week.

Mike  Ashley 999

Mike Ashley – Sports Direct on track for record profits

In the last financial year,  Sports Direct had pre-tax profits of £154M,  and the company is expected to beat that figure by 34% this year and reach £207M in pre-tax profits.

Sports Direct International is owned by Mike Ashley, and the results in part will be boosted by the group buying 20 of rival JJB’s shops from bankruptcy (administration).

Richard Chamberlain is an analyst at Bank of America, and he expects strong financial results when the announcement is made this Thursday – that’s when Newcastle will play the second leg of their Europa League tie with Metalist Kharkiv in the Ukraine.

In the first six months of this financial year,  Sports Direct had revenues that were up 22.5%, after good business from the London Olympics, but a new chain could emerge to challenge Sports Direct after the complete collapse of their main rival JJB – and this is what Richard Chamberlain had to say about that possibility:

“We think any such chain would most likely be at a disadvantage to Sports Direct in terms of range of merchandise and brand scale.”

Any new competitor is always a disadvantage to any company, but in an update from the company two months ago, they were looking at the possibility of introducing a new bonus scheme, after a previous scheme was voted down in a shareholder meeting last summer.

In fact the earnings for the next two financial years has now been increased by £20M to a total profit target of £360M in 2015.

Mr Ashley does not receive a salary but receives a bonus, and when his company went public back in February of 20007 – four months before he bought Newcastle –  he received £929M from selling 43% of the business he had founded by himself in the 1980s.

Mr. Ashley is now worth close to twice that amount, and not only are Sports Direct on a good financial footing,  but so are Newcastle United,  who are expected to break even in their latest financial year – which ended at the end of June last year.

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8 comments so far

  • Jail for Ashley

    Feb 18, 2013 at 4:22 AM

    Comment #1

    Fat barsteward.

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  • NEWEXPATMAGPIE

    Feb 18, 2013 at 5:41 AM

    Comment #2

    The guy is loaded !

    But he is still so tight he could,nt spare a pawltry few Mil to strenghen the squad of his play-thing in the Summer Transfer round?

    Can,t say i,me surprised?

    0
  • shanghai fan

    Feb 18, 2013 at 7:23 AM

    Comment #3

    Before everyone jumps on the “he’s loaded, so why is he so tight” bandwagon lets get some things clear.

    What he is worth is not the same as what he has available to spend.

    E.g. His 57% remaining shareholding is an illiquid asset. He can’t spend it unless he sells it. Similar to a house for example. If my house is worth 1m, it doesn’t mean I have that cash spare to spend.

    On the amount that he did earn, when you net out taxes, investment bank fees on an IPO, and other expenses, it will be a lot less.

    And as any good businessman knows, you diversify. So if he has made say 600m on the sale and allocated 100m plus to nufc, which I am sure must be after buying it out and restructuring the debt, plus transfers, then it’s easier said then done to invest more.

    I am a nufc fan through and through, but hate it when I read these comments of xyz spend more etc. but then that’s the difference if its not your money I guess, easy to complain till the cows come home.

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  • Jonas's better than Messi

    Feb 18, 2013 at 7:54 AM

    Comment #4

    @shanghai fan

    Quite right.
    These estimates of his worth multiply his share holdings by the current market price.

    As soon as he started selling the share price would start falling. If he sold too much stock without explanation the price would collapse.

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  • davis_toons

    Feb 18, 2013 at 8:17 AM

    Comment #5

    Do agreed Mike have done alot better in term of controlling financial of this club. Its the back bone.

    Will be good for the club in the longer run.

    Thanks Milke…hope we can move on to much bigger things in sight.

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  • Graeme

    Feb 18, 2013 at 8:33 AM

    Comment #6

    Hopefully, the more successful MA is, the more successful we will become in the future!!

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  • Troy Stavers

    Feb 18, 2013 at 8:39 AM

    Comment #7

    I do you recall Ashley stating he would invest £20m a season into the club but then there was a market crash and he lost half his wealth.

    He has clawed that back again now. Nice to see him return to his promise.

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  • LocalZero

    Feb 18, 2013 at 7:39 PM

    Comment #8

    Love the fact that some people on here think he’s tight. If he wasn’t careful with his money he wouldn’t have made any and now he can live the life he wants. It’s the same with NUFC. We’re still not actually making any money but people seem to want him to spend millions. He’s made mistakes but if there’s one thing he does know it’s how to create a profitable business. How many of us can say that we know that better than him?

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