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 – 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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