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Sports Direct warns of falling profits ahead of AGM showdown – business live Sports Direct warns of falling profits ahead of AGM showdown – business live
(35 minutes later)
10.22am BST
10:22
My colleague Sarah Butler will be covering the AGM action for us - here’s the scene outside Sports Direct’s HQ:
News crews aplenty outside Sports Direct HQ ahead of the AGM this morning.. I'll be live tweeting pic.twitter.com/1asm8rzMW1
Lisa Nathan of campaign group ShareAction is also there:
A crowd of cameras outside the #SportsDirectAGM. Set to be an exciting day at #SportsDirect HQ in Shirebrook. pic.twitter.com/edd71srdvl
This is from The Times’s Deirdre Hipwell:
Media scrum starting to assemble at the sports direct annual meeting ... pic.twitter.com/Qf20ybwbzd
Updated
at 10.22am BST
10.08am BST
10:08
The Sports Direct AGM kicks off (literally and metaphorically) in around 50 minutes, at 11am BST.
According to the schedule, the board will spend 45 minutes presenting their report to shareholders, and the ‘interested parties’ who are also welcome to attend.
A 30-minute question-and-answer session will follow -- although I’m not sure that will be enough time for all the issues to be raised.
Then the first tour of the Shirebrook warehouse will begin, followed (after a brief lunch) by the presentation (which you, dear readers, can see online here).
Sports Direct have allotted just half an hour for lunch at today's AGM and investor meeting — controversial pic.twitter.com/Ca9xzKUVII
MA = founder Mike Ashley;
DF = Dave Forsey, the CEO, who was blamed for Sports Direct’s mistakes in the review published yesteday.
9.51am BST9.51am BST
09:5109:51
Boom! Another Sports Direct investor has announced it will vote against the board at today’s AGM.Boom! Another Sports Direct investor has announced it will vote against the board at today’s AGM.
More pressure on Sports Direct: Railways pension scheme votes against all directors. Says it's a big decision but has lost faith in board.More pressure on Sports Direct: Railways pension scheme votes against all directors. Says it's a big decision but has lost faith in board.
9.46am BST9.46am BST
09:4609:46
Photos from the AGMPhotos from the AGM
It’s pretty busy at Sports Direct’s Shirebrook HQ this morning, as executives and reporters arrive for the AGM.It’s pretty busy at Sports Direct’s Shirebrook HQ this morning, as executives and reporters arrive for the AGM.
Chairman Keith Hellawell gave reporters a cheery “Morning”, but didn’t discuss his resignation offer.Chairman Keith Hellawell gave reporters a cheery “Morning”, but didn’t discuss his resignation offer.
Sports Direct chairman Keith Hellawell arrives at the company's AGM in Shirebrook pic.twitter.com/OSq2hLEHy4Sports Direct chairman Keith Hellawell arrives at the company's AGM in Shirebrook pic.twitter.com/OSq2hLEHy4
SPD’s employees have also been arriving for work:SPD’s employees have also been arriving for work:
9.40am BST9.40am BST
09:4009:40
The Telegraph’s Ashley Armstrong sums up the morning....The Telegraph’s Ashley Armstrong sums up the morning....
This morn we've already had a profit warning, a cap ex hike, an offer from the chairman to resign & Sports Direct's AGM hasn't even startedThis morn we've already had a profit warning, a cap ex hike, an offer from the chairman to resign & Sports Direct's AGM hasn't even started
9.40am BST9.40am BST
09:4009:40
Sports Direct’s shares are still being hammered in the stock market, and are currently down almost 10%.Sports Direct’s shares are still being hammered in the stock market, and are currently down almost 10%.
Investors aren’t impressed by its warning of falling profits and chairman’s Hellawell’s failed attempt to resign.Investors aren’t impressed by its warning of falling profits and chairman’s Hellawell’s failed attempt to resign.
Analyst Joshua Raymond of XTB.com explains:Analyst Joshua Raymond of XTB.com explains:
“Investors rapidly sold out of Sports Direct shares as the UK market opened after a double whammy of bad news this morning.“Investors rapidly sold out of Sports Direct shares as the UK market opened after a double whammy of bad news this morning.
First and foremost, the retailer expects profits to fall by 20%, with underlying earnings expected around £300m, marking a fall of £81m from a year ago. And secondly the fact the firm rejected Chairman Dr Keith Hellawell’s resignation. Shareholders have long felt that the firm is held too tightly under Mike Ashley’s grip and Chairman Hellawell has been unable to wield the sufficient power needed to make the radical changes required. So news of this rejection ultimately raises the feeling amongst larger shareholders such as Legal and General that Sports Direct will continue to operate with a Chairman that lacks sufficient influence.”First and foremost, the retailer expects profits to fall by 20%, with underlying earnings expected around £300m, marking a fall of £81m from a year ago. And secondly the fact the firm rejected Chairman Dr Keith Hellawell’s resignation. Shareholders have long felt that the firm is held too tightly under Mike Ashley’s grip and Chairman Hellawell has been unable to wield the sufficient power needed to make the radical changes required. So news of this rejection ultimately raises the feeling amongst larger shareholders such as Legal and General that Sports Direct will continue to operate with a Chairman that lacks sufficient influence.”
9.33am BST9.33am BST
09:3309:33
Here are some more slides from this afternoon’s presentation, showing how Sports Direct will implement its turnaround plan:Here are some more slides from this afternoon’s presentation, showing how Sports Direct will implement its turnaround plan:
9.30am BST9.30am BST
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The prospect of Sports Direct becoming the new Selfridges has caused some mirth on social media...The prospect of Sports Direct becoming the new Selfridges has caused some mirth on social media...
..@NickBubb1 @whatbutlersaw how about the Newcastle of retail ??..@NickBubb1 @whatbutlersaw how about the Newcastle of retail ??
Mike Ashley you craaaazy ! #sportsdirect have more chance of becoming like #Selfridges than #Asda have of being the #Harrods of food! #neverMike Ashley you craaaazy ! #sportsdirect have more chance of becoming like #Selfridges than #Asda have of being the #Harrods of food! #never
@NickBubb1 @whatbutlersaw if it could just be a sports retailer without chewing gum embedded in the carpet that would be a good start@NickBubb1 @whatbutlersaw if it could just be a sports retailer without chewing gum embedded in the carpet that would be a good start
9.15am BST9.15am BST
09:1509:15
Sports Direct: We want to be like SelfridgesSports Direct: We want to be like Selfridges
Mike Ashley is going to declare today that Sports Direct hopes to be the Selfridges of sports retail by the end of the decade.Mike Ashley is going to declare today that Sports Direct hopes to be the Selfridges of sports retail by the end of the decade.
Yes, you read that right.Yes, you read that right.
Here’s a slide from the presentation which Ashley will give at today’s Open Day at 2pm (agenda here):Here’s a slide from the presentation which Ashley will give at today’s Open Day at 2pm (agenda here):
We can’t fault Ashley’s ambition, in the face of the revelations of unacceptable working practices behind the scenes at Shirebrook.We can’t fault Ashley’s ambition, in the face of the revelations of unacceptable working practices behind the scenes at Shirebrook.
He recently set himself the target of emulating John Lewis - so Selfridges would be an even bigger stretch (Sports Direct Food Hall, anyone?).He recently set himself the target of emulating John Lewis - so Selfridges would be an even bigger stretch (Sports Direct Food Hall, anyone?).
At this rate he’ll be gunning for Harrods by Christmas....At this rate he’ll be gunning for Harrods by Christmas....
9.02am BST9.02am BST
09:0209:02
Despite Sports Direct’s efforts to turn over a new leaf, it is still employing Mike Ashley’s daughter’s boyfriend to run its property arm.Despite Sports Direct’s efforts to turn over a new leaf, it is still employing Mike Ashley’s daughter’s boyfriend to run its property arm.
The company says today that:The company says today that:
As previously disclosed, our Property team will continue to be led by Michael Murray and any remuneration will be decided at the Board’s discretion.As previously disclosed, our Property team will continue to be led by Michael Murray and any remuneration will be decided at the Board’s discretion.
Murray, who recently pulled off a £108m property deal on Oxford Street, could potentially earn 25% of the value created by his team. Some commentators have pointed out that he doesn’t have immense experience, as he’s only in his mid-twenties.....Murray, who recently pulled off a £108m property deal on Oxford Street, could potentially earn 25% of the value created by his team. Some commentators have pointed out that he doesn’t have immense experience, as he’s only in his mid-twenties.....
To kick things off Sports Direct statement saying chairman Hellawell is staying and Ashley's daughters boyfriend will still run properly..To kick things off Sports Direct statement saying chairman Hellawell is staying and Ashley's daughters boyfriend will still run properly..
8.48am BST8.48am BST
08:4808:48
Mike Ashley insists that, despite much City chatter, he isn’t planning to take Sports Direct private again.Mike Ashley insists that, despite much City chatter, he isn’t planning to take Sports Direct private again.
The company says:The company says:
Further to the statement made in the Company’s preliminary results announcement on 7 July 2016, and in response to repeated speculation, Mike Ashley has confirmed to the Board that it remains the case that he has no current intention to take the Company private, and has indicated his willingness for the Company to confirm this statement publicly.Further to the statement made in the Company’s preliminary results announcement on 7 July 2016, and in response to repeated speculation, Mike Ashley has confirmed to the Board that it remains the case that he has no current intention to take the Company private, and has indicated his willingness for the Company to confirm this statement publicly.
8.33am BST8.33am BST
08:3308:33
Our retail writer Sarah Butler explains why Sports Direct is less profitable....Our retail writer Sarah Butler explains why Sports Direct is less profitable....
Sports Direct also warns that profits hopes dropped to £300m from £380m because of lower gross margins and higher operating costs..Sports Direct also warns that profits hopes dropped to £300m from £380m because of lower gross margins and higher operating costs..
8.21am BST8.21am BST
08:2108:21
Veteran retail analyst Nick Bubb is alarmed by Sports Direct’s new profit forecasts:Veteran retail analyst Nick Bubb is alarmed by Sports Direct’s new profit forecasts:
Ouch: Sports Direct warn that EBITDA will fall from £380m to £300m this year...Ouch: Sports Direct warn that EBITDA will fall from £380m to £300m this year...
8.16am BST8.16am BST
08:1608:16
This chart shows how Sports Direct shares have taken an early dive:This chart shows how Sports Direct shares have taken an early dive:
UpdatedUpdated
at 8.17am BSTat 8.17am BST
8.09am BST8.09am BST
08:0908:09
Sports Direct shares plungeSports Direct shares plunge
OUCH! Shares in Sports Direct have fallen sharply at the start of trading.OUCH! Shares in Sports Direct have fallen sharply at the start of trading.
They tumbled by up to 10%, before stabilising around 7% lower, at 325p. That more than wipes out yesterday’s 5% rally.They tumbled by up to 10%, before stabilising around 7% lower, at 325p. That more than wipes out yesterday’s 5% rally.
Investors clearly aren’t impressed with the news that profits will fall by a fifth this year.Investors clearly aren’t impressed with the news that profits will fall by a fifth this year.
The news that Keith Hellawell’s resignation has been rejected may not have improved the mood, given that so many shareholders had demanded his departure.The news that Keith Hellawell’s resignation has been rejected may not have improved the mood, given that so many shareholders had demanded his departure.
7.59am BST7.59am BST
07:5907:59
Sports Direct has also revealed that its profits will probably fall by 20% this year, in a statement to the City ahead of this morning’s AGM.Sports Direct has also revealed that its profits will probably fall by 20% this year, in a statement to the City ahead of this morning’s AGM.
It now expects to post underlying earnings of around £300m this financial year, down from £381m in 2015-16.It now expects to post underlying earnings of around £300m this financial year, down from £381m in 2015-16.
But that is also determined on achieving group sales growth of at least 9%, and only a small decline in profit margins.But that is also determined on achieving group sales growth of at least 9%, and only a small decline in profit margins.
7.37am BST7.37am BST
07:3707:37
Sports Direct chairman offered to resign!Sports Direct chairman offered to resign!
Sports Direct has just revealed that its chairman, Dr Keith Hellawell, offered to resign over the weekend!Sports Direct has just revealed that its chairman, Dr Keith Hellawell, offered to resign over the weekend!
But the offer was rejected -- with SPD’s board asking Hellawell to stay on and help improve the company.But the offer was rejected -- with SPD’s board asking Hellawell to stay on and help improve the company.
Here’s the statement issued to the City a few minutes ago:Here’s the statement issued to the City a few minutes ago:
Further to the Working Practices Report published by the Company yesterday, the Company announces that Dr Keith Hellawell QPM has been asked by the Board, which includes the Company’s majority shareholder, Mike Ashley, to continue in his role as Chairman.Further to the Working Practices Report published by the Company yesterday, the Company announces that Dr Keith Hellawell QPM has been asked by the Board, which includes the Company’s majority shareholder, Mike Ashley, to continue in his role as Chairman.
Dr Hellawell had offered to step down over the weekend in the light of the shortcomings highlighted in the report, but he will stay in his role in order to assist with making further improvements.Dr Hellawell had offered to step down over the weekend in the light of the shortcomings highlighted in the report, but he will stay in his role in order to assist with making further improvements.
Sports Direct statement says Hellawell been asked to stay on despite offer to resign ahead of shareholder vote..Sports Direct statement says Hellawell been asked to stay on despite offer to resign ahead of shareholder vote..
Hellawell, a former police chief constable and drug czar, has lost the confidence of some bigname investors recently - including Hermes, Legal & General, Aberdeen Asset Management and Royal London.Hellawell, a former police chief constable and drug czar, has lost the confidence of some bigname investors recently - including Hermes, Legal & General, Aberdeen Asset Management and Royal London.
But crucially, not Mike Ashley (who still owns 55% of the company).But crucially, not Mike Ashley (who still owns 55% of the company).
On Monday, my colleague Nils Pratley argued that a responsible chairman would have noticed the problems at Sports Direct, including paying staff below the minimum wage:On Monday, my colleague Nils Pratley argued that a responsible chairman would have noticed the problems at Sports Direct, including paying staff below the minimum wage:
Hellawell may get credit for offering to walk the plank - but some investors will surely demand a change today.....Hellawell may get credit for offering to walk the plank - but some investors will surely demand a change today.....
UpdatedUpdated
at 8.03am BSTat 8.03am BST
7.22am BST7.22am BST
07:2207:22
The agenda: Sports Direct AGM showdown with investorsThe agenda: Sports Direct AGM showdown with investors
Good morning.Good morning.
It’s time for Sports Direct’s board to face the music.It’s time for Sports Direct’s board to face the music.
After all the revelations about “Victorian workhouses”, “gulag” conditions and zero hour contract misery, Mike Ashley and his top lieutenants are about to hear from their critics as the troubled retail chain holds its Annual General Meeting with shareholders.After all the revelations about “Victorian workhouses”, “gulag” conditions and zero hour contract misery, Mike Ashley and his top lieutenants are about to hear from their critics as the troubled retail chain holds its Annual General Meeting with shareholders.
And it promises to be an absolute zinger of an AGM, which starts at 11am. City investors and unions alike are lining up to blast the company, which has become associated with some of the worst business practices in modern Britain.And it promises to be an absolute zinger of an AGM, which starts at 11am. City investors and unions alike are lining up to blast the company, which has become associated with some of the worst business practices in modern Britain.
Chairman Keith Hellawall will face particular criticism, with some big shareholders determined to vote against his re-election. Royal London Asset Management, for example, has warned that Hellawell’s position was “untenable”.Chairman Keith Hellawall will face particular criticism, with some big shareholders determined to vote against his re-election. Royal London Asset Management, for example, has warned that Hellawell’s position was “untenable”.
As you probably already know, Sports Direct admitted yesterday that it had let its warehouse workers down badly.As you probably already know, Sports Direct admitted yesterday that it had let its warehouse workers down badly.
It is now offering all its shop staff permanent contracts -- but not the 4,000 agency staff at its Shirebrook site in Derbyshire -- and pledging to pay over the minimum wage.It is now offering all its shop staff permanent contracts -- but not the 4,000 agency staff at its Shirebrook site in Derbyshire -- and pledging to pay over the minimum wage.
Guardian front page, Wednesday 7 September 2016: Sports Direct admits failure on zero hours pic.twitter.com/KqXmCPJyTMGuardian front page, Wednesday 7 September 2016: Sports Direct admits failure on zero hours pic.twitter.com/KqXmCPJyTM
Late last night, Mike Ashley issued an apology to staff for the ‘serious shortcomings’ at his company, and promised to appoint a workers’ representative to his board to help drive improvements.Late last night, Mike Ashley issued an apology to staff for the ‘serious shortcomings’ at his company, and promised to appoint a workers’ representative to his board to help drive improvements.
He said:He said:
“I have always believed that Sports Direct was built by the great people who work here. I therefore wish to apologise to you on behalf of myself and The Board for the shortcomings that have occurred in our working practices, which have been identified in the report.”“I have always believed that Sports Direct was built by the great people who work here. I therefore wish to apologise to you on behalf of myself and The Board for the shortcomings that have occurred in our working practices, which have been identified in the report.”
Will that be enough to placate critics?Will that be enough to placate critics?
Sports Direct is also holding an open day at Shirebrook, allowing people (including our reporters) to see conditions for themselves.Sports Direct is also holding an open day at Shirebrook, allowing people (including our reporters) to see conditions for themselves.
Here’s the order of business:Here’s the order of business:
We’ll be tracking all the action at the AGM, and beyond, through the day....We’ll be tracking all the action at the AGM, and beyond, through the day....
UpdatedUpdated
at 7.37am BSTat 7.37am BST