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Sports Direct delays results as House of Fraser trading 'uncertain' Sports Direct delays results as House of Fraser trading 'uncertain'
(about 1 hour later)
Shares in Mike Ashley's Sport Direct have fallen sharply after it delayed its results, citing uncertainty about trading at the House of Fraser chain it bought last year. Shares in Mike Ashley's Sport Direct have fallen sharply after it delayed its results, citing uncertainty about trading its House of Fraser chain.
The company, whose results were due on Thursday, added its auditor, Grant Thornton, was facing increased scrutiny of its work for Sports Direct. The company, whose results were due on Thursday, added the delay was also due to its auditor, Grant Thornton, facing increased scrutiny of its work for Sports Direct.
Sports Direct also indicated that it may not achieve its profits forecast.Sports Direct also indicated that it may not achieve its profits forecast.
The company's results may be delayed to 23 August. The firm's results will now be released between 26 July and 23 August.
Sports Direct said that other companies' audits were also taking longer.
In December, when Sports Direct published its half-year results, it said that, excluding House of Fraser, operating profits were expected to grow by between 5% and 15%.In December, when Sports Direct published its half-year results, it said that, excluding House of Fraser, operating profits were expected to grow by between 5% and 15%.
But in its latest update, the company said: "There are a number of key areas to conclude on which could materially affect the guidance given in Sports Direct announcement of 13 December".But in its latest update, the company said: "There are a number of key areas to conclude on which could materially affect the guidance given in Sports Direct announcement of 13 December".
Around that time, Mr Ashley had described trading as "unbelievably bad".Around that time, Mr Ashley had described trading as "unbelievably bad".
News of the delay in Sports Direct's results sent its shares down more than 10% in early trading on Monday. Trading has continued to be difficult for retailers. The British Retail Consortium said on Monday that there had been a "summer slump", with footfall on High Streets in June dropping 2.9%.
Mike Ashley owns huge swathes of the High Street. As well as buying House of Fraser for £90m - saying he wanted to turn it into the "Harrods of the High Street" - he has also bought Evans Cycles and owns several sportswear brands, as well as lingerie firm Agent Provocateur and luxury fashion chain Flannels. News of the delay in Sports Direct's results sent its shares down more than 10%.
Earlier this year, he had tried to have himself installed as chief executive of Debenhams, but instead had his stake in the chain wiped out when the retailer was rescued by its lenders. Retail empire
On Monday, Sports Direct also announced it was close to taking control of Game Digital. Mike Ashley owns huge swathes of the High Street, although not all through Sports Direct in which he owns a 62% stake.
As well as buying House of Fraser for £90m last year - saying he wanted to turn it into the "Harrods of the High Street" - he has also bought Evans Cycles and owns several sportswear brands, the upmarket clothing outlets Flannels and Cruise , as well as lingerie firm Agent Provocateur.
His expansion efforts continued on Monday when Sports Direct also announced it was close to taking control of Game Digital.
But his ambitions are not always achieved. Earlier this year, he had tried to have himself installed as chief executive of Debenhams, but instead had his stake in the chain wiped out when the retailer was rescued by its lenders.
Mr Ashley has also failed to take over music retailer HMV and pulled out of the bidding for Patisserie Valerie.
Goals Soccer Centres, the five-a-side football operator in which Sports Direct has an 18% stake, has had accounting issues and issued profits warnings.
Independent retail analyst Nick Bubb described the announcement from Sports Direct about the delay to its results as "devastating".
"The company hasn't updated the City since its interims in December and House of Fraser is clearly a disaster area, so this is a serious situation," he said.
As well as citing the "complexities of integration into the company of House of Fraser", as one the factors behind the delay to its results, Sports Direct also pointed to "increased regulatory scrutiny of auditors".
Sports Direct said that other companies' audits were also taking longer, and Mr Bubb noted that Superdry has delayed its results earlier this month due to complexities in the figures.
The accounting regulator, the Financial Reporting Council, had looked into Grant Thornton's audit of Sports Direct's 2018 results as part of its annual review process.
The regulator found that, overall, 50% of Grant Thornton's audits were below the acceptable standard.
"These factors have led to a need for the company to compile more information than in previous years," Sports Direct said.
"Sports Direct would note that its core principles in regards to its financial statement are be conservative, consistent and simple," it added.
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