Sports Direct International PLC (LON:SPD) has warned last year’s profits drop could be even worse than feared as it struggles to integrate House of Fraser, the collapsed department store chain it bought out of administration for £90mln last August.
Back in December, the FTSE 250 retailer said underlying profits for the 12 months ended 28 April would likely be “behind last year’s result” due to the costs associated with the House of Fraser acquisition.
READ: Sports Direct launches £52mln takeover of Game Digital
The annual results were due to be published later this week, but bosses revealed on Monday morning that the numbers would now be delayed by up to five weeks as auditors grapple with the spreadsheets.
“The reasons for the delay are the complexities of the integration into the company of the House of Fraser business, and the current uncertainty as to the future trading performance of this business.
“Sports Direct believes its accounts and their audit to be at an advanced stage. However, there are a number of key areas to conclude on which could materially affect the guidance given in Sports Direct's announcement of 13 December 2018.”
In 2018, Sports Direct, which is owned by eccentric billionaire Mike Ashley, turned an underlying pre-tax profit of £152mln on sales of £3.3bn.
But reports over the weekend suggested profits could fall by up to a fifth for the year just gone to £122mln, despite a slight pick-up in revenue.
Now owns 84% of Game Digital
In a separate statement, Sports Direct confirmed it now held just shy of 84% of Game Digital PLC (LON:GMD) – the video games retailer it recently agreed to buy for £52mln.
Once its holding surpasses 90%, it will be allowed to buy the remaining shares automatically.
As its stake is now above 75%, it can apply for the company to be de-listed from the London Stock Exchange, which it intends to do.