Sports Direct profits drop by almost 60% as pound sterling slump bites

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 has suffered a near 60 per cent slump in profit before tax in the year to the end of April, battered by a fall in the pound in the wake of last year’s vote.

The retailer, founded and run by controversial billionaire Mike Ashley, recorded a profit of £113.7m for the period, 58.7 per cent lower on last year’s £275.2m. Underlying earnings per share plummeted 67.9 per cent to 11.4p.

“As previously announced, the devaluation of sterling against the US dollar has led to a significant impact on [core earnings]and profits [for the full year],” Mr Ashley said.

“We have put in place hedging arrangements to minimise the short-term impact of currency volatility, but like many UK retailers we remain exposed to medium/long term currency fluctuations. Our results were also impacted by provisions and depreciation charges.”

The pound remains close to 13 per cent lower against the dollar since the June 2016 referendum. Sports Direct sources most of its products from Asia, buying them in dollars, but did not have hedges in place ahead of the dramatic decline in the value of sterling.

On Thursday, the group said its earnings may be subject to further “short-term fluctuations … particularly given the continued uncertainty surrounding Brexit”.

As well as market headwinds, Sports Direct has also been battling to recover from a scandal over working practices.

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It was condemned by MPs last year for its treatment of workers, including paying some less than the minimum wage for shifts at its warehouse in central England.

An Independent report commissioned by the company found “serious shortcomings” in working practices.

Shares in the company have more than halved over the last two years.

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