FY Results Could Indicate World Cup Boost For Sports Direct
Spreadex | Jul 13, 2018 12:49
It took a while to get going, but Mike Ashley’s firm has had a pretty decent 2018. It spent the first few months of the year trading laterally, bouncing between £3.50 and £3.75, before erupting in late-April, a spring-time run that sent the stock above and beyond £4.
Since then it has had a few wobbles, but has broadly kept climbing, with Sports Direct International PLC now sitting at a current trading price, and 28 month high, of £4.32.
The company’s last major update actually came all the way back in December 2017, when it reported its half year results. Group revenue rose a healthy 4.7% to £1.7 billion, with a 1% decline in UK Sports Retail and a 13.9% plunge in Brands countered by a 4% jump in International Sports Retail stores and a 65.5% surge in Premium Lifestyle.
The headline figure, however, was an eye-watering 67.3% drop in reported pre-tax profit to £45.8 million, with investors only a tad reassured by the 22.9% rise in underlying pre-tax profit to £88 million.
Yet all of this ended up mattering less than the announcement Ashley made after the release, the wheeler-dealer CEO stating that Sports Direct had signed a contract with Nike (NYSE:NKE), meaning the mega-brands latest launches will all be available in the UK high street staple.
In terms of next week’s full year results, investors are going to want to hear about the ongoing costs of Ashley’s quest to turn the company into the ‘Selfridges of sport’, with the related reduction in online promotions and store closures responsible for the dip in interim UK sales.
Sports Direct International PLC (LON:SPD) has a consensus rating of ‘Hold’ alongside an average target price of £3.37.
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