Shares in Mike Ashley’s Sports Direct crashed by more than a quarter after the retailer’s disastrous annual results announcement on Friday, a chaotic day that saw several delays and shock financial revelations.
The shares plummeted by 27% to 166.6p when trading opened on Monday, in the stock market’s first response to the shambolic annual statement that included a warning that the firm’s House of Fraser chain has “terminal” problems and a €674m (£605m) tax bill from the Belgian authorities.
The results were published after the stock market closed on Friday and revealed that Sports Direct was struggling amid tough trading conditions on the high street.
David Cumming, the chief investment officer for equities and head of UK equities at Aviva Investors, told the BBC on Monday: “Sports Direct is almost a case study in failed corporate governance.” He said Ashley “has obviously got retail talent – or had retail talent”, but the firm had “lost its way”.
Justin Urquhart Stewart, a fund manager at Seven Investment Management, said the delayed publication of the results was “frankly a pathetic way to run a business”.
“Mike Ashley doesn’t care about the City [investors] very much. As far as he is concerned he is used to running a business his way,” he told the BBC’s Wake Up To Money.
In the annual results, Ashley warned that the state of House of Fraser, which his company bought out of administration last year, had created “significant uncertainty” as to the future profitability of the entire group. He warned of more store closures at House of Fraser and said he regretted the acquisition.