Profits soar at Mike Ashley's Sports Direct
Jul 22 2010 By Karen Dent, The Journal
STAFF at Newcastle United owner Mike Ashley's Sports Direct are in line for bonus pay-outs after the chain's profits soared by almost 50%.
The Toon tycoon’s sportwear shops annual earnings hit £160.4m, which was enough to trigger the first stage of the scheme for 2,000 staff. Workers with at least two years’ service will receive shares worth 25% of their salary, which will be payable in two years time.
And if Sports Direct hits its next earnings goal and other performance related measures, eligible staff will be in line for another shares windfall worth 75% of their basic pay. It is now targeting underlying earnings of around £195m for the year to April 2011.
The business, which reported a 49.8% leap in underlying pre-tax profits to £102.1m in the year to April 25, said its UK trading was well ahead of last year - despite England’s disappointing performance in the World Cup.
However, the tournament in South Africa did hand Sports Direct its best ever trading day. Football fans flocked to its high street stores and its online site on the day of England’s opening match against the US.
But the team’s earlier than expected exit means Sports Direct, which has more than 370 UK stores, 63 overseas outlets and employs around 17,000 people, now has to shift unsold England branded gear which will offset some of the boom in pre-World Cup sales.
Chief executive Dave Forsey said: “Nevertheless, current UK retail trading remains well ahead of the same period last year.
“Although we shall have to manage the impact of the announced increase in VAT in January 2011, we are confident that initiatives we are taking across all areas of the group, including improved staff training and new, specialist in-store merchandising areas, put us in a strong position for the next phase of our growth.”
Mr Ashley’s interests in Sports Direct and Newcastle United have made him the richest man in the region, with a personal fortune estimated at £890m.
The figures, from this year’s Sunday Times rich list, put him at 65 in the national rich people’s league table. It reckoned his worth increased by £190m during 2009-10 from around £700m a year earlier.
