Mike Ashley’s business profits tumble

Profits at the holding company that contains Mike Ashley’s business empire plummeted in 2017, attributed to the fall in value of the pound and the poor performance at Newcastle United.

Accounts filed at Companies House for the financial year ending April 2017 revealed profits at Mash Holdings fell from £227.7m to £102.5m. This is despite revenues for the period having increased by 11.7% to £3.33bn.

Mash Holdings said the fall was due to to a lower EBITDA and “higher depreciation charges” in its Sports Direct division. On an individual basis revenues at Sports Direct were up 11.7% to £3.2bn but this was offset slightly by Mash Holdings other key asset, Newcastle United, seeing its revenues plummet by 30%.

Additionally, Sports Direct’s gross profit margin fell 320 basis points from 44.2% to 41% which was caused by the “negative movement of the US dollar exchange rate with the pound” and an “increase in provisioning for stock” in a “fast changing market and supply chain”.

The accounts also revealed that Sports Direct has access to loans of up to £907.5m which could go up to £1bn.

The current financial year has seen Ashley go on a high street acquisition spree acquiring House of Fraser for £90m, Evans Cycles for £8m and most recently Sofa.com. He also failed in a bid for HMV and pulled out of the race for embattled bakery chain Patisserie Valerie.

This was alluded to in the accounts statement which said: “The group continues to seek out profitable investments and development projects”.