Sports Direct International (SPD) - basket case or buying opportunity, we take a closer look
The UK’s biggest sports retailer hasn’t been far from headlines over the past year. Several profit warnings, demotion from the FTSE100 index, departure of a Chief Executive of 30 years, currency woes, parliamentary committees, etc. Last week came news of a £15m hit to next year’s earnings following the ‘flash crash’ in Sterling, with the likelihood that the impact could be worse. This week came the announcement that the company’s acting Chief Financial Officer would resign at the end of the year. For a business that has hitherto generally kept quiet and focused on operations it’s been highly communicative lately! So, is Mike Ashley’s sporting juggernaut really in terminal decline, or does the current share price sell-off present a buying opportunity? Our latest note goes over the numbers.
Dealing with the latest news first, although he has been with Sports Direct for 9 years, Matt Pearson acting Chief Financial Officer, was only appointed to the position last June and the Group has not named a permanent replacement. The business has not had a permanent chief financial officer since 2013, when the former finance director resigned because of ill health. The latest news therefore doesn’t seem that significant in the grand scheme. - JD Sports Fashion vs Sports Direct The last 12 months has seen listed rival JD Sports Fashion (JD.) replace Sports Direct as the UK’s largest sports…