Sports Direct AGM: Retailer issues earnings warning as it asks chair Keith Hellawell to stay on board despite offering to step down
Sports Direct has issued a number of updates to the market this morning – including a warning of a dip in earnings and profit this year – ahead of its AGM, due to start at 11am.
The retailer said it expects underlying profits for the full year to come in £120m lower than previously expected, while earnings before income tax, depreciation and amortisation are set to fall from £380m to £300m during the 2017 financial year.
Meanwhile, Sports Direct also revealed today that it told chairman Keith Hellawell to stay on as chairman of the board, despite his intention to stand down.
In a statement this morning the retailer revealed that Hellawell had offered to step down over the weekend, in light of shortcomings revealed in a report published yesterday. However, the company asked him to remain "in order to assist with making further improvements".
Despite the company admitting to "serious shortcomings" in its working practices, many investors were not impressed by the report.
Leon Kamhi, head of responsibility at Hermes Investment Management, said the group still wants to see an independent review of Sports Direct – and still wants to see Hellawell step down.
The news that Hellawell is to stay on at the firm comes ahead of today's annual general meeting, to be held in Shirebrook. It will be Sports Direct's first public AGM.
Meanwhile, in a trading update also issued this morning, Sports Direct revealed that its hedging policy is under review – at the moment the company is unhedged on USD/GBP, which could hit the company hard given the fluctuations in global currency markets since the EU referendum.