Sports Direct Share Discussion Threads

[discodave4] 12/7/2016 11:40

Please enlighten me, what cash position, Net Debt increased by nearly 70% (£39.9m) to nearly £100m.DD

[weemonkey] 12/7/2016 10:59

buy-back looks like a good idea considering cash position.

Unless some bargain comes up in the market that is even better value.

[discodave4] 12/7/2016 10:08

Who said it was "in trouble"? Wouldn't have bought in the first place if that was the case. Was positive about SPD pre Brexit, now with weak sterling and their complete negligence in not ensuring that they had any $ hedging in place, has made me reconsider getting back in.......the story has now changed significantly IMV.They were ex growth before, but it was marginal, now who knows.What's your view on future earnings?DDPS They have only said they are considering a share buyback.

[undervaluedassets] 12/7/2016 09:44

Companies that are in trouble do not announce buy-backs - Period.

In fact a buy-back now (with a strong company - lots of cash on the books - and a weak SP)is an eminently sensible thing to do.

[discodave4] 12/7/2016 09:26

Weemonkey,All other retailers have hedging in place, SPD not sorting their £/$ hedge will hit them hard. According to analysts at Jefferies about half their goods purchased abroad will now cost them about 20% more.......that's 20% off the bottom line. Their Euro hedge will cost them £68m for every 10% drop in the pound (it's dropped about 14% or so thus far, yes it may recover).Let's hope they do sort themselves out and this is the low, just difficult to put a value on future earnings at the moment.DD

[undervaluedassets] 12/7/2016 09:24

Agree.

This is a strong business trading at a ridiculous price.

[weemonkey] 12/7/2016 08:28

Don't see them as being any worse or better off than any other clothing retailer as a result of hedging strategy. All in the same boat.

Look at the growth in this business and the ambition.

There has been significant PR damage here since October last year yes. But from a business perspective this is a company that is about as far as being in trouble as it is possible to be. SPD will use market turmoil to be a predator again .

[muangsing] 11/7/2016 15:51

DiscoDave4

Thanks for 2018

[discodave4] 11/7/2016 15:37

SPD RNS 24th June:"Following the outcome of the referendum, Sports Direct International plc ("Sports Direct" or the "Company") notes the associated market volatility and in particular material changes to sterling / dollar exchange rates, and the lack of transparency as to those rates in the short to medium term. These factors are likely to impact purchases for which the Company is currently not hedged for the FY17 period and beyond."They had just finished a two year deal where a dollar was priced at £1.70. A lot of retailers have two year hedging contracts in place.DD

[muangsing] 11/7/2016 15:12

DiscoDave4

Please excuse my possible stupidity but on your wording in 2014 they DO HEDGE

Is the risk not FX fluctuations ? and the group "seeks to mitigate... by hedging
via forward foreign currency contracts"?

Incidentally very few companies hedge more than 12 months forward anyhow so hedging only offers temporary relief if sterling remains low.

[discodave4] 11/7/2016 09:51

A potential £230m (ish) screw up!.DD

[oggyrocks] 11/7/2016 09:17

DD

I do totally agree with you. It was a screw up.

They were obviously betting heavily on the fact that we were going to stay in. I would of though from their customer base that they should of know that most of them were going to vote out.

I did a lot of driving in the week before the vote and saw huge amount of out signs. I was stupid not to have forseen the fact that we were going to vote out. Missed out on a big opportunity (not with this share but in those that have flown since).

[discodave4] 11/7/2016 09:04

oggyrocksFrom their own annual report, risks:"The Group seeks to mitigate the FX fluctuations by hedging via forward foreign currency contracts.....".Given that the majority of their products are sourced outside the UK and denominated in $ and Euro, and more importantly that there was a referendum coming up!, not to have anything in place is a serious managerial error IMV.DD

[oggyrocks] 11/7/2016 08:50

Guess we have to hope that the GBP doesnt fall any further against the USD or Euro.

Seems to of stabilized at the moment. Interest rate fall will put this under further pressure. Maybe they will keep it on hold for the time being ?

DD - other retailers do fix, but they also have to buy at different times. ie John Lewis has just run near the end of its FX position and is in the same situation as share price at present. I guess sometimes you win and sometimes you lose on this.

[discodave4] 11/7/2016 08:37

Sorry weemonkey but I totally disagree. Most other retailers have fx hedging in place, what were they thinking!.DD

[weemonkey] 11/7/2016 08:21

Given the bad publicity tsunami extremely good numbers.

Clothes retailers all import so under the same pricing pressures as the rest of high street but SPD more nimble and ambitious.

[salpara111] 10/7/2016 14:32

I guess the issue is that they dont pay a divi so there is nothing to support the share price
if it drops back to the £2 region Ashley may decide to take it private.

[discodave4] 08/7/2016 19:03

No offence weemonkey but wouldn't say an 8.7% drop in underlying profit after tax, and not hedging $, was "creditable".DD

[discodave4] 08/7/2016 09:18

Citigroup house broker says buy at 365DD

[ignoble] 08/7/2016 08:57

They won't be the house broker much longer ...
Tad disloyal
lol !

[elsa7878] 08/7/2016 08:43

Goldman Sachs - house broker - says sell...

[elsa7878] 08/7/2016 08:39

Analysts at Jefferies said the “margin pain could prove pretty remarkable” for Sports Direct, as it had just finished a two-year deal under which it bought dollars at $1.70 to the pound. With sterling now trading at $1.30, the cost of buying about half the retailer’s goods abroad will increase by more than 20%. Sports Direct also warned that a 10% fall in the value of the pound against the euro would result in a £65m loss on hedging contracts Sports Direct had taken out.

It's not absurd to see earnings completely wiped out in this scenario, though I guess they will have to raise prices instead in the midst of a retail recession.

Clearly been a massive broker downgrade this morning - hence opened at 260.

[discodave4] 07/7/2016 22:41

targatarga - 07 Jul 2016 - 08:40 - 1989 of 2002 - 0I'm expecting a retrace after 9amWow, got the lottery numbers? :)DD

[sophia1982] 07/7/2016 19:06

Eastbourne,

I agree it is very cheap but profits will take a dip because of FX.