Sports Direct Share Discussion Threads

[terminated] 18/7/2019 13:20

It's the 1.2 billion valuation that's stopping them from collapsing. If SPD turned out a modest 120m profit then this valuation would be fair but its highly unlikely it will be that low. If HoF is hemoriging money then he will have to let it go and write off the 90m. Apart from his share investments his companies don't loose money and the bulk of this company is concerned with sporting goods which is resilient. All this could easily be a problem incorporating newly acquired businesses into the accounts. What people are saying is pure speculation.

[spaceparallax] 18/7/2019 10:55

It's only the Company's own share purchases that are preventing this from plummeting.

[useless23] 18/7/2019 10:32

I think there could be serious problems here not confined to HofF. Pure speculation though

[spaceparallax] 17/7/2019 15:37

It was inevitable that Mike Ashley's greed would come back to bite him one day - he's not the first who doesn't know when to stop. A modern day Green that is likely to go on to witness the fall of an unscrupulous empire built on sand. Just a shame for the innocent cannon fodder who patrol the lonely shop floor.

[clocktower] 17/7/2019 13:01

I expect the club will be sold before very long. It`s been on the cards for a long time and rumour has it that someone formally associated with ManU as a deal maker, is in the running to pull a deal off early this season.

[stellainvests1977] 17/7/2019 12:27

This appointment of Bruce will prove to be a grave mistake on all frontsFCB

[fenners66] 17/7/2019 12:17

Ashley has just made a very forward thinking appointment at Newcastle though....

Steve Bruce is just the man to get them promoted from the Championship.....

..... after they get relegated this season......

[ltcm1] 17/7/2019 11:15

IMO it will all collapse in a most spectacular way for Ashley one day, however it is hard to take a position against him because he owns so many of the shares. He has a web of over 200 companies plus Newcastle United, he does have enormous cash flow so can doubtless keep the thing going for years provided he doesn't land on 00 twice in a row.

However you wonder if a Newcastle relegation and a HoF meltdown could be that 00 hitting twice in a row!

[discodave4] 16/7/2019 13:17

House of Fraser, Harrods of the High Street Https://www.bbc.co.uk/news/business-48992071

[fenners66] 16/7/2019 13:16

No doubt some on here and the city anal-ysts will point to "underlying" or "adjusted" earnings to support the share price

After all if the losses are not underlying then they don't actually exist right ?

Pencils in ears , underpants on heads....

Its normal these days to try and isolate losses and shunt them off to non-underlying even if the definition of exceptional is not met.

When they allocate HofF losses to this they will conveniently ignore that the following year's results are likely to have more of the same - and then there will be the next loss making business he buys etc....

In the meantime the balance sheet does not hide the losses and the accounts will look weaker.... until creditors start to ramp up rates....

[discodave4] 16/7/2019 13:12

Last post for Terminated.

[debsdowner] 16/7/2019 13:01

Disco,

Thanks for rough analysis if the top end is as you say its not in absolute danger territory but at risk due to deterioration.

What could back a collapse in share price is buy backs but can they continue?

Terminated, I wouldn't be so sure House of Fraser must be losing money and will hit profits.

[terminated] 16/7/2019 12:45

There is no indication of a profits collapse. One can say he appointed his accountants too late which led to another mess up in terms of PR with the city but collapsing from £3 to this is an overreaction. He does need to get the debt down but spo?ting goods are recession proof, it continued it's rise after the 2008 crash. The collapse of the pound flattened this share but the sporting arm will tick along nicely, especially as he owns the SPD stores. I don't think hè has any intention of turning HoF into the Harrods of the high street, he will bring it more down market if anything.

[discodave4] 16/7/2019 12:24

Excluding HoF EBITDA could be (taking the mid point of their original +5 to +15% forecast at H1) about £335m. However, HoF at H1 hit underlying EBITDA by £30m just for the first 2.5 months of acquiring HoF.So the punt now, and it is a punt IMO, is how much by year end has all MA's acquisitions, including the "Harrods of the High St" HoF, not only hit EBITDA but the BS, in particular net debt.At a guess underlying EBITDA (including acquisitions) could be circa £260m (top end £295m but highly unlikely), that's c 17p eps. mmmm.

[clocktower] 16/7/2019 12:13

Good to hear from you rescuer, and yes reasonably fit and well and still smiling. Yes it`s been a good short from the 280`s and but I got it slightly wrong last time I posted that, because it then popped up just over £3. Having ducked out, I find these things are a bit unpredictable but of the face of it I agree with you, regardless of the research which points in the direction you say, along with debs. However Mike has a whole pack of cards up his sleeve, so a bit of caution at these levels imo.

Good luck though.

[debsdowner] 16/7/2019 11:47

rescuer

I think you are right! Latest from BBC business Live:

11:22
Sports Direct 'a cash cow for Mike Ashley'

Today Programme
BBC Radio 4


Sports Direct's share prices have fallen again, adding to yesterday's hammering when the retailer said it would delay publishing its results.
Kathleen Brooks, founder of Minerva Analysis, says that Sports Direct's founder and chief executive, Mike Ashley, has long had "an incredibly difficult relationship with the City of London" which was reflected in Monday's share price fall.
She tells the BBC's Today programme: "Sports Direct had said that profits could be between 5% and 15% higher. However, that excluded all of the acquisitions they've made recently.
"It seems like Sports Direct has generally been a cash cow for Mike Ashley to make these acquisitions [and] become this kind of king or saviour of the high street."
But she says: "However, [Sports Direct] is woefully understaffed to actually deal with these acquisitions which could be one reason why the results have had to be pushed back, potentially by about five weeks."

Comment

May have been a cash cow but its uncertain now how what the situation really is and with a market cap of over a billion its too high risk imo.

Its definitely not a buy and a sell imo.

[fenners66] 16/7/2019 09:36

The mess he made of his £100m investment in Debs - shows he makes mistakes - big ones.
That was compounded by his calls for extraordinary meetings and special resolutions where he thought shares were owned in his name and lost weeks finding out that the shares were owned by one of the companies.
That was a total incompetent embarrassment.

So should we think that the strategy at SPD is infallible ?
No.

[rescuer] 16/7/2019 08:56

clock - been a longtime since we crossed paths, hope you are well.

I'm looking at the Ashley empire and everything points to over leveraged, with the margins at SPD so low and a current PE of around 50 and the weigh in of HoF, this looks in trouble to me.

They may need to raise in the short term, looks a dead cert short IMHO.

[clocktower] 16/7/2019 08:22

SP must have had a shot in the arm with all the recent focus on Sport - Cricket, Tennis, Tour de France and before long the Football season kicking off.

The problem is the HoF stores need a lot of investment but if MA is able to hand most stores back he can re-position the whole group in a short time. I am sure he got good deals on the ones he wanted to keep.

[debsdowner] 16/7/2019 08:11

KNIGEL

"Makes sense to have a rights issue NOW while the share price is still at a decent level to strengthen the balance sheet."

Very sensible comment an astute management would try and predict the worst case scenario and as retail sales still falling and the company has a lot of debt that would be a sensible move.

To take up one of the previous posts in relation to House of Fraser Ashley did negotiate reduced rents on most if not all the stores he took on.

Mike Ashley did take on the House of Fraser stores on licence however from administration and could hand the keys back if he wanted from my memory.

I think Ashley taken on too much at the moment however some of the acquisitions making profit and its difficult to work out how good or bad trading really is at Sports Direct and acquisitions still going on and it will take time to ascertain the true position of the company.

A warning however and if the UK did go into recession the house of cards here could collapse, there is too much debt imo and I think KNIGEL thinks the same.

[nortic 007] 16/7/2019 02:11

Ashley delay raises doubts over buying spree strategyhttp://www.thetimes.co.uk/article/096ce924-a73a-11e9-89e4-5e7e89de8df9

[nortic 007] 16/7/2019 02:05

US activist caps torrid day at Ashley's Sports Directhttp://www.thetimes.co.uk/article/b6fd33f8-a737-11e9-b520-3fe5f5a3c989

[knigel] 15/7/2019 22:47

Makes sense to have a rights issue NOW while the share price is still at a decent level to strengthen the balance sheet.
O/T if Debenhams had raised £300 million at 50p back in early 2018 maybe the store closures would not.have meant delisting..
MA eat too many chains and now has severe indigestion