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Mike Ashley's Sports Direct pre-tax profits plunge 67%

Mike Ashley Photo: PA

Mike Ashley's Sports Direct has seen its half year profits dented. The retailer said that statutory pre-tax profits plunged 67.3% to £45.8 million in the 26 weeks to October 29.

The Newcastle United owner puts the fall down to store closures, reduced online promotions and Brexit.

Last year's profits were also flattered by the sale of a chunk of shares in rival JD Sports.

UK retail sales fell by 1.4%, mainly due to reduced online promotional activity, store closures and the weak pound pushing costs up.

Mike Ashley Credit: PA

The tycoon is attempting to reposition the store estate, which he claimed is delivering "spectacular" results.

He said: "Our high street elevation strategy is currently delivering spectacular trading performance within our flagship stores. We intend to open between 10 and 20 new flagship stores next year.<

"Whilst our reported profit before tax has been impacted by fair value adjustments and transitional factors such as the disposal of assets in 2017; our underlying profit before tax remains healthy."

Sports Direct has seen its half year profits dented Credit: PA

On an underlying basis, pre-tax profit rose 22.9% to £88 million and sales were up 4.7% to £1.7 billion.

The firm said that it expects underlying earnings growth for the full year to come within its forecast range of 5% to 15%. Shares fell nearly 8% in morning trading to 353.3p following the update.

Last year the retailer was hit after failing to hedge against the fall in the value of the pound in the immediate aftermath of the EU referendum, leading to a collapse in profits.

It said in its latest trading update that it signed long-term forward hedging contracts in October.

The results come amid a string of controversies for the firm. There's been a legal battle between Mr Ashely and the investment banker Jeffrey Blue. Details of the case included alleged alcohol-fuelled behaviour at a senior management meeting.

This week, Shareholders in Sports Direct voted overwhelmingly to oppose Mr Ashley's attempt to hand his brother and former IT director an £11 million back payment.

In September, Sports Direct's under-fire chairman Keith Hellawell escaped an investor revolt after the majority of independent shareholders backed his re-election despite widespread criticism of his stewardship.

Last year Mr Ashley was hauled before MPs to be grilled over working conditions and shortly after the company host a tumultuous "open day" at its headquarters.