Champion bonuses at Sports Direct as profits skyrocket

Staff to receive £140m bonus pool as profits soar by 40%

by Gabriella Griffith
Last Updated: 05 Aug 2013
It’s party time over at Sports Direct HQ has the retailer reveals a 40% rise in pre-tax profits and a 20% rise in sales, put down to the Olympics and the Uefa European Championships – back of the net!

The great trading news has been described as ‘record breaking’ by chief executive Dave Forsey and staff are set to share a £140m bonus pot thanks to the results.

According to reports, some 2,000 Sports Direct employees will be bestowed with 12,000 shares each – at the current share price this works out at a tasty £73,000. Staff must be gleefully rubbing their hands together as the company’s share price has risen more than 90% over the past year.

‘2012/13 was a record-breaking year for the group and for British sport,’ said a clearly delighted Forsey.

‘We are pleased that both have continued to be successful this year and that our strategy of being the consumers’ champion continues to reap rewards.’

Sports Direct has flourished in the face of many high street administrations. The UK sports retail division grew by 17% with its operations in Europe saw revenue rises of 20%. The company had expanded into four new countries in the last financial year, putting roots down in Austria and the Baltics, increasing its reach to 19 countries.

Unsurprisingly the online revenues for the sports behemoth shot up, an increase of 52% meant that internet shopping now accounts for 15% of total sales.

Not everyone at the retail giant will be completely over the moon though. Founder, majority shareholder and deputy chairman Mike Ashley has seen his bonus share scheme dropped. The controversial scheme failed to get the support of other shareholders.

It would have meant a payout of around £26m for Ashley, the billionaire Newcastle United owner. Sports Direct has said it will be looking at ‘various options’ to reward him instead of the doomed scheme.

Despite the bumper year, shareholders won’t be drawing a dividend. ‘The board feels that it remains in the best interests of the company and its shareholders to maintain financial and strategic flexibility, including pursuit of potential acquisition opportunities and ongoing investment in group infrastructure and store portfolio,’ the retailer said.

‘The payment of dividends will remain under review for consideration in future years.’

Drinks are on the staff it seems.

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