Sportswear retailer Sports Direct has warned investors as the abrupt drop in the value of the pound wiped £15 million off its underlying profits.
Back in September and under huge pressure from its AGM and the media, the company reported its expected underlying EBITDA to be about £300 million for the next year. Due to the 6% fall, Sports Direct released an impromptu trading update now showing at around £285 million and if the pound/dollar ratio stays at 1.20 for the remainder of the year, a further £20 million could be lost.
The retailer commented: "In light of recent downward currency movements, the company entered into a hedging arrangement with respect to the GBP/USD rate.
"Extreme movements overnight resulted in a crystallisation of that rate at 1.19, resulting in a negative impact of approximately £15 million on the company's FY17 underlying EBITDA expectation."
