A record-breaking profits haul from North East retailer Sports Direct means thousands of staff are in line for staggering bonuses in shares next month.
Sports Direct International, controlled by Newcastle United owner Mike Ashley, reported a 40% leap in pre-tax profits to £207.2m for the year to April 28 while underlying earnings jumped 22.1% to £287.9m.
Exceeding its yearly targets means the company is in a position to pay out to more than 2,000 permanent staff who signed up to a lucrative four-year bonus plan in 2009.
Yesterday, Sports Direct shares rose by 41p to 641.5p at the close of trading, meaning an employee earning £20,000 in 2009, and receiving 12,000 shares next month, could expect a reward worth around £77,000 – and this can be cashed in immediately.
The latest results also mean around 3,000 employees are on track to reap the benefits from a second bonus scheme set up in 2011.
Sports Direct chief executive Dave Forsey said: “2012/13 was a record-breaking year for the group and for British sport.
“We are pleased that both have continued to be successful and that our strategy of being the consumer’s champion continues to reap rewards.
“There is no doubt that the group’s record-breaking results were in the large part down to our colleagues and their hard work.”
Sports Direct’s profit hike comes after like-for-like sales raced 11.2% higher over the past financial year as the group strengthened its grip on the market following the collapse of rival JJB.
However, it revealed yesterday it had scrapped plans to resurrect the contentious “super-stretch” bonus plan for Ashley and will review “various options” ahead of its annual general meeting in September.
The previous scheme, which would have delivered a potential £26 million pay-out, was withdrawn last summer after investors threatened to reject it in a shareholder vote.
Ashley has not taken a salary since the 2007 stock market debut, but recently raised ï¿½100 million after selling a 4% stake in his company.
This followed his sale of a 43% stake for more than £900 million when it floated.
The group remained tight-lipped on the options for his bonus, but a spokesman said it was clear the original targets were no longer appropriate, given the performance since the plan was first mooted.
Sports Direct will instead retain the “super stretch” targets for £310 million in underly3ing earnings in 2013/14 and £360 million in 2014/15 as internal management goals, not linked to bonuses.
It said trading since the year-end had remained strong and ahead of management expectations for the first quarter.
However, it signaled that it may be tougher to maintain the sales performance over 2013/14 as there will be few significant sports tournaments.
The group has 396 stores – 20 of which it bought from JJB last October – and owns brands including Slazenger, Donnay and Karrimor.
It is a FTSE 250 company that has seen its share price rise by 90% in the last year.
For the third year running, Ashley has retained his crown as the region’s richest man.
There is no doubt that the group’s record-breaking results were down to our colleagues’ hard work