Mike Ashley’s group faces plunging profit

Billionaire businessman Mike Ashley faced a tough year in 2018, as his holding company revealed that pre-tax profit fell nearly 80%.

Mash Holdings, the company which controls Mr Ashley’s stake in Sports Direct and Newcastle United, said profit before tax reached £20.9 million in the year ending April 2018, in accounts released on Thursday.

The 2017 profit was boosted by the sale of Dunlop and the shares held in JD Sports, while “there was no similar income in 2018,” the company said.

Newcastle United reported media revenue up 166% to £126.4 million as the team was boosted by its promotion to the Premier League. But the cost of buying new players, which is levelled out over the years the player is contracted for, rose by £5.5 million to £41.3 million.

This “reflects the significant level of investment in the playing squad,” Mash said in a statement filed with Companies House.

Overall revenue increased 64% at Newcastle and 3.5% at Sports Direct, leading to an overall rise of 5.2% for Mash Holdings.

Meanwhile, the holding company said it was unable to “fully protect” Sports Direct from the impact Brexit might have. At its Shirebrook warehouse the firm is investing in machines to replace European workers who might leave after Britain departs the EU.

“We have been investing in some partial automation for the Shirebrook warehouse operations to make efficiencies and improve productivity on internet fulfilment orders and help mitigate any potential staffing shortfall after Brexit,” it said.

The retailer is also working with a network of warehouses across the continent which can help manage stock once the impacts of Brexit are fully understood.