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Today I'm looking at:

Sports Direct (LON:SPD)

  • Share price: 317p (-1%)
  • No. of shares: 522 million
  • Market cap: £1,654 million

Statement re Goals Soccer Centre plc

Mike Ashley's thoughts on the fiasco at Goals Soccer Centres (LON:GOAL) do make for a dramatic RNS.

Goals Soccer Centres is just one of the many poor-quality businesses which Sports Direct has invested in. Goals admitted this year that its accounts were full of errors and that it was "in discussions with HMRC regarding a potential misdeclaration of VAT".

Sports Direct says today that the management at Goals didn't properly engage with them, when they were considering a bid for the entire company.

They go on to make some rather strong statements about what happened. I think it's worth pasting this in full:

"Given the issues within the Goals business, Sports Direct believes that it would be convenient for those concerned if Goals, and its corporate history, disappeared as a result of the AMA process.

[GN Note: AMA stands for "accelerated mergers and acquisitions" and refers to the attempt by the management of Goals to sell the company.]

From the beginning, the attitude of the Goals board made no sense, including proclamations to senior management of Sports Direct that the issues impacting on, and leading to the catastrophic failure of, the business had only been perpetuated by one person.

Sports Direct considers the Goals board members it was dealing with to be intelligent, and anyone with any common sense could tell it could not be only the result of one person's behaviour given the relative size and timeframe over which what would appear to be considerably more than "inappropriate actions" took place. This leads Sports Direct to conclude that the behaviour of the Goals board, and its apparent failure to spot and deal with the issues, amounts to incredible incompetence and ignorance, wilful or otherwise, at the very least and potentially far worse.

Sports Direct continues to believe that all relevant matters should be fully…

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