Sports Direct postpones its results
Sports Direct has postponed its results and said that previous guidance given in December may have been too optimistic as the reality of its acquisition of ailing department store House of Fraser starts to bite.
Sports Direct’s share price fell by 12% initially on the news. Although House of Fraser gloom has probably already been priced into the shares, the worry here is that there is something more fundamentally wrong going on at Sports Direct itself.
Mind you, there are a lot of troubled acquisitions to be digested following the company chief’s shopping spree and, what I term as “Mike Ashley’s bag of crap” includes the likes of Evans Cycles, Sofa.com and Game Digital.
You may think I am being quite harsh, but Evans Cycles is exposed to the fading popularity of cycling in this country, Sofa.com is exposed to a weak real estate market and Game Digital is vulnerable to the trend for streaming games, initially on dedicated consoles, and then further down the line on any device.
There’s a reason why he managed to pick them up so cheaply.
Sports Direct now expects to publish its audited results sometime between July 26 and August 23.
CBD in the UK
The second thing I wanted to talk about today was how North American cannabis companies are increasing their presence in the UK market – which some think could be worth £16.5bn in the next decade.
Five big Canadian companies have been importing cannabis into the UK since November and Canopy Growth, the world’s biggest listed producer, recently announced a partnership with The Beckley Foundation to develop medical cannabis shortly after buying a big stake in UK beauty brand This Works in May.
Canadian cannabis company Sundial, which is shortly to list on the NASDAQ, bought into Lincolnshire-based Bridge Farm Group last week and will be followed tomorrow by the launch of super premium cannabis brand Ignite in the UK.
Even mainstream retailers like Holland & Barrett are getting in on the act and now stock over 100 products that contain CBD, the non-hallucinogenic part of cannabis.
If approval goes ahead, the market potential could be massive.