Sports Direct has issued a profit warning following an “extreme” drop in the value of the pound overnight, which stripped £15m off its bottom line.
In September, Sports Direct said it expected underlying EBITDA for 2017 to be in the region of £300m. The guidance was based on a rate of $1.30 to the pound.
However, last night the pound mysteriously crashed from about $1.26 to $1.13. The Bank of England is investigating why.
Sports Direct said the “extreme movement” resulted in a crystallisation of its hedging rate at $1.19. This will drag its EBITDA down by £15m, the company said.
It added that, if the rate remains at $1.20 for the rest of the year, the company’s EBITDA could be down a further £20m.