newcastle United owner Mike Ashley is being lined up for a £12m shares windfall after his Sports Direct chain reported more robust trading.
The group, which has 397 stores and owns brands including Slazenger, Donnay and Karrimor, said underlying earnings rose 2 per cent to £139.2m in the 26 weeks to October 23, keeping it on track for a full-year haul of £215m.
That is a key milestone for the staff bonus scheme, but under proposals announced yesterday the chain’s executive deputy chairman, who currently receives no pay, stands to be granted six million shares, currently worth about £12m, in 2018 if the group achieves £225m this year and further stretching targets over the following two years.
Mr Ashley netted £929m in a single day in February 2007 after selling 43 per cent of the business he founded.
The group said retail revenues increased 8.2 per cent to £697.1m after a strong performance in an “especially fragile consumer environment”.
Mr Ashley’s ‘super-stretch’ targets, which would need the approval of shareholders next year, will only pay out if the company hits more demanding targets than those for its staff bonus scheme.
The group said Mr Ashley had not benefited under the previous scheme, which saw some 2,000 staff receive average share payouts worth more than £40,000 after the company hit its profits target for the second year in a row.
However, it declined to restart dividend payments yesterday despite its strong figures.
Shares rose 5 per cent in trading on Wednesday as the proposals were seen as a further sign of confidence from Sports Direct.
It has put in consistently strong performances in recent months, despite the storm ripping through the high street.
Sports Direct attributes its success to its bonus scheme, which has helped incentivise its staff.
Chief executive Dave Forsey said: “They have been a game changer for us in terms of hitting targets.”
The group has also been winning market share, as one of its main rivals JJB Sports struggles.
Its resilient performance has also been helped by strong internet sales, which increased 85 per cent in the half year and offset a squeeze in margins at its retail division.
The group said current trading ahead of its key Christmas period has continued to be in line with its expectations.
But it refused to give any further clues about whether it is interested in buying outdoor clothing company Blacks, which recently put itself up for sale.
Sports Direct is already Blacks’ biggest shareholder and launched a failed bid for the company last year.
Independent retail analyst Nick Bubb said: “They look on track for a good year.”
Shares closed at 190p, a fall of 9.50p.