Frasers Group, previously known as Sports Direct, has presented its financial results for the first half of the year, concluding in October. Although the company encountered some setbacks, it did manage to achieve growth in both sales and profits. Given the current state of the retail sector, any form of advancement is viewed as a positive outcome.

During the reported period, Frasers Group’s total revenue rose by 4.4% to reach £2.769 billion. Additionally, retail revenue experienced a 4% increase, totaling £2.681 billion. These figures were primarily attributed to the acquisition of new businesses in the previous fiscal year, along with the impressive performance of the company’s sports and athleisure retail division.

When excluding acquisitions and disposals, revenue still managed to grow by 0.8% on a currency-neutral basis. Although this may appear to be a modest figure, it is noteworthy in comparison to the sales declines witnessed by various other players within the industry.

The retail gross profit for Frasers Group surged from £1.04 billion to £1.12 billion. Moreover, the group’s gross profit increased to £1.19 billion from £1.12 billion, resulting in an improved gross margin of 43%, up from the previous 42.3%. Trading profit for the retail division experienced a substantial increase of 25.7%, reaching £364.7 million. This boost was driven by the outstanding performance of Sports Direct and its brand partnerships. However, the group’s overall trading profit decreased by 6% to £412.5 million.

Frasers Group’s operating profit observed a modest growth of 4.4%, amounting to £298.1 million. Furthermore, the adjusted profit before tax rose by 12.6% to £303.8 million, despite a decrease in profits from property and subsidiary disposals. The reported profit before tax also saw a rise of 8% to £310.2 million, while the reported profit after tax increased by 5.6% to £234.6 million. These positive figures were largely attributed to the company’s strong trading performance, although they were partially offset by a decrease in foreign exchange gains and an increase in the effective tax rate.

In terms of revenue breakdown, UK Sports Retail accounted for 53.6% of Frasers Group’s total revenue. Despite a modest growth of 0.8% to £1.485 billion, this increase managed to compensate for the decline in Game UK and Studio Retail. The Premium Lifestyle division, which includes brands like House of Fraser, observed a revenue growth of 3.1% to £550.1 million. However, excluding acquisitions and disposals, revenue for the division actually decreased by 11.2%. Additionally, the International Retail division experienced a significant revenue surge of 13.2% to £645.8 million. This increase was driven by growth in Spain, Ireland, and the recent acquisition of MySale in Australia.

Expressing his contentment with the company’s performance, Frasers Group CEO Michael Murray conveyed that they are entering the Christmas trading period with strong momentum. He attributed their success to the company’s elevation strategy and the remarkable growth of Sports Direct, boosted by their brand partnerships. Murray acknowledged that the luxury market has posed challenges, but the company remains confident in investing in its Premium Lifestyle business.

Murray also emphasized the positive start to the current fiscal year, with strong trading momentum continuing into the first half and early weeks of the second half. The company maintains an optimistic outlook, aiming to achieve an adjusted profit before tax ranging between £500 million and £550 million for the entirety of the year. Despite the ongoing challenges within the retail industry, Frasers Group’s diverse holdings and the strength of its sports and athleisure business are proving to be key factors in its resilience within the market.

Useful links:
1. Frasers Group Official Website
2. BBC Article on Frasers Group Financial Results