Frasers Group profits and sales surge on the back of acquisitions

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Frasers Group’s profits and revenues have soared, driven by the retailer’s new brand acquisition strategy, disposal of some assets and the continued growth of Flannels.

Frasers Belfast

Frasers Group’s reported profit before tax leapt 53% to £284.6m

The group, which owns retailers including Sports Direct, House of Fraser and Jack Wills, posted a 53% spike in reported pre-tax profit to £284.6m in the 26 weeks to October 23.

Frasers said this growth was driven by “continually improving product choice”, profits on disposal of assets and the growth of Flannels through new store rollout and online.

Group revenues increased 12.7% to more than £2.6bn for the period, largely driven by new brand acquisitions.

UK sports retail sales jumped 11.6% to £1.5bn, premium lifestyle revenues grew 24.7% to £533.5m, international retail was up 5.8% to £492.2m and wholesale climbed 8.6% to £86.2m.

Adjusted pre-tax profit jumped 38.8% to £267.1m, while group gross margin slipped from 44.7% to 42%.

Frasers Group’s total number of stores increased 2.2% to 1,596.

The retailer said that, while the macroeconomic outlook “is clearly challenging and the backdrop for the coming year is hard to predict with any certainty”, it remains confident of delivering an adjusted pre-tax profit of between £450m to £500m for the financial year.

Frasers Group chair David Daly said: “We have delivered a strong performance during the period, despite the challenging backdrop of heightened economic uncertainty in the UK, soaring energy costs, rapidly rising inflation, a widespread cost-of-living crisis and continued geopolitical instability.

“While post-pandemic issues with the global supply chain remain, there are signs that these are beginning to ease.

“We once again remind our stakeholders of our key accounting principles, namely being conservative, consistent and simple, and this will always factor into our forecasting, including provisioning and impairment reviews.

“Despite the above potential headwinds and in this context, Frasers has delivered a robust set of first-half results which demonstrate the resilience of our business and the continued success of our elevation strategy.”