Mike Ashley’s Frasers Group reported a slump in profits that it blamed on a prolonged period of Brexit uncertainty followed immediately by the coronavirus crisis.

The delayed preliminary results from Frasers Group, for the year ending April 26, 2020, showed reported profit before tax slumped 19.9% to £143.5m and underlying profits before tax slipped 18.1% to £117.4m.

Group revenues increased 6.9% to £3.95bn, though excluding newly acquired businesses, revenue decreased 12.6%. 

Reported EBITDA surged 98.7% to £551m due to changes in reporting after the implementation of IFRS16. Underlying EBITDA for the group was up 5% to £302.1m. 

UK sports retail revenues saw a 0.7% bump during the period, driven predominantly by Frasers’ acquisition of Game, while sales across its premium lifestyle category increased 34.9%, driven by Jack Wills and Sofa.com. 

The international business saw sales slump 19.3% to £174.2m, while its wholesale and licensing arm posted a 2% dip in revenues to £160.2m.

Chair David Daly said this financial year would be “remembered as the most challenging year in the history” of the business. 

“The political uncertainty around Brexit had been with us for far too long and, just as we were feeling more confident of getting some clarity and stability, the Covid-19 crisis arrived, which will continue to have an impact on the economy and our business beyond FY20,” he said

Despite this, Frasers Group said it planned to invest “in excess of £100m” its digital elevation strategy in the coming year with a “particular focus on Flannels”. 

“With digital transformation now at the forefront, the successful reopening of our stores after the Covid-19 lockdown and continuing strong web performance”, Frasers said it was confident of achieving 10% to 30% growth in EBITDA for the full year 2021. 

Daly lashed out at the current management team of Debenhams, saying it was “scandalous that this business has now been in administration twice” and accused “certain entities” within the group of wanting to see the department store chain dissolved so as to avoid scrutiny. 

Daly said elevating the group and its diverse portfolio of brands “would continue to be the biggest strategic priority” for Frasers Group in the coming financial year.

Frasers “continues to make progress with the reorganisation and elevation” of House of Fraser, though Daly called it a “challenge”. The group said it was working on new format Frasers stores in the same vein as its new Sports Direct and Flannels stores.

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