Frasers Group, the owner of numerous retail chains such as Sports Direct and House of Fraser, has posted a strong uplift in half-year sales and profits despite the tough trading conditions
In the six months to 23 October, the company’s revenue climbed 12.7% to £2.64bn, boosted by acquisitions.
Reported pre-tax profit jumped 53% to £284.6m, with a 38% rise on an adjusted basis.
The group’s core Sports Retail unit saw revenue increase by 11.6% to £1.53bn, largely due to the acquisition of Studio Retail. In addition, sales in Frasers’ Premium Lifestyle division rose by 24.7% to £533.5m as a result of new Flannels stores and continued growth online.
Meanwhile, its international business saw revenue grow 5.8% to £492.2m, mainly due to the acquisition of Sportmaster in May and an increase in its Malaysian business. This was offset by the reduction in revenue following the disposal of its US retail businesses.
Frasers Group chairman David Daly commented: “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. Whilst post-pandemic issues with the global supply chain remain, there are signs that these are beginning to ease.”
Looking ahead, Frasers reiterated its full-year guidance for adjusted pre-tax profit of between £450m and £500m.
The group has been on the acquisition trail in recent months. In addition to Sportmaster and Studio Retail, Fraser’s bought Missguided, I Saw it First and Mysale. And since the end of the half-year period, the company has acquired Gieves & Hawkes and Amara, and a stake in Hugo Boss.
The group noted that younger people, which make up a large proportion of the group’s shoppers, were still prepared to spend on clothes as they were more protected from rising energy bills, mortgage rates and even food costs.
“Employment numbers are still high and more people are living at home with their parents for longer and spending more of their take-home pay on going out and clothes,” said Chris Wootton, Frasers’ finance director.
He said the group was looking to buy more retailers in the UK and elsewhere in Europe in the coming months as the pressure on smaller firms and brands prompts many to seek new funding.
“Expect more deals to happen,” he said, adding that the group was in talks with a number of potential targets. “There is a lot of opportunity out there and there is bound to be more going forward given the current macro circumstances.”
