Frasers reports strong H1, forecasts continued profit growth

Frasers Group retail revenue increased by 4 percent for the 26 weeks ended 29 October 2023, largely due to the impact of businesses acquired in the second half and a strong underlying performance from Sports Direct.

Total group revenue increased 4.4 percent due to retail growth combined with revenue from acquisitions in the property segment.

Commenting on the outlook after strong first half trading, Michael Murray, chief executive of Frasers Group said: "We are looking forward to our Christmas trading period and remain confident of achieving APBT in the range 500 million pounds to 550 million pounds. We are building a diverse business for sustained multi-year growth."

Frasers posts strong H1 results

The company said in a release that group gross margin increased to 43 percent from 42.3 percent, while retail profit from trading increased by 74.5 million pounds or 25.7 percent to 364.7 million pounds.

Group profit increased by 12.6 percent to 303.8 million pounds and reported PBT was 310.2 million pounds, an increase of 8 percent, while reported profit after tax was 234.6 million pounds, an increase of 5.6 percent.

The group’s adjusted EPS increased by 8.3p or 18.3 percent to 53.7p and basic EPS reached 53p, an increase of 6.3p year-on-year.

"We have delivered a strong performance in the first half of the year, with great momentum as we head into the Christmas trading period. The elevation strategy continues to drive strong trading performance across the business with good growth in Sports Direct supported by our brand partners,” added Murray.

Frasers’ first half performance across core segments

UK Sports, representing 53.6 percent of total group revenue, reported an increase of 0.8 percent with Sports Direct more than mitigating a decline in Game UK and Studio Retail. Segment’s gross profit increased by 76.7 million pounds and gross margin increased by 490 bps to 44.4 percent.

The company added that Premium Lifestyle, representing 19.9 percent of total group revenue, increased by 3.1 percent, with the impact of planned House of Fraser store closures and a softer luxury market offset by sales from the businesses acquired from JD Sports Fashion plc in H2. Excluding acquisitions and disposals, revenue decreased by 11.2 percent. Segment profit from trading reduced by 35.1 million pounds.

International retail, 23.3 percent of total group revenue, saw revenue increase by 13.2 percent due to growth from Game Spain, and the Sports Direct business in Europe, especially in Ireland, as well as the acquisition of the MySale business in Australia at the end of H1 FY23. Excluding acquisitions and disposals, on a currency neutral basis, revenue increased by 12.7 percent. Segment profit increased by 4.1 million pounds or 5.5 percent.