Frasers Group H1 profit up, outlook cautious

Frasers Group revenue was up 23.6 percent to 2,339.8 million pounds in the first half, largely due to the strong reopening of stores after lockdowns, continuing strong online performance, and the comparative period being impacted by lockdowns as a result of Covid-19.

The company said that its performance continues to be strong in both - the store estate and online. However the company remains cautious with a number of macroeconomic headwinds on the horizon in the form of but not limited to cost increases, supply chain issues and potential squeezes on consumer spending power. There is also still the risk that Covid-19 measures could adversely affect outlook and Frasers is now seeing restrictions return, including lockdowns in Europe.

“With a successful half year’s trading mitigated to some extent by our conservative forecasting and based on the above mentioned headwinds, we still believe we can achieve an adjusted PBT of between 300 million pounds to 350 million pounds by the end of the financial year, assuming no significant UK lockdowns before then,” said David Daly, non-executive chair, Frasers Group.

Frasers Group reports rise in profit

The company’s gross margin increased 70 basis points to 44.7 percent, while adjusted PBT was up 61.7 percent. Excluding acquisitions and on a currency neutral basis adjusted PBT was up 88.4 percent and adjusted basic earnings per share increased by 66.9 percent to 29.2p. Reported profit before tax increased by 75.3 percent to 186 million pounds.

The company added that UK sports retail revenue increased by 27.6 percent, largely due to the reopening of stores after the last lockdown in March 2021 and the comparative period being impacted by lockdowns as a result of Covid-19. Excluding acquisitions, revenue increased by 27 percent.

Premium lifestyle revenue increased by 33.6 percent, largely due to new Flannels stores, continued growth in online, and the reopening of stores after the last lockdown in March 2021. Flannels CAGR from taking full ownership in FY18 to the end of FY22 H1 is 40 percent.

European retail revenue increased by 13.6 percent, largely due to strong growth in Ireland and the lockdowns experienced in the prior year, while excluding acquisitions and on a currency neutral basis, revenue increased by 18.4 percent.