Frasers Group reports increase in half-year profits

Mike Ashley’s Frasers Group has reported an increase in profitability for the first half of the year despite dropping revenue related to Covid-19-linked store closures.

The group’s pre-tax profit for the 26 weeks to 25 October increased 17.6 percent to 106.1 million pounds.

In the same period, group revenue fell 7.4 percent to 1.89 billion pounds.

UK Sports Retail revenue decreased by 9.8 percent, while European Retail revenue fell by 3.7 percent, both largely due to temporary store closures though partially offset by growth in its online business.

Premium Lifestyle revenue increased by 4.8 percent, largely due to new Flannels stores and increased web sales.

Profits up at Frasers Group

The company was upbeat on its results and said the successful reopening of its stores in England this month combined with continuing strong online performance meant it could “confidently” raise the bottom end of its full year guidance for FY21, now expecting to achieve a 20-30 percent improvement in underlying EBITDA.

“Unfortunately the Covid-19 crisis continues to be a significant issue for all of us and we are currently living through a second wave. This has resulted in more lockdowns and restrictions which are materially impacting the business,” said Frasers Group chairman David Daly in a statement.

Daly said that against a tough backdrop of store closures across much of Europe, the groups’ online offering “remains resilient and helps to mitigate to a certain extent the negative effect caused by these bricks and mortar closures”.

Daly added that, while Frasers Group is well-positioned to weather the Covid storm, other smaller businesses won’t be so lucky if the government doesn’t address the “out of date business rates regime which is due to return come April 2021”.

This comes just days after Frasers Group confirmed it was in talks over a potential rescue of Debenhams, which is winding down business and closing its 124 stores, putting some 12,000 jobs at risk.

Photo credit: Frasers Group media centre