Frasers Group’s H1 results, covering the period ending October, showcase a robust performance amidst a mixed retail environment. The company emerges as a notable winner in the UK and international retail scene, demonstrating resilience in the face of challenges, although not entirely immune to the luxury segment’s slowdown.
Financially, the results present a nuanced picture. Total revenue recorded a commendable 4.4% increase to £2.769 billion, with retail revenue rising by 4% to £2.681 billion. Acquisitions from the previous financial year and a robust showing by Sports Direct played pivotal roles in this positive trajectory. On a currency-neutral basis, excluding acquisitions and disposals, the revenue increased by a noteworthy 0.8%, highlighting resilience amid recent sales declines seen among industry peers.
Retail gross profit saw a substantial climb to £1.12 billion from £1.04 billion, contributing to a group gross profit of £1.19 billion, up from £1.12 billion. The group’s gross margin also witnessed improvement, reaching 43% from 42.3%. Retail profit from trading soared by an impressive 25.7% to £364.7 million, primarily driven by the strong trading performance of Sports Direct.
While group profit from trading experienced a slight dip of 6% to £412.5 million, operating profit showed a positive trajectory, rising by 4.4% to £298.1 million. Adjusted profit before tax displayed robust growth, increasing by 12.6% to £303.8 million. UK Sports Retail revenue demonstrated resilience, rising by 0.8% to £1.485 billion, constituting 53.6% of total group revenue.
Premium Lifestyle revenue saw a commendable increase of 3.1% to £550.1 million, although it was impacted by planned House of Fraser store closures and a softer luxury market. International Retail revenue experienced a significant uptick of 13.2% at £645.8 million.
CEO Michael Murray expressed satisfaction with the strong performance, emphasizing the momentum heading into the Christmas trading period. The elevation strategy proved instrumental in driving robust trading, especially in Sports Direct, supported by successful brand partnerships. Despite challenges in the luxury market, Murray reiterated the long-term ambitions for the Premium Lifestyle business, underscoring continued confidence in the company’s unique proposition.
Looking forward, Frasers Group anticipates achieving adjusted profit before tax in the £500 million to £550 million range for the full year, positioning the company as a resilient and positively poised player in a dynamic retail landscape.
