Profits jump at Frasers despite revenue dip

18th Jul 2024 07:02

(Sharecast News) - Mike Ashley's Frasers Group posted annual profits at the top of guidance on Thursday, despite a dip in revenues.

The FTSE 100 retailer, which owns Sports Direct, House of Fraser and Evans Cycles, among others, said group revenues in the 52 weeks to 28 April fell 0.9% to £5.5bn.

Within that, revenues from international retail rose 3% to £1.3bn. But UK sports retail fell 3% to £2.9bn, and premium lifestyle sales were down 1% at £1.2bn.

Frasers said that a strong performance at Sports Direct was offset by expected declines in Game UK and Studio Retail, as well as planned House of Fraser store closures and a softer luxury market.

Although best known for Sports Direct, Frasers has increasingly been adding high-end brands to its portfolio, including luxury retailer Flannels and a stake in Germany's Hugo Boss.

Group operating profits fell 3% to £520.6m, while pre-tax profits from continuing operations were down more than 20% at £507m, hit by a decrease in foreign exchange gains.

Adjusted pre-tax profits, however, were boosted by a lack of exceptional items compared to the previous year, and came in at £544.8, a 13% uplift and at the top end of guidance, for between £500m and £550m.

Michael Murray, chief executive, said: "This has been a break-out year for building Frasers' future growth.

"We expanded our retail ecosystems, establishing valuable partnerships with new brands. Our brand relationships have never been stronger, giving us invaluable support as we continue the international expansion of our business."

Looking ahead, Frasers noted: "As we move in the 2025 full year and a summer of sport, we remain confident that our strategy will drive continued strong performance. We expect significant synergies from both our automation programme and the integration of acquisitions."

It is currently forecasting adjusted pre-tax profits of between £575m and £625m for the current year.