Frasers Group, the retail powerhouse behind popular UK brands like Sports Direct, House of Fraser, and Flannels, has announced impressive financial results for the first half of the fiscal year. The company experienced significant growth in revenues from its operations in the UK and Europe, although its “rest of world retail” division saw a decline. Overall, the group’s total revenue increased by 23.6% to reach £2.339 billion.
The UK sports retail sector was a major contributor to Frasers Group’s success, with revenues soaring by 27.6% to £1.367 billion. The premium lifestyle segment, driven by the expansion of Flannels stores, online growth, and the reopening of physical stores after lockdown, also performed exceptionally well, with a surge of 33.6% to £427.9 million.
Frasers Group also witnessed notable growth in its European retail operations, with revenues increasing by 13.6% to £399.8 million. This growth was driven by strong performance in Ireland and easier year-on-year comparisons due to the impact of previous year’s lockdowns. However, the rest of the world retail segment experienced a decline of 14.9% to £65.6 million.
On a positive note, the wholesale and licensing division of Frasers Group saw a growth of 10% to £79.4 million. The group’s gross margin also slightly improved, rising from 44% to 44.7%. Additionally, pre-tax profit witnessed an impressive surge of 75.3% to reach £186 million, with profit after tax increasing by 70.3% to £143.7 million.
Despite the strong financial performance, Frasers Group is cautious about the uncertain business landscape. The company recognizes the potential impact of cost increases, supply chain disruptions, and constraints on consumer spending. Additionally, the ongoing Covid-19 pandemic poses a continuous risk, with the potential return of restrictions and lockdowns. As a result, Frasers Group anticipates achieving an adjusted profit before tax ranging between £300 million and £350 million for the financial year ending on April 24, 2022. However, this projection is contingent on the absence of significant lockdown measures, particularly during the crucial Christmas period.
Frasers Group is pleased with its exceptional first-half performance and remains dedicated to making long-term investments. The company plans to expand its store estate and enhance its digital and fulfilment capabilities. Two Flannels flagship stores in Sheffield and Leicester have been opened recently and have exceeded expectations. Furthermore, Frasers Group is investing in automation at its Shirebrook warehouse and has acquired land in Bitburg, Germany, showcasing its commitment to expanding fulfilment capabilities in Europe. The development of a planned 1 million square foot warehouse in Bitburg will significantly contribute to the company’s growth in the region.
Despite the challenges posed by the current business environment, Frasers Group maintains an optimistic outlook for its future prospects. Through strategic investments and prudent management, the company aims to navigate uncertainties and maintain its growth trajectory in the competitive retail industry.
Useful links:
1. Frasers Group Official Website
2. Frasers Group on Reuters
