Frasers Group has reported a significant rise in adjusted profit before tax, experiencing a 13.1% increase to £544.8m in the year ending 28 April 2024.
- Group revenue saw a slight decline of 0.9% year-on-year, influenced by decreases in retail and financial services revenue and a rise in property revenue.
- The strong performance of the Sports Direct business was counterbalanced by planned declines in Game UK and Studio Retail, and House of Fraser store closures.
- International growth was notable, propelled by the acquisition of MySale in Australia, leading to a 3.3% sales rise.
- CEO Michael Murray highlighted new brand partnerships and operational efficiencies as key drivers for future growth.
Frasers Group achieved a noteworthy 13.1% rise in adjusted profit before tax, reaching £544.8 million despite a modest dip in overall revenue. The company’s strategy focused on elevating its market position has started to yield benefits.
Revenue for the group decreased slightly by 0.9% to £5.53 billion, attributed to a 1.3% decline in retail revenue and an 11.2% reduction in financial services revenue. However, property revenue surged by an impressive 101.4%.
The core Sports Direct business manifested robust trading results which were, however, negated by strategically planned sales declines in other areas such as Game UK and Studio Retail. Moreover, the impact of House of Fraser store closures and a weakened luxury market in the premium lifestyle division also contributed to the dip.
Sports Direct, representing 51.7% of total group sales, experienced a 3.3% fall in revenue. The premium lifestyle division, including brands such as House of Fraser and Flannels, saw a minor dip of 1.2% in sales, accounting for 21.7% of total revenue.
Frasers’ international retail arm reported a 3.3% sales increase, fueled significantly by growth in the Sports Direct International business and the acquisition of MySale in Australia during mid-FY23.
Despite a 20.5% drop in profit before tax from continuing operations, due to diminished foreign exchange gains and non-repeat of exceptional previous gains, the company forecasted adjusted profit before tax to be between £575 million and £625 million in the upcoming fiscal year.
CEO Michael Murray underscored that Frasers Group has established strong brand partnerships, embracing new entrants like The North Face, On, and Columbia, which fortified its retail ecosystem. The investment in warehouse automation and digital enhancements is expected to bear fruitful results by FY25.
The roll-out of Frasers Plus, including collaboration with a third-party partner THG, indicates burgeoning growth avenues, with the business poised for upcoming opportunities as it steps into the new financial year.
Frasers Group has solidified its position for future growth through strategic investments and partnerships despite facing revenue challenges.
