Despite a revenue decrease, Frasers Group’s profits have surged, highlighting strategic gains.
- Adjusted profit before tax rose 13.1% to £544.8m, even with a revenue decline.
- Revenue fell slightly by 0.9%, affected by mixed performances across divisions.
- Strategic brand partnerships and international expansion played crucial roles.
- Overall, the group remains optimistic about future growth prospects.
Frasers Group has demonstrated resilience by reporting a notable 13.1% increase in adjusted profit before tax, amounting to £544.8 million for the year ending April 28, 2024, despite facing a dip in revenue. This underscores the effectiveness of the company’s ongoing elevation strategy.
The group’s overall revenue saw a slight decline of 0.9% year-on-year, reaching £5.53 billion. This decrease was primarily influenced by a 1.3% drop in retail revenue, a substantial 101.4% rise in property revenue, and an 11.2% reduction in financial services revenue. Notably, the core Sports Direct business performed well, but this was countered by declines in sales from Game UK, Studio Retail, and the closure of House of Fraser stores, coupled with challenges in the premium lifestyle sector.
The UK Sports Retail division, which includes the Sports Direct brand and constitutes 51.7% of the group’s total sales, experienced a revenue reduction of 3.3%. The premium lifestyle division, encompassing brands like House of Fraser and Flannels and accounting for 21.7% of the group’s revenue, recorded a 1.2% decrease in sales. Despite these challenges, the company has made substantial progress in advancing its elevation strategy and forming robust brand alliances, successfully introducing new brands such as The North Face, On, and Columbia.
Internationally, Frasers Group’s retail arm, responsible for 23.3% of the group’s revenue, posted a 3.3% increase in sales, fueled by the expansion of the Sports Direct International business and the acquisition of MySale in Australia during mid-FY23.
Profit before tax from continuing operations decreased by 20.5% to £507 million, while operating profit experienced a slight drop of 2.7% to £520.6 million for the year. The company’s trading performance was hampered by reduced foreign exchange gains, non-cash fair value movements on equity derivatives, and the absence of exceptional gains from previous years.
CEO Michael Murray has termed this period a “break-out year” for Frasers Group, emphasizing the expansion of their retail ecosystem and the solidification of brand partnerships. Murray stated, “Our brand relationships have never been stronger, giving us invaluable support as we continue the international expansion of our business.” Additionally, the company has made investments in operational efficiencies, such as warehouse automation and digital infrastructure, and plans to leverage new growth opportunities through initiatives like Frasers Plus.
Frasers Group remains committed to pursuing growth, expecting adjusted profit before tax to fall within the range of £575 million to £625 million by the end of April 2025. The group is poised to capitalize on emerging prospects and sustain its growth trajectory through ongoing investments and strategic initiatives.
Frasers Group’s strategic direction and resilient performance hint at promising growth prospects ahead.
