Mike Ashley’s Frasers Group sees boost to half-year profits

Frasers Group has reported an increase of pre-tax profits of nearly 18 per cent in the 26 weeks to 25 October.

The retail giant, owned by Mike Ashley, saw an overall group revenue decrease of 7.4 per cent.

UK Sports Retail revenue was down by 9.8 per cent, which the group said was largely caused by temporary store closures due to COVID-19, offset by growth to the company’s online business.

Over the half year period the business saw underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rise by 24.9 per cent to £226.3 million compared to £181.2 million in 2019.

The group said that with the successful reopening of its stores across England on 2 December 2020, combined with continuing strong online performance, it could confidently raise the bottom end of its full year guidance for FY21 to a 20 per cent – 30 per cent improvement in underlying EBITDA.

David Daly, non-executive chair at Frasers Group, commented on the financial results in a statement: “Unfortunately the Covid-19 crisis continues to be a significant issue for all of us and we are currently living through a second wave. This has resulted in more lockdowns and restrictions which are materially impacting the business.

“From 5 November virtually all of our Group stores in England were closed until 2 December. Our stores in Scotland and Northern Ireland largely remained open, but in Wales were closed from 23 October to 9 November. Across much of Europe further restrictions have caused stores in a number of countries to close at various times. Against this backdrop, our online offering remains resilient and helps to mitigate to a certain extent the negative effect caused by these bricks and mortar closures.”

He added “I do not wish to comment on the wider Covid-19 picture but from a general retail perspective it is impossible to ignore the lack of clarity of guidance when it finally arrives.

“Fortunately the Frasers Group is a strong business built on solid foundations. We can weather most of the storms faced this calendar year, however much of the UK High Street, which was already suffering before Covid-19, won't survive unless the Government addresses the out-of-date business rates regime which is due to return come April 2021.”

Daly described the results as “pleasing” given the closure of stores earlier in the year, but warned that with the ongoing situation and restrictions the business would have to be “conservative with its judgements.”

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