Sports Direct owner Frasers hails ‘break-out year’ as profits jump
Sports Direct owner Frasers Group has reported stronger profits as its boss hailed a “break-out year” after adding a string of new brands to its retail empire.
The company revealed it generated an adjusted pre-tax profit of £545 million in the year to the end of April, a 13% jump on the previous year.
This was despite its total sales dipping by 0.9% to £5.5 billion in the latest year.
Frasers said strong sales at Sports Direct were offset by a weaker performance at gaming retailer Game UK, planned House of Fraser store closures, and a struggling luxury retail market.
The sport industry is “not slowing down”, the company said, reporting high levels of consumer demand and plans to invest more in its stores and flagship shops.
“While sport moves from strength to strength, our premium and luxury division experienced the softening of the global luxury market felt by most high-end retailers and brands,” Michael Murray, Frasers’ chief executive said.
Frasers bought struggling retailer Matches for £52 million in December, but was forced to put it into administration a few months later, leading to a £12.5 million hit to its yearly profit.
The retail group also owns premium brands including Flannels, Jack Wills, Van Mildert and Hawkes.
Michael Murray, the group’s chief executive, said it had been a “break-out year for building Frasers’ future growth”, with it selling new brands such as The North Face and Columbia in the past year.
“Our brand relationships have never been stronger, giving us invaluable support as we continue the international expansion of our business,” he added.
Frasers also revealed that it had been investing in automation across its warehouses, which it expects to boost efficiency and profitability in the coming years.
The company said a “summer of sport” will help drive future sales, as it predicted a higher adjusted profit of between £575 million and £625 million for the next financial year.
Shares in Frasers jumped by about 8% on Thursday morning following the update.
Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, said: “Sports Direct remains the main event, accounting for more than half of the group’s total sales.
“Looking further ahead, performance in the new financial year is likely to get a boot in the right direction thanks to the football fever that a successful run at the men’s Euros created.
“Many football fans ran out to purchase replica shirts to wear while they cheered the national team along.”
