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Acquisitions drive Frasers Group revenue up 12.7% in H1

Tom Shearsmith
08 December 2022

Frasers Group has reported that revenues increased by 12.7% in H1 ending 23 October 2022, largely due to acquisitions.

Excluding acquisitions, disposals and on a currency neutral basis, the company, which owns Sports Direct, House of Fraser, and Flannels, said group revenues increased by 3.9%.

Looking at the business by category, UK sports retail revenue increased by 11.6%, largely due to the acquisition of Studio Retail Limited on 24 February 2022. Excluding acquisitions, revenue decreased by 3.1%, which is largely due to a reduction within the Game UK business and the strong consumer response to the reopening of stores after the last lockdown in the same period last year.

Premium lifestyle revenue increased by 24.7%, largely due to new Flannels stores and continued growth in online. Excluding acquisitions, revenue increased by 22.2%.

International retail revenue increased by 5.8%, largely due to the acquisition of Sportmaster on 16 May 2022 and an increase in the Malaysian business, offset by the reduction in revenue following the disposal of the US retail businesses on 25 May 2022.

Group gross margin decreased to 42.0% from 44.7% in line with previous guidance. According to the business, the decrease reflects the mixed effects from the acquisition of Studio Retail, the disposal of the US retail businesses and House of Fraser store closures, a strong prior year comparative of full price trading, cost of goods inflation, and a maintained inventory provision percentage in the current period

Reported profit before tax for the six month period was £284.6m, up 53.0% compared to the same period in 2021.

In the last month, Frasers Group has also acquired Savile Row tailor Gieves & Hawkes, online homeware retailer Amara, as well as an additional stake in Hugo Boss.

Looking ahead, Frasers Group acknowledged the macroeconomic environment is still challenging and the "backdrop for the coming year is hard to predict with any certainty". However, the company said it has "strong strategic and trading momentum" and remains confident in its guidance to deliver adjusted profit before tax of between £450m to £500m for the financial year.

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