Pic: Frasers Group
The decrease in revenue was driven by drops in retail revenue across UK sports retail (down 7.6 per cent), premium lifestyle (down 14.1 per cent), and international retail (down 5.3 per cent). In contrast, property revenue grew by 21.0 per cent (YoY) to £38.0 million, while financial services revenue fell by 20.2 per cent, Frasers Group said in a press statement.
The retail operating costs of the company decreased by 11.2 per cent compared to £671.0 million in H1 FY24, leading to a slight increase in retail profit from trading by 0.2 per cent to £365.6 million. However, higher other operating costs reduced group profit from trading by 2.9 per cent YoY to £400.6 million.
The operating profit of Frasers fell by 10.5 per cent to £266.8 million (~$338.1 million) due to increased impairments (up 145.8 per cent) and realised foreign exchange losses of £8.8 million compared to a gain of £21.9 million in H1 FY24. Depreciation and amortisation rose slightly, while share-based payment costs halved. Reported profit before tax declined significantly by 33.2 per cent to £207.2 million, reflecting the challenging trading conditions and cost pressures during the period.
Adjusted profit before tax (APBT) declined 1.5 per cent YoY to £299.2 million (~$379.1 million) in the first half of FY25. The company delivered £74.7 million cost saving and synergy benefits from recent investments in warehouse automation and acquisitions.
“The first half of this year has been another period of progress for the group, delivering on our objectives as the elevation strategy continues to take the business to the next level. Sports direct UK delivered further sales growth, and our property and financial services divisions are seeing encouraging progress,” said Michael Murray, chief executive of Frasers Group.
“We continue to operate with discipline to ensure our business is as resilient as possible - proactively right-sizing recent acquisitions to set them up for profitable long-term growth and driving further automation benefits to exceed our stock reduction targets for the period. We have also made significant strides in international expansion, developing new partnerships across Australia and Africa, and unlocking opportunities as we move further towards our goal of becoming a leading global sports retailer. We are set to deliver another year of profitable growth but, given recent weaker consumer confidence leading up to and following the budget,” added Murray.
Outlook
For the full FY25, the company expects APBT to be in the range £550-£600 million. Further out, it also expects to incur at least £50 million of incremental costs going into FY26 because of the recent budget.
Fibre2Fashion News Desk (SG)