21st Jul 2022 18:13
(Alliance News) - Frasers Group PLC reported strong annual results under Michael Murray, as the new chief executive aims to follow in father-in-law Mike Ashley's footsteps.
The House of Fraser and Sports Direct owner on Thursday said annual profit surged, despite the "well-chronicled challenges" hitting the retail sector.
In the year to April 24 group revenue was up 31% to GBP4.75 billion from GBP3.63 billion. It said that this was largely due to the reopening of its stores after Covid-19 restrictions were lifted in March last year.
Pretax profit jumped to GBP366.1 million from GBP8.5 million.
It swung to an adjusted pretax profit of GBP344.8 million from a loss of GBP8.5 million. Adjusted pretax profit excludes the effects of exceptional items.
During the financial year, founder Ashley stepped down from his role as chief executive officer, paving the way for son-in-law Murray to become the company's new boss.
Previously, Murray was head of elevation, meaning upgrading stores. Its strategy to modernise the business is evident throughout the year with the opening of its new flagship Sports Direct in Birmingham and the seven-floor Flannels in Liverpool.
Looking ahead, Frasers said it is "well positioned for a successful year" and it plans to continue to invest in supporting and growing its partnerships with other brands.
It added that it expects adjusted pretax profit to be between GBP450 million and GBP500 million in financial year 2023.
AJ Bell's Russ Mould commented that despite the company's strong performance, it should be "viewed in the context of Covid recovery, with the comparative period negatively affected by lockdowns".
"One would have guessed sportswear and equipment sales might be vulnerable to a deteriorating economic climate, yet Frasers remains relatively upbeat. It's not a bad start for Michael Murray as the new chief executive, who has some big shoes to fill after taking over from father-in-law Mike Ashley. It helps that a business strategy was already in place when he took over, concentrating on both 'pile 'em high, sell 'em cheap' Sports Direct stores and posher, upmarket outlets," Mould said.
The stock closed up 27% at 949.50 pence on Thursday, the best performer in the FTSE 250.
By Arvind Bhunjun; [email protected]
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