5th Aug 2021 09:12
(Alliance News) - Sports Direct owner Frasers Group PLC on Thursday posted a hefty profit fall and confirmed founder Mike Ashley will step down from the chief executive role.
Ashley will move to an executive director role, paving the way for future son-in-law Michael Murray to become the company's new boss. The plan was first reported by the Telegraph newspaper on Tuesday.
CEO Ashley founded the company in 1982 and still owns 64% of it. He had been executive deputy chair until taking back over as CEO in 2016.
Frasers, which also owns House of Fraser, said it is discussing transitioning the CEO role from Ashley to Murray over the course of the 2022 financial year. It is currently proposed that Murray will assume the role on May 1 next year and that Ashley would step down as CEO but remain on the board as an executive director.
Murray is currently the company's "head of elevation", meaning upgrading stores.
Frasers said: "The board consider it appropriate that Michael leads us forward on this increasingly successful elevation journey."
Also on Thursday, Frasers reported a huge drop in full-year profit, down to GBP8.5 million in the 52 weeks to April 25 from GBP143.5 million the year before. This was on revenue that fell 8.4% to GBP3.63 billion from GBP3.96 billion.
It was bleak year for the Shirebrook, Derbyshire-based company, as the UK retail sector was battered by Covid-19 lockdowns.
Its UK Sports Retail unit, the company's largest revenue contributor, was hit by store closures but did see growth in its online business. UK Sports Retail revenue was 11% lower at GBP1.97 billion.
Since UK stores re-opened, trading has topped expectations, Frasers said.
"Our online channel continues to significantly outperform pre-Covid-19 periods. Nonetheless, management remains of the view that there is a high risk of future Covid-19 pandemic restrictions, likely to be over this Winter and maybe beyond," Frasers added.
"The board of Frasers Group has continued to consider the probable return of restrictions during FY22, including within its accounting judgements and estimates for FY21. As the effects of the Covid-19 pandemic continue to cause future uncertainty, including the Delta variant surge we are currently seeing, the board of Frasers Group considers it cannot currently confirm with enough material accuracy what the outcome for FY22 will look like."
It decided against providing guidance for the new financial year.
Frasers shares were 0.6% lower at 611.50 pence each in London on Thursday morning.
By Eric Cunha; [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.
Related Shares:
Frasers Group