Frasers Group saw total revenues increase 4.4% from last year's £2.65bn to £2.77bn in the first half of fiscal 2024. This was attributed to retail growth combined with revenue from acquisitions in the property segment.
Retail revenue was up 4% to £2.68bn with Frasers Group stating this was largely due to the impact of the businesses it acquired in H2 of FY23 and a strong underlying performance from Sports Direct.
The cash inflow from operating activities, excluding working capital movements, reached £441.1m, marking a notable increase of £51.2m (13.1%). This growth was largely driven by strong trading performance particularly in Sports Direct.
H1 net assets increased to £1.74bn as opposed to £1.39bn in the same period the previous year. The increase from 30 April 2023 (£1.69bn) was due to the H1 profitability of the Group offset by share buybacks.
Michael Murray, chief executive officer of Frasers Group, believes the company's elevation strategy continues to drive strong trading performance across the business with good growth in Sports Direct supported by its brand partners.
He said: "We have delivered a strong performance in the first half of the year, with great momentum as we head into the Christmas trading period. Our long-term ambitions for our Premium Lifestyle business remain unchanged although it is likely that progress will remain subdued for the short to medium term in the face of a softer luxury market however, we continue to invest with confidence in our unique proposition.
"During the period, we have opened new elevated stores, and further strengthened brand partnerships to allow us to deliver the best consumer experience. I am also excited about the potential of our strategic investments which we expect to unlock further opportunities for the Group. We have a clear ambition to be the leading sports retailer in EMEA and we are making progress on broadening our footprint through a focused international M&A strategy."
Acquisition remains 'key' influencer in Frasers performance
GlobalData retail analyst Zoe Mills says the acquisition strategy of Frasers Group remains a key factor influencing its performance, with group revenue up £117.6m in H1 FY2023/24 to reach £2.77bn.
However, she noted that this "deceleration" in growth to 4.4% compared to 12.7% in H1 FY2022/23 was expected due to the current challenging retail market and the luxury sector in particular is proving difficult due to the cost-of-living crisis in both the UK and internationally.
Mills said: "With the exclusion of acquisitions and disposals, revenue increased by just 0.8% in the period, highlighting more starkly the tough economic climate. Profits have proven resilient at the Frasers Group, with adjusted profit before tax (APBT) up 12.6% in H1 at £303.8m. The continued success of its Sports Direct elevation strategy has driven this profit performance, where improvements to product mix through brand partnerships have supported enhancements to gross margin."
As for its Premium Lifestyle segment, Mills highlighted that while the bubble has burst somewhat for this category, excluding acquisitions and disposals revenue decreased by 11.2% in H1 FY2023/24, the Frasers Group is playing the long game as it hopes to wait out what it sees as a temporary lull in demand.
Moving forward, Murray noted Frasers Group is looking forward to the Christmas trading period and building a diverse business of sustained multi-year growth. This includes substantial ongoing investment into Frasers' elevation strategy, infrastructure and continued integration of new business to unlock the conglomerate's potential, and he expects further profitable growth for FY25 and beyond.
The Frasers Group added that it plans to strengthen its position internationally and remains committed to its ambition of being the leading sports retailer in EMEA.
