Frasers Group PLC (LSE:FRAS) said it remains confident of delivering full-year pre-tax profits of between £450mln to £500mln as it posted bumper interim profits bucking the weak retail environment.
“Whilst the macroeconomic environment is clearly challenging and the backdrop for the coming year is hard to predict with any certainty, we have strong strategic and trading momentum behind us and we remain confident in our guidance,” David Daly, Frasers non-executive chairman said in the results statement.
The FTSE 100-listed retailer, owned by Mike Ashley, saw pre-tax profits rise by 38.8% to £267.1mln in the half-year to 23 October 2022 while group revenues advanced 12.7% to £2,638mln.
Analysts a City broker Liberum Capital described the numbers as "very impressive when set against the strong prior year period and tough trading backdrop."
The owner of Sports Direct said UK Sports Retail revenue increased by 11.6%, largely due to the acquisition of Studio Retail while Premium Lifestyle revenue rose 24.7%, largely due to new Flannels stores and continued growth online.
Margins did come under pressure, dropping to 42.0% from 44.7% reflecting mix effects, strong comparatives, cost of goods inflation, and a maintained inventory provision percentage.
Further expansion is likely in 2023 with the group planning growth “ both organically and through disciplined acquisitions” with “a number of opportunities currently being assessed” in Europe.
Frasers said it intends to invest around £600mln in a new distribution centre and offices in Coventry, with the acquisition of the CBS Arena in the city being part of this strategy.
No dividend was paid.