Bosses said they believe there will be further takeover opportunities for the business over the next year as economic pressures bite for many retailers. It came as the group, which is majority-owned by retail magnate Mike Ashley, told shareholders that revenues increased by 12.7 per cent to £2.64 billion over the six months to October 23. Pre-tax profits rose by 53 per cent to £284.6 million over the period.
Frasers said the performance showed that its elevation strategy - the growth plan aimed at expanding its upmarket business led by new chief executive Michael Murray - was on track. The strategy has seen the company grow its investment in German brand Hugo Boss to a stake of up to 34 per cent, while it also snapped up Savile Row tailor Gieves & Hawkes last month.
Murray said: “We have a clear strategic acquisition plan and we have been able to bring in strong brands that can help the wider business. Gieves & Hawkes, for example, taps into a longer-term trend towards formalwear and provides us with an extra expertise there that we can utilise across the business. There will be a lot of opportunities this year. As long as a business fits in with our strategy we will absolutely explore the possibility of acquiring more brands over the year.”
Murray, who took over from Ashley, his father-in-law, last year, also stressed the firm's commitment to British high streets, saying: “We are really committed to high street stores and have already seen results from investment in Flannels stores, and plan more in major cities across the country.”
The group, which also owns the historic House of Fraser department store business, cautioned that the economic backdrop was “clearly challenging” amid rising costs for consumers. It said it remains confident that it will meet its profit guidance of between £450m and £500m for the full year.
Adam Vettese, an analyst at social investing network eToro, said: “Given the trading environment, Frasers Group has delivered a solid set of numbers in its interims. Investors will also welcome the fact it has maintained its full-year profit guidance for the financial year. If you were to pick holes, it would be that the group’s year-on-year growth in revenue is down largely to the acquisition of Studio Retail. Without it, group revenue would be down 3.1 per cent. That’s disappointing, but it must be remembered that it’s set against a strong comparative period, when shops reopened post-lockdown.”
Victoria Scholar, head of investment at Interactive Investor, noted: “The well-documented pressures on the consumer with the cost-of-living crisis squeezing household budgets appear to be dividing the retail sector into either winners or losers with the owner of Sports Direct managing to land itself a position in the winning category thanks to its intelligent strategy to create key partnerships with strong brands.”