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Frasers Group PLC shares fell on Thursday as it reported weaker annual earnings, as the Sports Direct and Flannels owner noted ‘headwinds caused by last year’s budget’. Shirebrook, England-based Frasers, founded by high street billionaire Mike Ashley, said pretax profit weakened 24% to £379.4 million in the 12 months to April 27 from £501.0 million the year before. Revenue declined 7.4% to £4.93 billion from £5.32 billion, while basic earnings per share fell 22% to 67.50 pence from 86.80p. ‘I’m pleased with our performance this year, despite the headwinds caused by last year’s budget,’ Chief Executive Michael Murray said. ‘Our relationships with the world’s best global brands, including Nike, adidas and Hugo Boss, are the strongest they have ever been, and our ambitious growth plans are now strengthening and scaling these partnerships even further.’ Overall retail revenue fell 7.4% to £4.75 billion from £5.1 billion. Within that category, UK Sports Retail revenue declined 7.2% to £2.70 billion, Premium Lifestyle was down 15% to £1.05 billion. International Retail revenue climbed 1.3% to £1.01 billion. Property revenue increased 19% to £86.6 million from £72.7 million, while Financial Services revenue fell 23% to £85.3 million from £111.0 million. Retail profit from trading increased 2.0% to £747.3 million from £732.8 million. The company said it delivered £127.2 million of ‘underlying cost savings and synergy benefits’ during the year, primarily from investments in warehouse automation and acquisitions. For the next financial year, it said it expects to incur at least £50 million of costs stemming from the 2024 budget. The UK budget included an increase in employer national insurance contributions. Frasers cut its profit outlook in December amid tougher trading conditions. However, it said it is now seeing ‘positive momentum’ so far in the new financial year with ‘more encouraging’ sales trends, as UK consumer confidence and trading conditions improved. It said it expects adjusted pretax profit in the range of £550 million and £600 million for financial 2026. In the year just ended, adjusted pretax profit rose 2.8% to £560.2 million from £544.8 million. Citing cost cuts through the use of artificial intelligence and acquisition synergies, Frasers said: ‘We will not compromise on our ambitious plans to build a broader platform for long-term growth and remain fully committed to sustained long-term investment in our successful elevation strategy and international expansion.’ ‘Longer term, we remain excited by the potential across the group, especially for Sports Direct after our significant recent step up in international expansion, and for Frasers Plus, and expect these to contribute to our ambitious plans for developing and delivering multi-year, sustainable profitable growth.’ The company said it has decided not to pay a final dividend for financial 2025, unchanged from the prior year. ‘The board remains of the opinion that it is in the best interests of the group and its shareholders to preserve financial flexibility and facilitate future investments and other growth opportunities. The payment of dividends remains under review,’ it said. Shares in Frasers were up 1.7% at 656.00p in London on Thursday morning. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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