- Frasers Group saw pre-tax profits rise 8% to £310.2 million in the first half
- The owner of Sports Direct revealed that total sales increased by 4.4% to £2.77 billion
- Michael Murray succeeded Mike Ashley as CEO of Frasers last year
Frasers Group is heading into the Christmas season “with great momentum”, the retailer's boss said on Thursday as the group reported first-half sales.
The group's pre-tax profit rose 8 percent to £310.2 million in the six months ended October 29, following robust performances at Sports Direct and international retail operations.
Revenue from the latter segment rose 13.2 percent to £645.8 million, thanks to the acquisition of Australian online marketplace MySale and the purchase of games consoles in Game Spain stores.
Bumper result: Frasers Group announces first half profit before tax increased to £310.2 million after robust performance at Sports Direct and international retail operations
Demand was further boosted by the growth of Sports Direct's Irish and UK operations, although poor sales at its Game UK and Studio Retail subsidiaries hampered trading at Frasers' UK sports retail business.
Total sales grew 4.4 percent to £2.77 billion as the company also benefited from acquisitions including JD Sports Fashion's non-core UK brands such as Tessuti, Giulio and Scotts.
The acquisitions helped boost sales in the group's premium lifestyle business by 3.1 percent, offsetting the effects of a weaker luxury market and the closure of House of Fraser stores.
Michael Murray, who succeeded his father-in-law Mike Ashley as CEO last year, said: “We delivered a strong performance in the first half of the year, with great momentum as we enter the Christmas trading period.
'The elevation strategy continues to deliver strong trading performance across the business, with good growth at Sports Direct, supported by our brand partners.'
Frasers' 'elevation' strategy has seen the Derbyshire-based group strengthen ties with major brands, target affluent consumers and invest more in flagship stores and online operations.
For example, Frasers has formed partnerships with Nike and Adidas with the aim of expanding internationally, purchasing shopping centers in Castleford, Luton and Dundee.
The company is also pursuing 'strategic investments', building stakes in distressed retailers such as clothing sellers ASOS and Boohoo, white goods company AO World and upscale fashion brand Hugo Boss.
Victoria Scholar, head of investments at Interactive Investor, said: 'In this 'sink or swim' retail environment, Frasers has emerged as a winner in the sector, despite successfully weathering cost-of-living pressures managed to overcome.
'Marks & Spencer is another retailer that has emerged victorious, while several others have fallen by the wayside. No doubt Frasers will be pinning its hopes on a bountiful Christmas period during the Golden Quarter, which is so important for retail.'
Michael Murray noted that “strong trading momentum” had continued into the “early recent weeks of the second half.”
He added that the company was optimistic about achieving annual adjusted pre-tax profits of between £500m and £550m.
Frasers Group shares were 0.55 per cent higher at 913p on Thursday morning and have grown by around 26 per cent since the start of the year.