Frasers Group plc, formerly Sports Direct International, reported Group revenue increased 6.9 percent to £3.96 billion in the 52-weeks through April 26. Excluding acquisitions and on a currency-neutral basis, revenue decreased 12.6 percent.

UK Sports Retail revenue increased by 0.7 percent to £2.2 billion, largely due to the Game acquisition in the period. Excluding acquisitions, revenue decreased by 14.6 percent, largely caused by temporary store closures due to COVID-19. UK Sports Retail like-for-like gross contribution was down 6.6 percent.

Premium Lifestyle revenue increased 34.9 percent to £722.0 million, largely due to new stores and acquisitions of Jack Wills & Sofa.com. Excluding acquisitions, revenue increased by 18.6 percent. Premium Lifestyle like-for-like gross contribution was up 21.8 percent.

European Retail revenue increased by 16.3 percent to £697.7 million, largely due to the Game acquisition in the period. Excluding acquisitions and on a currency-neutral basis, revenue decreased by 15.6 percent, largely caused by temporary store closures due to Covid-19. European Retail like-for-like gross contribution was down 12.7 percent.

Rest of World Retail sales were £174.2m for the year declined 19.3 percent to $ 174.2 million from $215.9 million.  Rest of World Retail includes sports stores in Malaysia trading under SportsDirect.comand retail stores in the U.S. trading under Bob’s Stores and Eastern Mountain Sports. In Malaysia, the Group has 31 stores which are 51.0 percent owned by the Group.

The Rest of World Retail segment had 75 stores, down from 84 a year ago. Eastern Mountain Sports had 20 versus 23;  Bob’s Stores had 24 versus 28; and Malaysia had 31 against 33.

Gross margin in the Rest of World Retail segment was 44.4 percent, up from 40.2 percent in the prior year. Underlying EBITDA loss was £6.8m, from a loss of £0.9m in FY19. This was largely due to temporary store closures in March and April 2020 as a result of Covid-19.

Companywide Group gross margin decreased to 42.0 percent from 42.8 percent, largely due to the GAME acquisition changing the product mix.

Group reported EBITDA increased by 98.7 percent to £551.0 million compared to £277.3 million in the prior period, largely due to the change in reporting as a result of implementing IFRS 16.

Group underlying EBITDA increased by 5.0 percent to £302.1 million compared to £287.8 million in the prior period. Excluding acquisitions and on a currency neutral basis, underlying EBITDA was in line with the prior period.

Underlying free cash flow (pre-capex) decreased to £263.1 million compared to£273.3 million in the prior period

Reported profit before tax was £143.5 million, down 19.9 percent from £179.2 million. Excluding IFRS 16, reported profit before tax was £262.3 million up 46.4 percent largely due to the gain on the sale and leaseback of the Shirebrook Distribution Centre totaling £84.9 million.

Underlying profit before tax decreased by 18.1 percent to £117.4 million from £143.3 million. Reported basic earnings per share fell by 14.4 percent to 18.5 pence, from 21.6 pence. Underlying basic earnings per share decreased by 8.0 percent to 16.2 pence from 17.6 pence.

Reported profit after tax was £101.0 million down 12.9 percent from £116.0 million.

Looking ahead, Frasers Group plc Mike Ashley, CEO, said, “The Group now intends to invest in excess of £100 million in its digital elevation strategy. With a particular focus on Flannels and an enhanced customer experience, this investment will be integral in supporting the continued growth of our online channels. This commitment will support the Group’s wider ongoing elevation strategy. With digital transformation now at the forefront, the successful reopening of our stores after the Covid-19 lockdown and continuing strong web performance, we are confident in achieving between a 10 percent and 30 percent improvement in underlying EBITDA(1) during FY21.”

Photo courtesy Frasers Group/Sports Direct