Frasers, the parent company of Sports Direct, House of Fraser and Flannels, continues to expand despite £50 million in extra costs after the Chancellor’s hike in national insurance contributions and minimum wages.
The shares are not that far away from 2022’s all-time high, says AJ Bell, though the company has never paid a dividend. However, it has run share buybacks and invested in its business or acquired assets.
Through its Elevation Strategy it is branching out into more premium brands and chains; expanding overseas and driving an efficiency programme.
First-half results for the six months to October are due on Thursday, and ultimately, analysts will then see if chief executive Michael Murray sticks to his forecast for the full-year to March of adjusted pre-tax profit between £550 million and £600mn. That compares to £560m a year ago.
The benchmark for the first-half results is the adjusted pre-tax profit of a year ago of £299m, when the stated pre-tax income number was £207m.
Analysts will look for any update on its 30% stake in Boohoo, where the two companies appear to have fought themselves to a standstill. Frasers’ attempts to buy Mulberry, where it has a 37% stake but is hemmed in by Challice’s 56% shareholding, and Revolution Beauty, in which Boohoo owns a 25% stake, are also stalled, at least for now.
The company has also been busy buying shopping centres, recently adding Braehead to the Overgate in Dundee and Frenchgate in Doncaster.
DIARY
Monday 1 December
- First-half results from Peel Hunt
- OPEC+ meeting
Tuesday 2 December
- Full-year results from OnTheBeach and Topps Tiles
- BRC shop price index
- UK mortgage approvals
- EU inflation
Wednesday 3 December
Thursday 4 December
- Full-year results from SSP
- First-half results from Frasers and Watches of Switzerland
- Trading statement from Balfour Beatty
- Purchasing managers’ index (PMI) for the construction industry in the UK
Friday 5 December
- Halifax UK house price index
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