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Frasers Group, owner of UK retailer Sports Direct, sounded the alarm on profits on Thursday, blaming weak consumer confidence around the Budget and sending shares down 11 per cent.
The retailer said it now expected to make adjusted profit before tax of between £550mn and £600mn for the year, slightly lower than its previous guidance of £575mn to £625mn.
The company said: “Both ahead of and after the recent Budget, consumer confidence has weakened and recent trading conditions have been tougher.”
Frasers, which will be relegated from the FTSE 100 this month following the latest reshuffle, also expects to take a hit of “at least £50mn” going into the next financial year as a result of measures announced by chancellor Rachel Reeves in October.
Chief executive Michael Murray, the son-in-law of majority owner Mike Ashley, said the first half of the year was “another period of progress for the evolution of our elevation strategy”.
The retailer, which started life as a single store in Maidenhead in 1982, posted an 8.3 per cent fall in group revenue to £2.5bn for the six months to October 27, while adjusted profit before tax — its preferred metric — fell to £299.2mn from £303.8mn during the same period last year.
Reported pre-tax profits from continuing operations were down by a third to £207.2mn.
Andrew Wade, an analyst at Jefferies, said despite the trading and operational headwinds following the Budget, “we are encouraged by the group’s strong strategic progress, particularly overseas, and retain our positive stance”.
Since he joined as chief executive in 2022, Murray has sought to modernise Frasers’ stores and improve relationships with suppliers such as Nike to be able to sell the most in-demand products.
He has also sought to bolster the retailer’s so-called premium lifestyle business, which includes upmarket chain Flannels.
Frasers has also remained highly acquisitive, buying other businesses outright or building stakes in other companies such as Boohoo and Asos. It is embroiled in a bitter battle with the former over the performance of the business and the composition of its board.
