Frasers Group reports a 5% increase in its annual core earnings

In a report on Thursday, Frasers Group (LON: FRAS) said that its annual core earnings for fiscal 2019-20 came in 5% higher, that sent a wave of celebration in Britain’s retail sector that has been under fierce pressure in recent months due to the Coronavirus pandemic.

Formerly known as Sports Direct, the company also expressed confidence that its core earnings will see an up to 30% growth in the current fiscal year. Learn more the statement of changes in equity.

Frasers to invest £100 million in online activities

The largest British sports goods retailer was pushed into closing its stores in the United Kingdom on 23^rd March. The stores remained in lockdown until 14^th June. Operations in the rest of Europe, as per Frasers, were also significantly disrupted due to COVID-19. But its e-commerce segment helped offset the decline.

The British retail group said it reopened all of its stores for the public in recent weeks and that performance upon resuming operations was robust so far.  

Frasers also expressed plans of expanding its footprint in e-commerce with an additional £100 million of investment that will primarily be directed at enhanced customer experience and its Flannels designer fashion segment.

In the year that concluded on 26^th April, the British firm reported £302.1 million of core earnings as compared to £287.8 million in the previous year. In terms of full-year revenue, it saw a 6.9% growth to £3.96 billion on the back of several acquisitions, including Sofa.com, Jack Wills, and GAME.

Frasers Group’s net debt slides to £366 million

Frasers also highlighted on Thursday that its net debt slid to £366 million in the recently ended financial year. Mike Ashley’s company invested in Germany’s Hugo Boss and luxury brand Mulberry this year. It was also rumoured to be considering a takeover of DW Sports earlier this week.

On Thursday, Frasers Group jumped a little under 20% on market open. Settling at 351 pence a share, the stock is still roughly 25% down as compared to its price at the start of 2020. At the peak of COVID-19 in March, Frasers had dropped to 183 pence a share.

In comparison, Frasers’ performance in the stock market was reported largely upbeat in 2019 with an annual gain of about 90%. At the time of writing, the retail company has a market cap of £1.81 billion and a price to earnings ratio of 14.00.