Mike Ashley’s Frasers Group retail empire has seen sales almost top £4bn following a year of acquisitions – and says it hopes to take advantage of empty shops in shopping centres to drive further expansion.
The billionaire Newcastle United owner has also called on the Government to raise corporation tax by 1%, as the group highlighted how it has worked to be a “good corporate citizen” during the year.
His comments came in the delayed results for the group - the second consecutive annual delay - which showed sales across its brands, including House of Fraser, Sports Direct and Evans Cycles, jumped 6.9% to £3.96bn in the 12 months to April 26.
Reported EBITDA – a measurement of profit before tax – also rocketed by 98.7% to £551m following a year of further acquisitions for the retail entrepreneur which saw it add new stores and retailers Jack Wills & Sofa.com to the group.
Reported pre-tax profit fell by 19.9% to £143.5m, but the firm said that without the new IFRS 16 reporting rules, reported profit before tax was £262.3m, up 46.4%, thanks to gains made on the sale and leaseback of the Shirebrook Distribution Centre totalling £84.9m.
The group said the big jump in profits is predominantly as a result of the change in reporting.
Sports retail revenue increased by 0.7%, largely due to the Game acquisition in the period – but the group said that, excluding acquisitions, revenue decreased by 14.6% as a result of temporary store closures due to Covid-19.
The group painted a bullish picture for the future of the high street at a time when others are fleeing, saying the emptying of the high street and shopping centres could prove lucrative for the firm, with more space available to expand.
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The company also plans to invest "in excess" of £100m on upgrading its digital platforms and pushing its designer label business Flannels.
Bosses are keen to push their "elevation" strategy to improve stores and win over more customers with premium products - and away from previous criticisms of crowded stores and neverending discount events.
This includes building strong relationships with Adidas and Nike, who spent much of the past decade shifting away from Mr Ashley and his preferred style of aggressive business.
The company said there are also plans to open Sports Direct, Evans Cycles and Game on the same sites, although no numbers were given for openings.
Owner and chairman Mike Ashley said the Covid-19 pandemic has had a significant impact on the business, and used the accounts to highlight work the firm had done to be a good corporate citizen, including sending supplies to the Salvation Army, a container of clothing to homeless charities in Central London, free gym bags to NHS charities in Nottingham and donating around 4,000 Easter eggs to local hospitals in Nottingham, Chesterfield and Mansfield.
It added that during the severe flooding in South Wales at the beginning of the year, it sent 18 pallets of cleaning supplies and personal protective equipment (PPE) to help with the clean-up operation – and also backed an increase in tax to go to the NHS.
Mr Ashley added: “As a business, we would also support a 1% increase to corporation tax on the proviso the full 1% goes directly to the NHS and we call on the government to seriously explore this idea.”
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He said the financial year will likely be remembered as “the most challenging year in the history of the company”, saying: “The Covid-19 situation had a significant impact on our business performance across the Group in March and April (and continued to do so in the post year end period) due to the shutdown of retail stores.
“Thankfully, as at the date of release of these financial statements, there is a semblance of normality returning with virtually all retail stores now fully open across the Group, albeit subject to strict social distancing measures.
“We will continue with the elevation strategy and the expansion of the new store format supported by our talented and loyal staff and we consider we are well placed for the future.”
As of April 26 the group had 769 海角视频 sports retail stores and 179 premium lifestyle sites.
Department store House of Fraser has been particularly troublesome for the business, with Mr Ashley saying previously on reflection he probably would not have bought it.
There were no new details on how the brand will become profitable, but Frasers said: "There are anticipated to be further closures over the coming period, the number of which will depend on the outcome of lease negotiation."