By Geoffrey Smith
Investing.com -- Frasers Group's (LON:FRAS) pivot away from its discount sports retailing business is coming just in time, it seems.
The retail group said it's still confident of meeting its full-year profit target of between £450 million and £500 million (£1=$1.2204), after the first half of its fiscal 2023 year in which adjusted pretax profit rose 39% to £267 million.
However, first-half growth was driven largely by acquisitions and by one-off gains on the sale of assets in the U.K. The core U.K. sports retail business performed weakly, with revenue falling 3.1%. The group's video game stores suffered a particularly sharp decline in sales, having boomed a year earlier as lockdown restrictions were eased.
"Whilst the macroeconomic environment is clearly challenging and the backdrop for the coming year is hard to predict with any certainty, we have strong strategic and trading momentum behind us," the group said as it announced its figures for the six months through October on Thursday.
Adjusted earnings per share rose 48% to 44.8 pence, well ahead of revenue that was up 13% in reported terms and up 3.9% adjusted for acquisitions. As such, underlying sales failed to keep pace with U.K. inflation, which ran at over 11% in the year through October.
Performance was helped by the group's move upmarket. Revenue at the Premium Lifestyle division, which includes the House of Fraser department store and Flannels, rose 25% to £533M and now accounts for 20% of overall sales.