FRASERS GROUP (FRAS) – Retail
| Price: 724p unch | P/E: 7.8x |
| Market Cap: £3.1bn | Yield: n/a |
Retail group Frasers posted a solid first-half trading update for the period to 26 October and confirmed its full-year adjusted pre-tax target of £550 million to £600 million despite ‘tough market conditions’ which have continued into the second half.
Sales for the first six months were up 5% to £2.58 billion driven by exceptional international growth of 43% and a recovery in Premium Lifestyle sales though its Flannels division.
EPS rose sharply from 40.5p to 76.4p but the bulk of this came from fair value gains on derivatives in ‘strategic investments’, which include a 25% stake in Germany’s HUGO BOSS.
Our View
We wouldn’t get too carried away with these results, especially the more than doubling of EPS on the back of a rally in its holdings such as BOSS where it got very lucky with its timing.
In fact, we would ascribe a zero multiple to this type of ‘earnings’ and focus on the adjusted number which showed a small decrease in line with pre-tax profits.
Read the press release here: https://frasers.group/financials/shareholder-information
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