Frasers Says Wage and NI Hikes Added £10 Million in Costs as Profit Misses Forecast
Updated
Updated · Retail Gazette · Jul 17
Frasers Says Wage and NI Hikes Added £10 Million in Costs as Profit Misses Forecast
2 articles · Updated · Retail Gazette · Jul 17
Summary
Frasers said minimum wage and employer National Insurance increases added about £10 million to last year's costs, hitting its Premium Lifestyle unit and helping send its shares down almost 6%.
That division's operating expenses rose £9.7 million and trading profit fell £9.8 million to £147.6 million, as higher employment costs outweighed better gross profit and other savings.
Premium Lifestyle sales dropped 6.9% to £975.7 million, though Frasers said Flannels returned to growth and cited "green shoots" in the luxury market.
Across the group, revenue rose 8.7% to £5.33 billion on acquisitions and a 59.2% jump in international sales, but adjusted pre-tax profit slipped 4% to £538 million, below its £550 million-£600 million target.
Frasers withheld new-year profit guidance, saying uncertainty over its takeover approaches for Hugo Boss and Accent Group could produce a range of outcomes; it may revisit guidance with half-year results.