Retail

Frasers Group anticipates £100-mn hit from lockdown

01 Mar '21

2 min read

Pic: Fraser Group

Frasers Group recently said it could take a hit in excess of £100 million due to the COVID-19-induced lockdown on non-essential retailers in the United Kingdom lasting until April 12. The Mike Ashley-owned firm said the lockdown is likely to hit its accounts, with impairments to freehold properties, other property, plant and equipment and right of use assets.

Prime Minister Boris Johnson announced his road map to reopening the economy recently, including plans that stores could welcome back customers by the spring.

In a statement to the stock exchange, Frasers Group said it “currently anticipates making material accounting impairments to freehold properties, other property, plant and equipment, and IFRS 16 ‘Right of Use Assets’.”

“Given the length of this current lockdown, potential systemic changes to consumer behaviour, and the risk of further restrictions in future, we believe this non-cash impairment could be in excess of £100 million,” it was quoted as saying by British media reports.

“Any such impairment would be in addition to impairments included in the half year results announced on 10 December 2020 and is expected to be included, subject to audit, with the company’s results for the financial year ending April 2021,” it added.

In December, the group issued a rare profit warning, saying previously published guidance of a 20 per cent to 30 per cent boost in profits this year was unlikely to be achieved.

The majority of Frasers Group’s retail portfolio fell into the ‘non-essential’ category, although the Evans Cycles fascia has been allowed to remain open.

Fibre2Fashion News Desk (DS)

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