Sports Direct has reported a rise in first-half earnings but cautioned that there will be “significant challenges” in turning around House of Fraser.
The retailer, controlled by tycoon Mike Ashley, posted a 15.5% rise in underlying EBITDA, excluding House of Fraser, of £180.3m in the period to October 28.
Group revenue rose 4.5% to £1.79bn.
Ashley said there was much work to do to turn around House of Fraser, which he acquired from administrators in the summer.
House of Fraser suffered an underlying EBITDA loss of £31.5m in the 11 weeks to October 28.
He said: “I have made my views clear that I believe the previous House of Fraser senior management team traded the business whilst it was insolvent for a long time, this means we have significant challenges ahead in turning House of Fraser around.
“However, I genuinely believe we have acquired a fantastic opportunity and with the efforts of Sports Direct and House of Fraser teams, and the support of the brands, local councils and landlords, we can turn House of Fraser into the Harrods of the high street.”
He was pleased with performance at the core business, which reflects the success of Sports Direct’s ‘elevation’ strategy.
Over the full year, Ashley expects EBITDA, excluding House of Fraser, to rise by between 5% and 15%.
Including House of Fraser, he expects it to be “behind last year’s result”.
Separately, Sports Direct reported that Cally Price will join its board as non-executive workforce director on January 1, following her election as a representative in September.
Price is a store manager in Cardiff Bay and originally started with Sports Direct as a zero hours worker in 2007.
She will formally take over as workers representative when incumbent Alex Balacki’s term ends in May 1.