Frasers doubles forecast Covid hit to £200m on fears of third wave
Sports Direct owner says more restrictions 'almost certain'
Mike Ashley’s Frasers Group has doubled its Covid-related impairments estimate to £200m as it believes a third wave of the virus will lead to "almost certain" new restrictions.
The company, which includes the Sports Direct and Frasers retail brands, said it had based the decision on government statements outlining Britain’s path out of lockdown restrictions. Fraser's in February said it expected to book a non-cash impairment charge in excess of £100m on property and other assets.
Non-essential stores are set to re-open on April 12 as the UK as part of a plan to ease curbs imposed on January 4 as a second wave of the virus forced a third lockdown. However, renewed surges in cases across Europe have tempered government optimism about the pace of recovery from the crisis.
“In our ongoing assessment we note the continuing government and government advisor pronouncements regarding ‘third waves’ and normality being ‘some way off’, meaning further restrictions are in our view almost certain,” Frasers said in a statement on Friday.
“We also note the Covid-19 affected experiences, estimates, and judgements from other leading retailers.”
Frasers said the impairment would be in addition to charges included in its half year results announced last December and was expected to be included in full-year results.
Only the group’s Evans Cycles bike chain, classed as an essential retailer, has been able to trade throughout the high street lockdowns.