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Coronavirus

Frasers warns of £100m lockdown hit

The retail group said it anticipates making material accounting impairments to freehold properties, other property, plant and equipment, and IFRS 16 Right of Use Assets

Mike Ashley’s Frasers Group has announced it currently expects to take a hit in excess of £100m due to the impact of Covid-19 lockdown restrictions on non-essential retailers.

The announcement comes in response to the prime minister’s reopening roadmap unveiled yesterday (22 February) that sees non-essential retailers such as the Frasers Group unable to reopen until 12 April at the earliest.

The retail group said it anticipates making material accounting impairments to freehold properties, other property, plant and equipment, and IFRS 16 Right of Use Assets.

In an announcement to the stock exchange it said: “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 £100m.

“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.”

The news comes after Frasers revealed it was withdrawing its previous guidance of a 20-30% boost in its profits for the year back in December, after the government announced plans for a third national lockdown.

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