FRAS: Risk/reward less favourable; d/g to UP

Research evidence excerpt

FRAS: Risk/reward less favourable; d/g to UP

423.2 any offer. FRAS would be more exposed to premium apparel and we PBT, Adj 560.2 555.1 583.4 616.0

estimate financial leverage will increase from 1.3x to approaching 2.0x net Prev. 557.1 593.8 629.9

debt to EBITDA. Frasers has followed up with a nil-premium takeover offer

for Accent Group in Australia, which our team expects to be rejected. In All market data in GBp; all financial data in GBP; dividends paid in GBp.

Premium Lifestyle Flannels has provided Frasers with an attractive store Priced as of prior trading day's market close, EST (unless otherwise noted).

rollout story, although this is nearing the end of its expansion phase with

over 80 locations across the country.

New international opportunities but mixed track record. International

sales represent c.30% of group sales and this provides Frasers with a longer

term growth opportunity eg by returning XXL in the Nordics to profitability

and scaling up Holdsport in southern Africa. We think this expansion

provides an attractive longer term opportunity for growth, albeit we point

out Frasers' mixed track record internationally, given the challenges of

localisation, and having the right infrastructure to support the business.

Property and Financial Services provide additional sources of value. FRAS

has continued to invest in property to secure space needs and increase

the value of the assets, but visibility on valuation and realisations is low.

Financial Services provides another revenue stream and although profits

are currently low, consumer uptake in Frasers Plus has been encouraging.

Valuation reflects complexity and lack of liquidity. We have nudged up our

FY26 EPS forecast owing to Frasers' share buyback, but broadly held for next