Frasers Group, under the direction of Mike Ashley, has embarked on a strategic £80m share buyback initiative.
- The company has entered a non-discretionary agreement with Barclays to facilitate this buyback.
- Scheduled during the closed period, the buyback aligns with the timeline for reporting the year’s financial results.
- A total of up to 10 million shares may be repurchased, with a cap of £80 million on total expenditure.
- The announcement follows a period of increased profits and revenue for Frasers Group.
Frasers Group, led by Mike Ashley, has unveiled its latest financial manoeuvre in the form of a share buyback programme valued at up to £80 million. This strategic initiative, announced on the 18th of June, reflects the company’s ongoing efforts to optimise its capital structure and enhance shareholder value. The buyback is facilitated through a non-discretionary agreement with Barclays Bank, acting via its investment banking division.
The timing of this buyback is particularly noteworthy, as it is set to occur during the company’s closed period, which extends until the announcement of the final results for the fiscal year ending 28 April 2024, expected in July. This move allows Frasers Group to manage its share capital efficiently without the usual market pressures that accompany open trading periods.
Under the terms of the buyback programme, Frasers Group is authorised to purchase up to 10 million shares, ensuring that the total buyback expenditure does not exceed £80 million. As of the previous day’s close, the company’s shares were valued at 856 pence, highlighting the potential for significant capital return to shareholders through this programme.
The announcement coincides with Frasers Group’s latest financial performance results, which indicate a 4.4% increase in operating profits, amounting to £298.1 million for the six months ending on 29 October 2023. Additionally, the group’s revenues for the same period saw a 4.4% rise, reaching £2.76 billion.
Frasers Group’s UK sports retail segment, including the Sports Direct brand, contributed significantly to these results, generating over £1.5 billion—more than half of the total revenue, albeit with a modest 0.8% year-on-year growth. Conversely, the premium lifestyle division, featuring Flannels, experienced a 3.1% increase in sales, totalling £550.1 million, while the international retail arm recorded a notable 13.2% rise, amounting to £645.8 million.
The implementation of the share buyback programme underscores Frasers Group’s commitment to delivering sustainable growth and value to its shareholders amidst positive financial performance.
