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Highlights
- FTSE 250 listed Frasers Group Plc, which operates retail stores and an online portal, has announced a new share buyback program for its shareholders.
- The company intends to buy back a maximum of 10 million ordinary shares, with the maximum purchase price of all shares acquired to be £70 million.
FTSE 250 listed Frasers Group Plc (LON: FRAS), which operators through retail stores of various high street brands like Sports Direct and House of Frasers, has announced a new share buyback program for its shareholders. The company intends to buyback a maximum of 10 million ordinary shares, with the maximum purchase price of all shares acquired to be £70 million.
The new buyback program started on 13 December 2021 and conclude on the last trading day before the end of the financial year for the company, i.e., 24 April 2021. The company said the aim of the buyback program is to ease the share capital of the company.
Reportedly, companies are said to buy back their own shares from the market and hold them in treasure, resulting in a reduced number of shares available to the public, which sometimes push-up stock price due to demand-supply mismatch.
This is the second buyback program by the Frasers Group in 2021. The first £70 million buyback program started in October 2021.
First half-year result
The company recently announced its interim result for the 26 weeks to 24 October 2021. The business reported excellent growth in the first half, driven by the reopening of retail stores after lockdown and pent-up demand from customers. As a result, the company’s total revenue was up by 23.6% at £2,339.8 million, while its profit before tax stood at £186 million. The basic earnings per share (EPS) also improved to 28.2p per share from 16p during the same period last year.
The company’s net debt reduced considerably during the period from £248.9 million to £24.3 million. The retail stores and online portals performed well in the first half. The company has an optimistic outlook for the second half of the financial year and anticipates to achieve adjusted profit before tax in the range of £300m to £350m.
Frasers Group and its share price performance
Frasers Group Plc operates a chain of retail stores and online portals in the UK and other countries. The company offers sportswear, clothes, and accessories. It has over 1,561 retail stores, out of which 769 stores are located in the UK, which is a significant market for the company, and nearly half of the revenue comes from the UK market.
The company’s board will undergo a major change next year when its founder, Mike Ashley, will move away from the chief executive role. Michael Murray is set to become the new chief executive officer of the company.
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The company’s stock has given good returns to its shareholders. In the last one year, the stock price has been up by over 70.8%, and it currently has a market cap of £3,681.1 million as of 13 December 2021. The stock price is currently trading near its 52-week high of GBX 759.50.
