Frasers in fashion as it unveils £80m buyback
Has Mike ashley’s Frasers Group run out of things to buy for now?
Rather than acquire more stakes in other struggling retailers, the House of Fraser and sports Direct owner plans to repurchase another £80m of its own shares.
a similarly-sized share buyback, launched in February this year, ended on april 28.
The repurchases reduce the share capital of the firm thereby boosting the stock price. The company undertook several buybacks throughout last year.
Frasers has spent much of the first few months of this year raising its stakes in businesses such as AO World (up 0.8pc, or 0.8p, to 106.8p), Boohoo (down 0.6pc, or 0.22p, to 33.98p) and N Brown (down 1.6pc, or 0.23p, to 13.98p) but it looks like its own shares offer better investment value.
Frasers’ share price – which has dropped by over 10pc since the start of 2024 – rose 3.1pc, or 24.5p, to 820.5p.
The FTSE 100 index extended its record-breaking run, rising 0.1pc, or 7.2 points, to 8147.03, having hit an all-time peak of 8189.14 in early trading.
The FTSE 250 index was similarly buoyant, up 1.3pc, or 260.63 points, at 20084.79.
Insurer Prudential was another FTsE 100 gainer, ahead 2.4pc, to 17.6p to 741.4p, boosted by a readacross from strong results by fellow asia- Pacific insurer aIa Group in Hong Kong. Lloyds of London insurer Beazley also gained, up 3.1pc, or 19.5p to 657.5p, after reporting a 7pc rise in written premiums in its first quarter.
Drugs giant AstraZeneca, up 0.3pc, or 36p, to 12024p, was lifted by two updates on breast cancer treatments. a combination of its Truqap and Faslodex drugs has been recommended in the EU for advanced ER-positive breast cancer, reducing disease progression risk by 50pc. Its Enhertu drug has shown significant progressionfree survival improvement in metastatic breast cancer in a trial.
Equipment hire firm Ashtead fell 2.1pc, or 130p, to 5974p as it forecast its rental revenue growth for this financial year to be at the low end of its 11pc to 13pc guidance range at a capital markets day presentation.
NatWest shed 1.6pc, or 4.9p to 302.5p, as analysts at broker KBW said the lender is their least favourite of the three UK banking giants – which included Barclays (down 0.3pc, or 0.7p, to 203.65p) and Lloyds ( down 0.8pc, or 0.42p, to 51.88p) – that reported last week.
High street retailer JD Sports shed 3pc, or 3.55p, to 116.6p after analysts at Barclays downgraded its rating to equal-weight from overweight, with the target price cut to 140p from 165p.
Petrofac plunged 34.1pc, or 7.6p, to 14.7p after announcing that its shares are likely to be suspended from tomorrow as it missed this week’s deadline for publishing full-year results. These are not expected until the end of May.
The delay comes as discussions are ongoing with lenders over a debt restructuring, with bond repayments due on May 15 not expected to be met. The oil engineer’s net debt stood at around £465m at the end of December.