Frasers Group shares rise as retail group behind Sports Direct kicks off fresh £35m share buyback scheme
- The buyback scheme is the first under new chief executive Michael Murray
- Frasers has already handed back over £350m to investors since May last year
Frasers Group shares rose today as the business kicked off a fresh £35million share buyback.
The scheme is the first under new boss Michael Murray, who took over from Mike Ashely last month as chief executive after the tycoon stepped down.
The group, which owns brands including Sports Direct, Evan Cycles and House of Fraser, has already handed back over £350million to investors since May last year.
Share buyback: Frasers said the programme will last until its next trading update on 21 July
In a short trading update, Frasers said the programme will last until its next trading update, which is scheduled for 21 July.
The previous share buyback of £70million was launched in April.
The aim, as in the previous schemes, is to ‘reduce the share capital of the company’, Frasers said.
Frasers Group shares rose 3.5 per cent to 627p in afternoon trading on Monday.
Despite the raft of buybacks, the stock has fallen 20 per cent since the start of the year, although it is 8 per cent higher than a year ago.
Businesses usually buy shares and hold them in reserve to reduce the number available to the public.
This tends to push up the value of the stock but it is also a way for firms to return cash to investors other instead of paying dividends.
Sceptics say it can amount to manipulating the stock price.
Share buybacks have been popular over the past year – Pets at Home also kicked off one today for £50million worth of shares.
The pet retailer said it will end on or before 30 September this year.
Ashley handed over the control of Frasers last month to Murray, who is engaged to Ashley’s daughter Anna.
The group said today that July’s trading update will exclude digital retailer Studio Retail, which the company bought out of administration in February of this year.