Retail baron Miek Ashley has announced the start of a £70m share buyback plan for Frasers in an attempt to boost the company’s share price.
Bosses at the group, which includes department store House of Fraser and retail chains Sports Direct and Game, said the plan is to reduce the number of shares in circulation.
The spending will start now and run until next April, and follows a similar spree this year in which the company spent £60m on shares.
Shares traded 0.55 per cent higher on the news.
Companies typically announce share buyback schemes in an attempt to boost the price as the number of shares in circulation decreases, making them more attractive and valuable.
Ashley, the company’s largest shareholder with a 68 per cent stake, is set to benefit most from the deal and has already seen shares rise from lows of 174.2p at the height of the first lockdown.
Shares ended last week at 732.5p, giving the retail tycoon a paper fortune worth £2.4bn.
On Friday the high street stalwart revealed surging half-year profits and forecast a jump in annual earnings despite revealing a hit from supply chain costs and pandemic uncertainty.
Pre-tax profits hit £186m for the six months to 24 October up from £106.1m a year earlier when trading was hit by lockdown store closures.
Underlying pre-tax profits lifted 61.7 per cent to £186.8m as sales raced 23.6 per cent higher to £2.3bn over the half-year.
Frasers said it booked a £135.3m impairment for the pandemic, with restrictions returning to parts of Europe, as well as to cover soaring shipping container and supply chain costs and inflation pressure on consumer spending.