Future shares soared after the magazine publisher announced a proposed share buyback of up to £45million, or 10 per cent of its existing share capital.
The group behind titles such as Country Life, Marie Claire and Four Four Two said on Monday it will ask shareholders to vote on the proposed buyback at a general meeting.
It told investors it had a ‘strong balance sheet’ and ‘a robust pipeline of attractive inorganic investment opportunities’.
Future, which is behind Marie Claire, boasted a ‘strong balance sheet’
‘However, the board believes that the share buyback programme will provide greater flexibility to achieve an optimal use of cash to deliver value for shareholders, whilst still maintaining a strong balance sheet,’ it added.
Future shares rose 7 per cent to 740p in morning trading on Monday.
But they have lost around 45 per cent of their value since the start of the year, with the stock suffering recently after Future warned of a decline in online audience numbers.
Lower online audiences in the UK and US have caused a slump in digital advertising revenue.
In May, the group said tough trading conditions were likely to continue, meaning results for the year to the end of September should be ‘towards the bottom end of current market expectations’.
That would suggest a profit of around £256million, short of the £271.7million it made last year.
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 instead of paying dividends. Sceptics say it can amount to manipulating the stock price.
Future shares have also suffered from September’s revelation that then-chief executive Zillah Byng-Thorne ‘informally indicated’ she wanted to step down by the end of 2023.
Byng-Thorne left in March and was replaced by Jon Steinberg, ex-president of Altice USA’s news and advertising division.
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