MARKET REPORT: Frasers Group 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 £80million 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 0.8 per cent, or 0.8p, to 106.8p), Boohoo (down 0.6 per cent, or 0.22p, to 33.98p) and N Brown (down 1.6 per cent, or 0.23p, to 13.98p) but it looks like its own shares offer better investment value.

Buyback: Rather than acquire more stakes in other struggling retailers, House of Fraser and Sports Direct owner Frasers Group plans to repurchase another £80m of its own shares.

Frasers’ share price – which has dropped by over 10 per cent since the start of 2024 – rose 3.1 per cent, or 24.5p, to 820.5p.

The FTSE 100 index extended its record-breaking run, rising 0.1 per cent, 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 1.3 per cent, or 260.63 points, at 20084.79.

Insurer Prudential was another FTSE 100 gainer, ahead 2.4 per cent, to 17.6p to 741.4p, boosted by a read-across from strong results by fellow Asia-Pacific insurer AIA Group in Hong Kong. 

Lloyds of London insurer Beazley also gained, up 3.1 per cent, or 19.5p to 657.5p, after reporting a 7 per cent rise in written premiums in its first quarter.

Stock Watch – Zenova Group 

Zenova Group got a boost from news it is to supply 200,000 litres of its fire protection paint to Drips & Sparks.

The two-year contract is worth £2.4million.

Drips & Sparks, which specialises in electrical fittings and services, will use Zenova’s coating product at the UK projects sites of Gracewood Construction. Shares surged 21.2 per cent, or 0.4p, to 2.3p.

Zenova floated on AIM in July 2021 at 19p a share and has been on a downwards slide.

Drugs giant AstraZeneca, up 0.3 per cent, 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 50 per cent. 

Its Enhertu drug has shown significant progression-free survival improvement in metastatic breast cancer in a trial.

Equipment hire firm Ashtead fell 2.1 per cent, or 130p, to 5974p as it forecast its rental revenue growth for this financial year to be at the low end of its 11 per cent to 13 per cent guidance range at a capital markets day presentation.

NatWest shed 1.6 per cent, 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 0.3 per cent, or 0.7p, to 203.65p) and Lloyds (down 0.8 per cent, or 0.42p, to 51.88p) – that reported last week.

High Street retailer JD Sports shed 3 per cent, 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 34.1 per cent, 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 £465million at the end of December.

This post first appeared on Dailymail.co.uk