Ahold to buy back US$1 billion of shares

Dutch retailer Ahold has unveiled a US$1 billion (£598.5 million) share buy-back programme following the sale of its US Foodservice and Polish businesses.

The scheme will raise the total being returned to shareholders to US$4 billion (£1.99 billion) as the retailer gets back on track following the high-profile accounting scandal in 2002 that threw it into turmoil.

The store group, which has chains in the US , the Netherlands and central Europe , posted a 2per cent rise in second quarter sales to €6.6 billion (£2.71 billion). Operating income was down €11 million (£7.5 million) to €291 million (£197.3 million) because of an adverse currency exchange impact.

For the first half, net sales rose 1.6 per cent to €15.2 billion (£10.3 billion) and operating income was down €24 million (£16.3 million) to €626 million (£424.5 million). The sale of US Foodservice and the Polish operation meant net income was up €2 billion (£1.45 billion) to €2.5 billion (£1.69 billion).

Acting president and chief executive John Rishton said: “The results show we are continuing to make progress with our strategy for profitable growth.”

He highlighted the roll-out at US chains Stop & Shop and Giant-Landover of Ahold’s “value improvement programme” as a particularly important development. The associated investment in prices hit margins but is improving customer perceptions.

Ahold also said it will delist from the New York Stock Exchange to reduce business complexity and improve cost effectiveness.