Frasers chief executive Mike Ashley is reportedly preparing to take the company private following a period of strong growth for the group’s brands.
Speculation is mounting that Frasers’ performance during the pandemic could prompt Ashley to take his retail empire private again, according to The Daily Telegraph.
The move would leave Michael Murray, who will succeed Ashley as chief executive next May, in a position to make changes without having to consult investors.
Frasers reported a 75.3% surge in pre-tax profit to £186m during the six months to October 24. The retailer expects earnings for the full year to be in line with expectations at between £300m and £350m. If Frasers achieves the upper end of this range, it would mark the group’s highest annual profit since Ashley founded the business.
The last time Frasers achieved profits within that range was back in 2015 when it recorded an underlying profit of £300m.
Frasers has already embarked on a share buyback programme worth millions of pounds in recent months. The retailer has pledged to spend a further £70m purchasing up to 10m of its own shares by April 2022.
Ashley holds a 68% stake in the company but a move to take it private again would be expensive. Frasers’ share price has increased by more than two-thirds in 2021 and now sits at just over 700p. The price slumped to 185p at the height of the pandemic last year.
Frasers’ shares fell 4% in early trading this morning, following the reports.
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