Buy-back bonanza for three firms' investors

IT WAS a bumper day for shareholders yesterday as three companies announced substantial share buy-backs. WH Smith led the way with plans for a pounds 250m capital return following the completion of the pounds 300m sale of Waterstone's to HMV Media. Burmah Castrol, the lubricants group, also showered its shareholders with pounds 250m. Separately Ascot, the engineering mini conglomerate, announced a pounds 50m share buy-back.

Shareholders in WH Smith will receive 53.75p per share, representing a return of 10 per cent of the company's market value, or pounds 150m. The buy- back will be effected via the issue and buy-back of B shares. At the same time where will be a consolidation of the company's share capital on the basis of nine new ordinary shares for every 10 currently held. The remainder of the capital return will be conducted though market purchase of around pounds 100m.

The size of Smith's cash return was in line with analysts' expectations and the City drew additional comfort from the company's comments that it would consider further buy-backs. These will depend on the outcome of negotiations with Virgin over the sale of Smith's 75 per cent stake in the Virgin-Our Price music group.

"We will sell to Virgin if they are prepared to pay us a sensible price for the business," said Richard Handover, Smith's chief executive. "But we're in no great rush to do it." Smith's has an option to buy the remainder of the business next year.

He said there were no plans for further corporate activity. "We're just in the process of buying John Menzies and we have a lot of work to do on the existing business." Smiths shares edged up 5p to 542.5p.

Burmah Castrol plans to return not less than pounds 250m of capital to shareholders although these plans are not expected to be executed until after April 1999. The company intends to seek shareholder approval at this year's annual general meeting to buy back up to 10 per cent of its share capital. Management will renew this power annually.

But the company is likely to wait until ACT is abolished in the spring of next year before moving ahead as this would be more tax efficient and "serve shareholders' best interests".

Tim Stevenson, the new chief executive, said the eventual figure could be higher than pounds 250m. It is part of a strategy of balance sheet management under which the company will also redeem its small number of preference shares.

Burmah shares soared 69p to 1170p on the buyback plans plus better than expected pre-tax profits which were 7 per cent ahead at pounds 279m.

Shares in Ascot Holdings, the engineering group run by Hamley's chairman Howard Dyer, climbed on news that the company is returning pounds 50m to shareholders, worth around 61p per share. Ascot is seeking shareholder approval for the re-purchase of up to 10 per cent of its stock.

Mr Dyer said that trading results in the first two months of the year were ahead of 1997's and that substantial funds were being committed to organic growth. The shares rose 31.5p to 296.5p. Profits last year rose from pounds 6m to pounds 30m.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there