Richard Pugh, deputy chairman, said the speculation, which has sent its shares soaring from 551p to 587p in the past week, was 'overdone - the board was quite surprised to read about it'. Yesterday the shares fell back 21p to 566p.
He added that buying back its own shares was 'always under review' but the low level of interest rates was 'obviously a factor' in its decision not to proceed at the moment. Falling interest rates have already reduced the income it earns on the pounds 1.4bn and it is likely to be reluctant to reduce that further by buying back its shares.
He added that the group remains keen to buy further mail order businesses in Europe, but opportunities are limited. The German market is dominated by two private companies, while Printemps has just acquired the French group La Redoubte.
It has been investing in its existing businesses - it spent pounds 50m on investment property, for example - but its cash balances still rose by pounds 46.3m in the year to March.
Lower rates meant income from them fell from pounds 117.2m to pounds 101.8m. That was more than offset by improvements in the performance of its trading divisions, and pre-tax profits rose 9.2 per cent to pounds 518.9m on sales 10 per cent up at pounds 3.1bn. Earnings per share were 34.3p (31.5p), and the dividend rises 18 per cent to 13p, via a 9p final.
The home shopping division, which includes the Kays and Marshall Ward catalogues as well as Great Universal Stores, increased profits by more than a fifth to pounds 194.2m as margins widened from 8.7 to 10 per cent.
Mr Pugh attributed that to a drop in bad debts, improvements in warehousing and distribution and the fact that staff who handle orders now deal with agents' accounts too, cutting the number of people required.
Burberry and Scotch House, which form the retail division, also performed well, increasing their contribution to operating profits from pounds 28.6m to pounds 41.1m.Reuse content