Frasers Group to spend £60m on share buybacks

Mike Ashley’s Frasers Group has announced it will begin a new share buyback programme worth £60 million, which will run between now and July.

The move comes less than a month after the company, which owns Sports Direct, House of Fraser, Evans Cycles, and Jack Wills, forecast a £200 million loss triggered by the pandemic.

The prediction was double the amount the group had forecasted in February.

In December, the retailer warned that it could no longer commit to achieving 20 to 30 per cent profit, following the announcement of a full lockdown.

The company said the aggregate purchase price of all shares bought under the programme will be no greater than £60 million and that the maximum number of shares that may be purchased under the would be £10 million ordinary shares.
The retailer said that the purpose of the programme is to “reduce the share capital of the company.”

Frasers Group in talks with EU over VAT

The launch of the shares spending spree comes as The Guardian reveals that the group has been in talks with EU tax authorities about missing VAT payments.

According to the report, documents filed at the high court demonstrate that the group came under scrutiny in France, Ireland, and Finland over an arrangement that means it paid VAT in the UK on its overseas sales across seven years.

The arrangement involved setting up an additional company, called Barlin Delivery, which reportedly had no trucks or drivers and was run by the billionaire’s brother, to deliver orders abroad.

The court documents suggest that European tax authorities are concerned that the plan meant it has missed out on VAT payments.

The company told the newspaper that Barlin had not been established to cut tax bills but did say it had settled with some foreign tax authorities and remained in discussion with others.

“It would be inappropriate for the group to comment further on the progress of settlement negotiations or to provide details of settlements which have been reached,” the company said in a statement. “As we have repeatedly stressed, the group is adopting a fully cooperative approach with HMRC and EU member states in order to ensure VAT was paid in the correct place.

“That process is not yet complete – progress has been slowed by the ongoing pandemic – but we hope and expect that it will be completed soon.”

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