Is Mike Ashley preparing to take Frasers Group private?

Sports Direct, Oxford Street
Sports Direct revamped its Oxford Street store last year as part of its ongoing elevation strategy
// Mike Ashley may be considering taking Frasers Group off the stock market
// The Sports Direct owner is predicted to take advantage of its recent strong growth

Reports have been made that Mike Ashley may be considering taking Frasers Group off the stock market as he aims to take advantage of its recent period of strong growth. 

According to city insiders, the Sports Direct owner is preparing to take the retail group private, The Telegraph reported.

Strong trading over the last few months has prompted the rising speculation, which comes as Frasers – which also owns Evans Cycles and House of Fraser – has reported a 75% surge in pre-tax profit to £186m in its latest half-year results.

Largely driven by a strong reopening performance of stores post-lockdown and a continued growth in its online business, the retailer is on course to report its highest ever profit of between £300m and £350m this year.

Read more: Frasers Group launches £70m shares spending spree 

The last time it reported figures in this region was in 2015, when the group saw underlying profits of £300m.

An intensive share buyback scheme worth millions of pounds has gone some way towards prompting the speculation of delisting, as the retailer has pledged to spend a further £70m purchasing up to 10m of its own shares by April 2022. (Ashley currently holds a 68% stake in the retail giant.)

The move would also leave Michael Murray, who is in position to become chief executive next May, in a position to make changes without having to consult investors.

Frasers’ shares fell 4% in early trading this morning, following the reports.

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