The British pet retailer has completed the first phase of its £50 million target.
A few weeks ago, British pet retailer Pets at Home announced its plans to buy back shares worth £50 million ($63.6M/€58.1M), a process that consists of buying back the company’s own shares to reduce capital.
After the buyback has been completed, the company cancels those shares. As a result, the shareholders are left with a larger portion of the company.
Pets at Home announced this development after expecting to finish the year in a net cash position that aligns with the retailer’s capital allocation policy.
The firm’s buyback will be conducted using capital market company Numis Securities Limited to ensure any trading decisions are made without bias.
The process will be split into 2 tranches, the first of which started on June 26 for an amount equal to £25 million ($31.8M/€29M). Some sources indicate that the first phase was completed within a few hours.
The second phase will be managed by the banking group HSBC. This will start on July 6, 2023. During this period, the company is permitted to buy back a maximum of 50,000,000 shares
Pets at Home hit revenue of £1.4 billion ($1.7B/€1.6B) in the FY 2023, concluding on 30 March 2023.
What does this mean for the business?
Buyback programs are popular with companies that have excess cash that is not needed to run the business.
The main benefits of this operation are that the money that shareholders receive from their bought-back shares can be used as capital rather than income, which means lower tax rates.
In addition, shares generate more value after this buyback scheme.
The latest articles
More than 20% of Nestlé’s sales last year were pet products
The conglomerate’s pet category is the largest contributor to organic growth, while global sales decreased by 1.5%.
Better Choice to develop weight loss supplement for pets
The Florida-based pet health and wellness firm recently acquired all issued and outstanding shares in Canadian Aimia Pet Healthco for an undisclosed amount.
European pet food manufacturers establish new group
SANYpet, Natural Line and Codico have created a new production and distribution group to capture the international market.
Weekly newsletter to stay up-to-date
Discover what’s happening in the pet industry. Get the must-read stories and insights in your inbox.