Is the share buyback back in fashion?

The announcement this week of share buybacks by Balfour Beatty and Domino’s Pizza, as well as plans for such a scheme at Gamesys and intentions to ask for shareholders’ permission to buy back stock at IP Group, all suggest that this way of return capital to shareholders is back in fashion, says Russ Mould, AJ Bell Investment Director.

Shareholders must now decide whether this is a sign that corporate confidence is flooding back and the good times are about to roll once more, or whether boardrooms are letting down their guard too quickly in the wake of the pandemic.

Announced	Company	Buyback programme confirmed £ million
10-Mar-21	Somero Enterprises	1
10-Mar-21	IP Group	TBC
10-Mar-21	Balfour Beatty	150
09-Mar-21	Gamesys	TBC
09-Mar-21	Domino’s Pizza	45
04-Mar-21	CRH	216
04-Mar-21	Sage	300
26-Feb-21	Trans-Siberian Gold	1
26-Feb-21	Rightmove	TBC
25-Feb-21	Griffin Mining	7
25-Feb-21	Spectris	200
25-Feb-21	Standard Chartered	181
25-Feb-21	Berkeley Group	129
24-Feb-21	Glanbia	44
22-Feb-21	CML Microsystems	8
18-Feb-21	Barclays	700
18-Feb-21	South32	180
17-Feb-21	Plus500	18
01-Feb-21	Zytronic	10
11-Jan-21	Contour Global	TBC
	TOTAL	2,190

Source: Company accounts

“UK-listed firms have so far announced or confirmed buybacks with a value of more than £2 billion in 2021. This includes six FTSE 100 firms – Barclays, Berkeley, CRH, Rightmove, Sage and Standard Chartered.

“This is a huge turnaround from 2020 when buyback programmes with a value of more than £10 billion were scrapped and just £1.6 billion approved and carried out from March to December in 2020, after the pandemic had struck. During that time span fourteen members of the FE 100 shelved or put buyback schemes on ice (some of whom have started to act subsequently) – Ashtead, Berkeley, CRH, Diageo, Ferguson, HSBC, Next, Pearson, Rightmove, Royal Dutch Shell, RELX, Sage, Standard Chartered and WPP.