Market report: Burberry kicks off £150m share buyback programme

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It didn’t take long for Burberry to move to put things in order as the luxury fashion brand kicked off a £100 million share buyback, just a week after laying bare the turnaround challenge facing its new boss.

Today’s buyback, which will end by April 18 next year, is the initial phase of a programme worth £150 million which is being run by Morgan Stanley.

Last week, the FTSE 100 company, which has been battling falling demand from China and other big-spending markets, said that Christopher Bailey would step down as chief executive next year to be replaced by Céline’s Marco Gobbetti.

Two days later, Burberry said that now the long-awaited management shake-up had been confirmed it would look to buy back up to £150 million in shares.

The news accompanied confirmation of Burberry’s woes as it revealed falling same-store sales in all its markets in a first-quarter update, forcing the business to slash wholesale revenue forecasts.

Its shares, which have rallied on the weak pound after the Brexit vote, were up 5p at 1286p.

It was a steady day for the FTSE 100, which advanced 39.14 points to 6736.51 ahead of the start of a busy reporting period next week as traders suggested it was “the calm before the storm”.

Mining shares were again downtrodden after Anglo American missed production forecasts in the second quarter, causing it to tumble 43.35p, or 5.3%, to 770.25p.

Signs of weaker demand also knocked Glencore, still the second best blue-chip performer of 2016 behind Anglo, down 5.7p to 174.2p.

A 6% sales rise to £822 million in the first quarter revved Johnson Matthey shares up 51p to 3198p thanks to strong sales of its catalytic converters.

Regulatory filings reveal Maverick Capital slashed its short position in ARM Holdings to just 0.06% on Monday when the chip designer announced a £24.3 billion takeover by Japan’s SoftBank.

The US hedge fund emerged as one of the big losers from the deal, whose 1.2% bet against ARM was worth almost £300 million before the deal. Arm shares slipped 2p to 1661p.

Oxford Pharmascience, an AIM-listed drugs firm 33%-owned by Neil Woodford, dived 1.23p, or 26%, to 3.4p as it warned a licensing deal would take longer than expected.

Small-cap punters were chatting about Vale, a new fintech shell that will float on the main board, run by Hong Kong businessman Patrick Tsang.

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July 20, 2016 |
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