Irish plcs spend almost €2bn buying back their own shares in 2019

Irish publicly listed companies have spent almost €2 billion buying back their own shares this year, taking part in a global boom in companies repurchasing their own stock that has helped move markets higher.

CRH led the way among Irish companies; it is, according to its most recent trading update, on track to spend about €900 million buying back its own shares this year. The building-materials giant moved in 2018 to launch its first such programme in a decade in the belief, according to chief executive Albert Manifold and the wider board, that that stock was trading at a discount to its intrinsic value.

The Dublin-based, London-listed convenience-food company Greencore saw shareholders take up its full £509 million (€593 million) offer in January to buy back stock, using proceeds from the sale of its US business to its American rival Hearthside Foods. The sandwich group, led by chief executive Patrick Coveney, initiated the buyback after being forced to abandon a special-dividend plan following criticism from some shareholders about the tax implications of such a move.

An estimated €900bn is set to be spent on stock repurchases by the top 500 listed Wall Street companies this year, helping extend the biggest US bull market on record

Ryanair spent €320 million buying back its own stock this year, according to a company spokesman. That brings to well over €6.5 billion the amount the airline has returned to shareholders through such programmes and other special distributions since 2008.

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The gambling giant Flutter Entertainment, the cidermaker C&C and the commercial-property trust Hibernia Reit, as well as the housebuilders Cairn Homes and Abbey, have also repurchased their own shares in 2019, according to stock-exchange filings.

The programmes have supported a 31 per cent surge in the Iseq index in Dublin as stock trading for 2019 draws to a close, helping it to recover from a slump last year.

A wider 24 per cent surge in the MSCI All Country World Index, a benchmark for global equities, this year has also been underpinned by record stock buybacks by US companies, partly funded by ultracheap debt in capital markets and a continued benefit from President Trump’s corporate-tax cuts in late 2017.

An estimated $1 trillion (€900 billion) is set to be spent on stock repurchases by the top 500 listed companies on Wall Street this year, helping extend the biggest US bull market on record, even as the practice has attracted the ire of the Democratic presidential candidates Elizabeth Warren and Bernie Sanders.

They have argued that buybacks are taking place at the expense of companies investing in, and growing, their businesses. Critics also argue that buybacks drive wealth inequality, as they benefit shareholders and executives but not workers.