FBD's biggest shareholder, Farmer Business Developments, yesterday won permission to increase its stake in the company in the event of more share buybacks.
The Farmer Business Developments holding company will now be able to increase its position in FBD beyond the 34.5 per cent it currently holds.
Farmer Business Developments comprises the 5,000 or so individual owners of FBD when the insurance company took its stock market listing in 1989.
FBD has spent about €81 million on share buybacks since the start of this year and analysts think the firm has ample capacity to buy back more stock over the coming months. FBD has indicated that it is looking at ways of enhancing shareholder value.
David Odlum at NCB estimated that that FBD could have as much as €100 million available for buybacks by the end of this year. He noted yesterday that if the firm made no distributions, this available cash could rise to €175 million by the end of 2006.
"Overall, significant scope exists for management to return capital to shareholders over the next few years," he noted.
He reiterated his "buy" recommendation on the stock, which last night closed 60 cent stronger at €29.50.
In a note issued by Goodbody Stockbrokers yesterday, analyst Anna Lalor placed a price target of €32.25 on the stock.
:quality(70)/s3.amazonaws.com/arc-authors/irishtimes/62c8cb15-e9e2-4ad0-a3e0-0181bd96320a.png)
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)