Virgin Money UK FY23 Underlying Profit Declines; Announces Share Buyback

Virgin Money UK PLC (VMUK.L) reported fiscal 2023 statutory profit on ordinary activities before tax of 345 million pounds, down 42% from last year. Earnings per share was 13.9 pence compared to 32.3 pence. Underlying profit on ordinary activities before tax was 593 million pounds, down 24%. Underlying basic earnings per share was 27.4 pence compared to 41.8 pence.

Fiscal 2023 net interest income increased to 1.69 billion pounds from 1.58 billion pounds, prior year. Net interest income increased 8% relative to 2022, driven by an expansion of the Group’s NIM as it continued to benefit from higher rates, including from the reinvestment of the structural hedge.

Separately, Virgin Money UK announced a share buyback to repurchase up to 150 million pounds in aggregate between its ordinary shares listed on the London Stock Exchange and CHESS Depositary Interests, each representing one share, listed on the Australian Securities Exchange. The buyback is expected to commence on 23 November 2023, and will end no later than 16 May 2024.

The purpose of the buyback is to reduce the company’s issued share capital by returning surplus capital to shareholders. The company has entered into an arrangement with Goldman Sachs to purchase shares as riskless principal. The company has also entered into a discretionary arrangement with Goldman Sachs International and Goldman Sachs Australia Pty Ltd to purchase CDIs on the Australian Securities Exchange. The repurchased shares and CDIs will be cancelled.

The directors have recommended a final ordinary dividend in respect of the year ended 30 September 2023 of 2 pence per ordinary share.

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