Green gets £460m from Arcadia

A JUBILANT Philip Green today stunned the City with news that his Arcadia group is to pay a £500m dividend this year, after repaying the entire £808m debt taken on to buy the business four years ahead of schedule.

Green and his family, who own 92% of the shares, will receive £460m of the money. The £40m balance will go to HBOS, the bank that backed him and owns the remaining shares.

'This is retail history,' said Green. 'We bought Arcadia just two years and five days ago. It's the quickest payback ever.

'Our 28,000 staff have done a brilliant job while I was slightly distracted by trying to buy a few more shops' - a reference to his abortive £9.1bn bid assault on struggling Marks & Spencer earlier this year.

Green is already one of the richest men in Britain, with a fortune estimated at £3.6bn. Only last week he took a £40m dividend cheque from Bhs, as the stores chain also announced record results.

He paid £850m for Arcadia and analysts estimate that the business is now worth more than £2.5bn.

The Arcadia dividend will be paid by the end of the year, although Green said he had 'no particular destination in mind' for it at the moment, adding: 'It will be Christmas as usual in the Green household.'

News of the rapid repayment of the debt accompanied record figures from the Top Shop to Burton, Dorothy Perkins and Miss Selfridge group, with operating profit up by 30% to £296.3m.

Total sales were up by 0.8% in the year to 28 August and down 0.8% on a like-for-like basis. There was a big increase in margins, up by four points to 17.9%, which Green says is the highest figure in European retailing. Sales have also improved in recent weeks, with like-for-like figures ahead by 3.1% and the overall figure by 6.7%. In addition, margins have continued to strengthen.

As with the Bhs announcement last week - the day after M&S's figures - today's Arcadia announcement looks to have been timed to cause maximum embarrassment to Stuart Rose, head of Arcadia when Green bought it but now chief executive of struggling Marks & Spencer.

Tomorrow, shareholders in M&S meet to approve the £2.3bn tender offer, launched as part of Rose's campaign to retain shareholder loyalty in the face of Green's assault earlier this year.

The price at which M&S will buy back the shares will be set early next week, but will be significantly below the 400p a share Green was prepared to pay three months ago.

Green will be free to renew his assault on M&S on 14 February, but would not be drawn on whether he would move. He said the performance of Arcadia, and Bhs, 'demonstrates that this is not a one-man band and it proves that we do not have to overpay or do anything'.