Earnings per share Definition

GLOSSARY

What does Earnings per share mean?

A common way of expressing company profits – dividing the profits after tax by the number of shares in issue. Earnings per share is the basis for the calculation of the P/E ratio.

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The strategic report

The strategic report STOP PRESS: A significant restructuring of the UK listing regime came into effect on 29 July 2024 which included the removal of the premium and standard listing segments and the creation of a single listing category for equity shares in commercial companies. The commercial companies category is heavily disclosure-based and sits alongside other listing categories such as the shell companies, secondary listing and closed ended investment fund categories. A new UK Listing Rules sourcebook came into force to implement the changes and the previous Listing Rules sourcebook was revoked. For further information, see Practice Note: Reform of the UK listing regime—fundamentals. This Practice Note reflects the listing regime as it was prior to 29 July 2024. All companies (other than small companies) must prepare a strategic report for each financial year. In June 2022 the Financial Reporting Council (FRC) updated its Guidance on the Strategic Report (FRC Guidance) (see FRC Guidance on the Strategic Report below). Government withdraws draft corporate reporting regulations In October...

Public company share buybacks—procedure for approving a share buyback

Public company share buybacks—procedure for approving a share buyback A limited company may buy back shares in itself, if certain conditions set out in the Companies Act 2006 (CA 2006) are met. This is known as a share buyback or a purchase of own shares. In addition to the provisions of CA 2006, there are other rules and guidelines that are relevant to a listed company or an AIM company. In particular, a listed company must have regard to the Listing Rules (LRs) and the Disclosure Guidance and Transparency Rules (DTRs). An AIM company must have regard to the AIM Rules for Companies (AIM Rules), but these do not specifically refer to share buybacks, so AIM Regulation has confirmed that compliance by an AIM company with the LRs in relation to share buybacks would represent best practice in most circumstances. An AIM company is also subject to DTR 5. In addition, both types of company may follow institutional investor guidance. For a summary of the regime...

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Scheme document—front end and skeleton framework

Scheme document—front end and skeleton framework This document is important and requires your immediate attention. It contains a proposal which, if implemented in full, will result in the cancellation of the listing of [Offeree] Shares on [insert name of relevant market, such as AIM or the Main Market of the London Stock Exchange]. If you are in any doubt about the Offer or the action you should take, you are recommended to seek your own personal independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser. If you sell, or have sold or otherwise transferred, all of your [Offeree] Shares, please send this document and any accompanying documents (but not any accompanying personalised documents) at once to the purchaser or transferee, or to the stockbroker, bank or other agent through whom...

Offer document—front end and skeleton framework

Offer document—front end and skeleton framework THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the Offer or the action you should take, you are recommended to seek your own personal independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser. If you sell, or have sold or otherwise transferred, all of your Shares (other than pursuant to the Offer), please send this document and any accompanying documents (but not any personalised Form of Acceptance) at once to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee. However, such documents should not be distributed, forwarded or transmitted in or into any jurisdiction where to do...

Dive into our 2 Precedents related to Earnings per share

Share Incentives weekly highlights—5 September 2024

This week's edition of Share Incentives weekly highlights includes: (1) a report by the Quoted Companies Alliance on proxy advisers, (2) an investor revolt on executive pay at Ashtead Group plc, and (3) a new Q&A which considers a company’s reporting obligations when it grants a share option to a non-employee.

Share Incentives weekly highlights—23 May 2024

This week's edition of Share Incentives weekly highlights includes: (1) the FCA’s Primary Market Bulletin 49, reporting on companies’ compliance with LTIP disclosure obligations and their use of metrics and performance targets and (2) launch of the DBT’s new consultation on proposals to simplify corporate reporting.

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GLOSSARY