09/01/2019 - 15:26

Finbar plans share buy-back

09/01/2019 - 15:26

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Finbar Group has announced an on-market share buy-back program under which the company could spend about $16 million repurchasing 7 per cent of its own shares.

Finbar plans share buy-back
Darren Pateman is the managing director of Finbar.

Finbar Group has announced an on-market share buy-back program under which the company could spend about $16 million repurchasing 7 per cent of its own shares.

The apartment developer will buy back a maximum of 20 million shares over the next 12 months, out of a total of 273 million shares on issue.

The buy-back will be through local broking firm Euroz Securities.

News of the buy-back added a kick to the company’s share price, which jumped 8.5 cents to close at 83.5 cents today.

The stock has been drifting lower for most of the year, after trading above $1.05 early in 2018.

Finbar said the number, pricing, and timing of shares purchased would depend on the share price and market conditions.

At today’s closing price, a buy-back of 20 million shares would cost $16.7 million.

Managing director Darren Pateman said a buy-back was the best way to use the company’s funds.

“The company is trading in a more favourable environment than it has been for the past five years,” he said.

“We have no debt on completed stock and are expecting a strong flow of settlements in the coming months through the recent completion of Reva and expected completion of Vue Tower.

“As such, we consider the purchase and subsequent cancellation of our own shares to be a prudent investment, particularly in light of recent share trading conditions.

“A share buy-back program in the current environment makes good use of company funds and is an effective method of capital management used to benefit all shareholders.

“This is particularly true given shares are trading below the company’s net tangible asset backing per share and at a significant discount to the intrinsic value of the business.”

The company said the buy-back program did not require shareholder approval, as it would be within the ‘10/12 limit’ permitted by the Corporations Act.

The on-market share buy-back scheme will not impact Finbar’s ongoing capital requirements for existing projects, nor will it affect the company’s capacity to continue to identify and secure new development opportunities as they arise.

 

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