Shares in CSL closed up 1.3% yesterday at $66.26 as shareholders showed their appreciation of the company’s 7th share buyback which could total up to $950 million.
The new buyback was confirmed at yesterday’s AGM in Melbourne by Chairman Professor John Shine who said the Board was pleased to continue a buyback program that had clearly delivered benefits for shareholders.
“Buybacks remain an effective way to manage our capital that delivers improved investment returns for shareholders,” Professor Shine said.
The announced buyback will be CSL’s seventh in eight years. The Company has bought back around 22% of its shares since 2005.
Professor Shine said that previous six buybacks totaling some A$3.3 billion have contributed a boost to earnings per share in excess of 15%.
He told the meeting that earnings per share growth this financial year will again exceed profit growth expectations as shareholders benefit from the ongoing effect of past and current share buybacks.
CSL YTD – Unveils another buyback
At Tuesday’s closing price of $65.38, the $950 million buyback represents approximately 14.5 million shares or around 3% of CSL’s issued share capital.
But yesterday’s price rise will reduce the number of shares.
Brokers said the $950 million buyback was larger than they had expected from CSL.
The buyback will be conducted over the next 12 months.
Professor Shine told the meeting that CSL first quarter trading was in line with expectations but confirmed that the previously announced settlement in the US will cut growth in net profit to 7% this financial year from the forecast 10%.
The settlement, announced earlier this month, has yet to be approved by the US courts. It will result in a one-off charge of $US39 million.
