Shareholders in blood plasma product and vaccine maker CSL will have the joys of having to decide whether to take part in yet another share buyback – the seventh in eight years.
The company’s annual meeting in Melbourne yesterday was told the new buyback would be $950 million.
CSL is 95% of the way through a $900 million buyback that it announced in October of last year.
The latest buyback was hinted at when the company revealed its 2013-14 profit in August, with the company saying then a decision would be announced at the AGM.
News of the latest buyback though failed to set the shares on fire on the ASX yesterday and they ended up 1.3% at $73.50.
CSL chairman John Shine told the company’s annual general meeting that the buyback program had delivered benefits to shareholders.
“Buybacks remain an effective way to manage our capital that delivers improved investment returns for shareholders,” Professor Shine told the meeting.
“Through these buybacks, all our shareholders benefit from improved investment return ratios, including earnings per share and return on equity.
“To date, as a result of this and previous buybacks, CSL has repurchased approximately 23 per cent of the company’s shares on issue,” he said.
The $950 million buyback will be CSL’s seventh in eight years. The company intends to complete it over the next 12 months.
CSL 1Y – CSL rolls out $950m buyback
Professor Shine said that previous six buybacks have amounted to about $3.3 billion and have boosted earnings per share by more than 15%.
He said 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.
Professor Shine repeated guidance provided in August, that CSL’s net profit after tax would grow by about 12% in constant currency terms. “While the markets in which we operate remain highly competitive, our broad portfolio of products, ongoing product development and geographic reach continue to ensure our business remains well positioned,” he said.
CSL last week said it would spend more than $200 million expanding its Melbourne albumin plant.
CSL chief executive Paul Perreault said the $210 million expansion of the Melbourne plant will ensure the local manufacturing operation remains globally competitive.
The move will create 390 jobs and almost double the output of an in-demand blood plasma product. CSAL spent the best part of a quarter of a billion dollars on the first stage of the operation several years ago.
At peak production the investment will lead to annual albumin exports worth $US600 million ($A684 million).
In the 2013-14 financial year, CSL’s albumin sales amounted to $US694 million and accounted for 13% of the year’s annual sales of $US5.3 billion.
