Shares in blood and plasma giant CSL hardly reacted to confirmation yesterday from the company that it will launch a $1 billion share buyback, just months after completing the previous buyback (of $950 million).
The company confirmed the buyback at its annual general meeting in Melbourne yesterday after flagging its intention back in August with the announcement of the full year results.
Chairman Professor John Shine said it will be CSL’s ninth share buyback in 10 years, and will be the largest ever undertaken by the company as part of its regular buyback program.
“Our ability to undertake another buyback of this scale is testament to CSL’s strong financial position and excellent cashflow. This has also enabled us to continue increase dividends to shareholders while continuing to invest in manufacturing expansions and innovation,” Professor Harris said.
CSL 1Y – More buybacks at CSL
In 2014-15, CSL increased dividends to shareholders by 10% in US dollars, which for its Australian shareholders converted to an increase of 39% over the prior year.
At the same time the company confirmed that 2015-16 was looking good with the chairman telling the meeting that earnings per share would exceed profit growth expectations as shareholders benefitted from the ongoing effect of past and current buybacks.
At Wednesday’s closing price of $89.25 for CSL shares, the latest buyback presents about 11.2 million shares, or around 2.4% of CSL’s shares. The shares dipped 0.3% to $88.91 on Thursday.
Excluding the impact of its acquisition of the Novartis flu business in July, the chairman said CSL still expects to lift its net profit by about 5% on a constant currency basis. Earnings per share growth is expected to exceed that level. Revenues are forecast to rise about 7% to increase around 7%.
“While the markets in which we operate remain highly competitive, our broad portfolio of innovative products, ongoing product development and growing demographic reach continue to ensure our business remains well positioned," Professor Shine said.
