Highlight:
- Post the buyback, total outstanding ordinary shares of the company stand at nearly 722 million.
- This buyback represents 2.9% of total issued capital, and the company spent around NZ$149 million on this programme, including brokerage costs.
- Including today's losses, A2M shares are down over 8% in a month. However, on a one-year basis, the stock has gained 14.2%.
Dairy products producer A2 Milk Company Ltd (ASX:A2M) on Monday, 20 March 2023, said it has its NZ$149 million on-market share buyback program, announced on 29 August 2022.
The buyback programme that started on 7 November 2022 ended with the acquisition of 21.68 million A2M shares at an average price of NZ$6.87 per share. This buyback represents 2.9% of total issued capital, and the company spent around NZ$149 million on this programme, including brokerage costs.
What happens to the shares bought back
The infant formula manufacturer said it has cancelled all the shares bought back from the market. Post the buyback, the total outstanding ordinary shares of the company stand at nearly 722 million.
As the number of shares has reduced following the buyback, the company's earnings per share (EPS) is likely to get a boost, which bodes well for the share price.
However, following this announcement, A2M shares fell. As of 11:10 am AEDT, A2M shares were down 3.453% at AU$6.150, underperforming the broader S&P/ASX 200 index, which was down 0.33% at 6,971.60.
Last month, the dairy company reported its earnings for the half-year ended 31 December 2022. Revenue of the company grew 18.6% annually to NZ$783.3 million. Except for Australia and NZ, it witnessed higher sales from all other operating regions. Sales from ANZ fell 24.6%, while China & other Asia sales rose 54%, USA sales increased 61.8%, and MVM sales jumped 18.4% on an annual basis.
For FY23, the milk producer expects low double-digit revenue growth while maintaining EBITDA margin.
A2 Milk share price performance
Including today's losses, A2M shares are down over 8% in a month. However, on a one-year basis, the stock has gained 14.2%. A2M shares are 14.29% away from their 52-week high of AU$7.140.
A2M one-year price chart
Source: Refinitiv