eBusiness Weekly
Taurai Mangudhla
Zimbabwe Stock Exchange (ZSE) listed crocodile skins and meat producer Padenga Holdings, has shelved a decision to buy back its own shares on account of a firming share price.
The share buyback was meant to increase shareholder value by reducing the number of shares in circulation and in turn increase earnings per share and ultimately increase the share price, Padenga financial director Oliver Kamundimu said.
“The company has not yet bought back any shares,” Kamundimu said in emailed responses.
“The Padenga share price has increased phenomenally from 21 cents at the time of the AGM to the current 81 cents.
The objectives of the share buy-back have been realised before the company bought any shares. If there is a “correction” of prices on the market, the company will implement the share buy-back strategy to increase shareholder value,” added Kamundimu.
In terms of the conditions, the authority will expire at the company’s next AGM and acquisitions will be of ordinary shares which, in aggregate in any one financial year, will not exceed 10 percent of the company’s issued ordinary share capital as at the date of the resolution.
The terms also state the maximum and minimum prices respectively at which such ordinary shares may be acquired will not be more than 5 percent below the weighted average of the market price at which such ordinary shares are traded on the ZSE, as determined over the five business days immediately preceding the date of purchase of such ordinary shares by the Company.
“A press announcement will be published as soon as the Company has acquired ordinary shares constituting on the cumulative basis in the period between annual general meetings, 3 percent of the number of ordinary shares by the company; and if doing the subsistence of this resolution the company is unable to declare and pay a cash dividend, then this resolution shall be of no force and effect,” reads part of the AGM’s minutes.
The company in 2016 recorded an operating profit before depreciation, amortisation, impairment and fair valuation adjustments of $12 615 760 from $9 985 704 from turnover of $31 272 712 in the 12 months to December 2016.
The company had recorded turnover of $27 491 537 for the prior period to December 2015.
“The group benefited from the RBZ’s export incentive programme amounting to $1 393 460. Profit before tax increased by 11 percent over prior year to $11 040 379 ($9 950 208 — FY15),” reads part of the annual report.
