NZX-listed large format retail property investor Investore Property Ltd, owner of 40 Countdown & Bunnings premises, said last week it would begin a one-year onmarket share buyback programme for up to 5% (13 million) of its ordinary shares, starting today.
Investore chair Mike Allen said the board felt a buyback at current market prices was an efficient use of balance sheet capacity.
The shares traded on Friday at $1.54c, 10c below net asset backing.
Investore’s 19.9% shareholder, Stride Property Ltd, confirmed it didn’t intend to participate in the share buyback, and would rely on the Takeovers Code class exemptions notice allowing it to reduce its holding below 20% within 6 months of exceeding that threshold.
Mr Allen said Investore would co-ordinate the pausing of the buyback offer with Stride to enable Stride to begin any required selldown to comply with exemption notice requirements.
The shares were at $1.53 when the company made its announcement on Wednesday, and rose 1c on Friday. The shares had a price spike at $1.57 on 5 June and have risen 18c over the last 12 months.
Net asset backing at the March balance date was $1.64/share, up 9c in a year. Its price:earnings ratio is 8.73.
The company issued $100 million of bonds in April.
Investore had a 41.6% loan:value ratio (LVR) at the March balance date, and the board has set a maximum LVR of 48%.
The company, coming up for its third birthday in October, is also considering additional capital management initiatives “at an appropriate time”, which may include a second bond issue.
Attribution: Company release, NZX.