GK to implement share buyback plan
Published:Friday | March 3, 2023 | 12:57 AM
Large food and financial services group GraceKennedy Limited is joining the stock market companies that have implemented share buyback schemes, with the intent of driving up the value of their shares through curbs on the available supply.
The plan has already been approved by GraceKennedy’s board.
“We are confident in our long-term strategy and believe that investing in our own company is the best use of capital and a good investment for long-term returns,” said GK Group CEO Don Wehby.
“The proposed share buyback is being implemented because the company’s share price is considered to be below its true value and is an opportunity to enhance shareholder value by helping to raise earnings per share,” he said.
At its current price of $79, the GK stock is trading almost equal to its book value of $72 per share.
The plan for the share buyback was disclosed on Wednesday amid the release of mixed results for the group for year ending December 2022.
The company set a new record high for annual revenue, at $143 billion. That’s $13.6 billion, or 10.5 per cent, more than the previous year. But its bottom line shrank 15 per cent to $7.6 billion, of which $7 billion was earnings attributable to shareholders.
“GK’s team is working assiduously to effectively navigate the headwinds our business has been facing in recent months,” said Wehby.
“Rising inflation, an inconsistent supply chain, increasing interest rates and distribution costs, and geopolitical tensions and conflicts were compounded by the movement of currencies in our main operating markets in 2022, and these factors negatively impacted our business’ performance,” he said.
The company will host an earnings call to discuss its financial results on March 13.