GraceKennedy Limited (GK) and JMMB Group Limited (JMMBGL) have received the necessary regulatory approval from the Trinidad and Tobago Securities and Exchange Commission (TTSEC) to begin their share buy-back programmes.
The disclosures were released over the last week by both companies which are listed on the Jamaica Stock Exchange (JSE) and Trinidad and Tobago Stock Exchange (TTSE). As reporting issuers in Trinidad & Tobago, both companies had to seek exemptions to execute their buy-back programmes based on the Trinidadian Securities Act. A share buy-back involves the company repurchasing its shares on the open market and cancelling them afterwards. This results in fewer shares in issue which improves the earnings per share and allows for the per share amount of a dividend to grow even if the nominal amount remains unchanged.
"We are confident in these long-term strategic objectives and believe that investing in our own company is the best use of capital and a good investment for long-term returns. The share buy-back will support us in achieving our 2030 vision, as it provides an opportunity to enhance shareholder value by helping to raise earnings per share," said GK Group Chief Executive Officer Donald Wehby in a press release.
GK's last share buy-back programme was done between October 2013 to December 2014 where 4.12 million ordinary shares were repurchased at a cost of $245.46 million. This was relative to the 8,382,965 ordinary shares or 2.5 per cent of GK's issued shares which was the maximum number of shares that could have been repurchased.
Wehby confirmed via e-mail that most of the trades for the 2014 buy-back took place on the JSE, but that it was executed on both stock exchanges.
Under GK's new share buy-back programme, the company will be repurchasing up to one per cent of the company's issued shares over a one-year period between the JSE and TTSE. With GK's issued share capital at 995,177,300 ordinary shares, this translates to 9.95 million shares that can be repurchased under the programme.
GK's JSE stock price is down 14 per cent year to date (YTD) to $71.56 which gives it a market capitalisation of $71.21 billion. This would mean an estimated $712.15 million could be repurchased based on the JSE price. GK's TTSE stock price is down 27 per cent YTD to TT$3.30 ($75.25) for a market cap of TT$3.28 billion. GK's book value is currently $76.78 while its trailing 12-month earnings per share is $7.61 which gives it a price to earnings ratio of 9.40 times.
JMMB Group had announced in December 2021 its intention to start its share buy-back programme by April 2022. However, that plan was delayed for over a year as JMMBGL had to await the exemption request from the TTSEC. JMMBGL had originally announced that its buy-back would be to repurchase $300 million worth of shares over a one-year period. However, the revised notice to the stock exchanges noted that the company would now be seeking to repurchase 10 million shares to be funded from cash resources.
"The rational for the buy-back programme is to unlock value for the company's shareholders by purchasing shares at a price below or equal to the company's intrinsic value," the JMMBGL release stated.
JMMBGL's JSE stock price is down 17 per cent YTD to $27.52 which gives it a market capitalization of $53.82 billion. However, the stock went up 4.39 per cent on September 8 when it was announced with 175,016 shares trading worth $4.95 million. The buy-back would see JMMBG repurchase an estimated $275.20 million worth of shares.
JMMBGL's TTSE price is down 29 per cent to TT$1.35 ($30.78) which gives it a market capitalisation of TT$2.64 billion. JMMBGL's book value is $27.77 while its trailing 12-month earnings per share of $5.57 which gives it a price to earnings ratio of 4.94 times.
On the JSE, Sygnus Credit Investments Limited is the latest company to execute a share buy-back where it repurchased 2.61 million worth US$246,000 in June. Eppley Caribbean Property Fund Limited SCC – Value Fund has repurchased 2.10 million out of 3.80 million shares under its programme. Kingston Properties Limited has not repurchased any shares in 2023.