GraceKennedy Limited will be buying back as much as one per cent of its shares over the span of one year, adding to the growing but still small list of stock market companies seeking to wring value from their shares.
The announced proportion amounts to about 9.9 million units, which at current price are valued at around $700 million.
GraceKennedy, which has more than 990 million outstanding shares, said it would conduct the buybacks on the open market through its stockbrokers in Jamaica as well as Trinidad & Tobago, where the food and financial services conglomerate is cross-listed.
The programme will be funded from its cash resources.
In a release, GraceKennedy CEO Don Wehby said GK was moving ahead with the buyback that was first announced more than six months ago because the GK shares were trading below their economic value.
At its current price of $72.02, the GK stock is trading below its book value of $81.40 per share.
By taking the shares off the market, it would serve to boost the group’s earnings per share, said Wehby, as GK continues to execute its long-term plan to generate over US$2 billion in revenue and US$250 million in profit annually by year 2030.
By then GK expects to be earning 70 per cent of both revenue and profit from outside of Jamaica.
Other companies that recently embarked on share buybacks include JMMB Group Limited, which will repurchase up to 10 million units. Those shares today are worth $275 million.
JMMB Group said in July that it will do the purchases via the open market at prices below or equal to the company’s intrinsic value utilising funding from its internal cash resources.
Sygnus Investments Limited announced in May that it would be spending US$9 million over three years to reacquire a portion of its shares listed on the JSE Main and the JSE US Dollar markets. The three years will roll off in June 2026.
Other companies that have been buying back shares include Epply Caribbean Property Value Fund, Kingston Properties, and First Rock Real Estate Investments, which has set a minimum repurchase target of 28.6 million units or 10 per cent of its issued shares that are listed on the JSE Main and JSE US Dollar markets.
GraceKennedy has said it will not be setting a fixed price for the share repurchases, but would execute the trades at going market rates.