Metropolitan enhances stakeholder value through share buy-backs
etropolitan enhances stakeholder value through share buy-backs Metropolitan today (4 June 2007) announced that it has recently bought back some R280 million
worth of its ordinary shares in the open market, thereby enhancing its earnings and embedded value per share by 1.4% and 0.1% respectively.
The repurchases, which were effected using available cash resources, took place between 12 April and 31 May 2007 at prices ranging between 1517 and 1676 cents per ordinary share. In total, 17.3 million shares have been bought back, representing 2.9% of the groups issued ordinary share capital as at 30 May 2006.
"These repurchases are part of our ongoing capital management process," says group chief executive Peter Doyle. "We are constantly exploring ways to enhance capital efficiencies within the group in line with our commitment to maximising shareholder return on equity.
"A share buy-back at a price below embedded value (our EV was disclosed at R17.02 per share at 31 December 2006) is an immediate embedded value enhancer."
Over the past year (ie since June 2006) Metropolitan has bought back shares totalling R663 million in value while shareholders have also received cash dividends in excess of R961 million.
The fact that capital totalling more than R1.6 billion has been paid out in the past 12 months underlines the strength of the group's recent operational performance. There has been a steady flow of good news from the group over the period, including the first quarters trading update for 2007, released on 31 May.
Doyle stresses that the optimum allocation and utilisation of capital to create value for stakeholders, and shareholders in particular, remains a top priority for the group.
"Shareholders renewed our buy-back authority at the annual general meeting on 31 May, and we will utilise the remaining R220 million set aside for further share repurchases as an effective and efficient way of adding value for stakeholders.
"We will, however, continue to explore the full range of capital management options available to us as we have been doing for the past five years."
