CSL (ASX:CSL) today announced a new on-market share buyback of up to $1 billion at its Annual General Meeting in Melbourne - the largest ever undertaken by the company as part of its regular buyback program.
According to Chairman Professor John Shine, it is the company's ninth share buyback in 10 years.
“Buybacks continue to be a very efficient way of delivering positive value to all our shareholders," he said. "Those choosing to retain shares own a bigger portion of the company, which helps to boost their investment returns.”
The company has spent $5.16 billion purchasing 23 per cent of its shares in previous buybacks, contributing to a 23 per cent increase in earnings per share.
“Our ability to undertake another buyback of this scale is testament to CSL’s strong financial position and excellent cashflow. This has also enabled us to continue increase dividends to shareholders while continuing to invest in manufacturing expansions and innovation,” said Professor Shine.
He said earnings per share growth this financial year will again exceed profit growth expectations as shareholders benefit from the ongoing effect of past and current share buybacks.
At yesterday’s closing price of $89.25, the $1 billion buyback represents approximately 11.2 million CSL shares or around 2.4% of CSL’s issued share capital.
The company also confirmed its guidance for the 2016 financial year, with growth in net profit after tax of around 5 per cent expected and higher earnings per share growth expected. Revenue is expected to increase by approximately 7 per cent.