Maple Leaf Cement Factory Ltd (PSX: MLCF) is going to buy back 100 million of its own shares between October 27, 2023, to April 15, 2024, at the price prevailing on the stock exchange, the company informed the Pakistan Stock Exchange on Thursday.

According to the stock filing, the initiative is set to commence on October 27, 2023, and conclude by April 15, 2024.

The acquisition will be funded with the company’s distributable profits, underlining the robustness of its financial standing. The reduced capital would consolidate equity which will improve earnings per share, future dividends, and break-up value of the company’s share subsequent to the purchase of shares. It will also provide an opportunity for exit to those members who wish to liquidate their investments at a reasonable price.

“The purchase will have positive effect on the financial position of the Company as it will improve EPS, future dividends and break-up value of the Company’s share”, the filing added.

MLCF last year showed a strategic approach to maximizing shareholder value by successfully completing a 25 million share buyback at Rs. 26.77 per share. With a current market capitalization of Rs. 30.99 billion, MLCF’s latest decision to buy back 100 million shares at the current market price of Rs. 2.9 billion demonstrates a strong trust in the company’s fundamental value.

MLCF finds it particularly compelling to repurchase its own shares, given they are currently valued far below the replacement value of the firm.

Source: Pro Pakistani