CIMIC, formerly the contractor Leighton, thinks its share price is so “attractive” it is buying back 10% of the company on market.
At Friday’s closing price of $22.14, the share buyback program will cost about $750 million over 12 months.
The company says the buyback will improve shareholder returns, enhance capital efficiency and maintain balance sheet flexibility to pursue growth and investment opportunities.
“The initiative is reflective of CIMIC’s strong balance sheet position, solid cash flow generation, and disciplined approach to capital management,” the company says. “It signals the company’s belief that the current share price is attractive.”
The buy‐back will be funded from existing cash balances and working capital facilities.
CIMIC has recently won a string of construction projects, including being selected =as the preferred contractor for Sydney’s $5 billion new M5 Motorway.
The company says it’s on track for 2015 profit of between $450 million and $520 million.