Centum Investment Company Plc has provided an update on its share buyback program, revealing that it had successfully acquired 4.8 million shares.
This buyback initiative, which commenced on February 6, has accounted for 45 percent of the company’s traded shares since its inception.
In the first two months alone, Centum had already procured shares worth Sh37 million.
As part of its strategic financial move, Centum aims to repurchase up to 66.54 million of its shares, with a maximum price set at Sh9.03 and a minimum of Sh0.50.
The total expenditure for this endeavor is capped at Sh600.9 million, and the volume of stock targeted for repurchase represents 10 percent of the total issued shares.
According to Centum’s investor presentation, the 4.8 million shares acquired so far constitute 7.2 percent of the maximum possible shares that can be purchased over the 18-month period of the buyback program.
Importantly, this share buyback activity has contributed to the trading dynamics, making up 45 percent of the total trading activity, with 10.5 million shares traded in the same period.
Throughout the buyback program, Centum shares have been traded within a range of Sh8 to Sh9.50, averaging Sh8.81 per unit over the period.
The company has observed higher trading volumes when the share price drops below the offer price, providing sellers with a premium when selling to Centum.
This share buyback strategy was implemented by Centum to address the perceived undervaluation of its stock on the Nairobi Securities Exchange (NSE).
Beyond the immediate financial impact, share buybacks have the potential to reduce outstanding stock, potentially boosting market valuation and increasing stakes for existing shareholders.
The buyback program reflects Centum’s commitment to enhancing shareholder value and correcting the perceived undervaluation of its shares on the NSE.