BUSINESS REPORTER
Econet Wireless Zimbabwe bought more than 40m of its shares in November as it seeks to hold a fifth of its shares in line with a resolution by the company’s shareholders at an AGM last year.
Last year, Econet shareholders gave the company the nod to buy back its shares at a price not greater than 5% above the weighted average of the market value for the securities for the five business days immediately preceding the date of the repurchase and that the maximum number of shares authorised to be acquired shall not exceed 20% of the company’s issued ordinary share capital.
In a statement accompanying Econet’s financial results for the half year ended August 31, board chairman James Myers said the company bought back and is cumulatively holding 107 609 339 treasury shares, in line with the authority granted at the last AGM.
The shares held under Treasury represent about 4% of the total shares in issue. Econet has 2,590,577,000 shares in issue, according to statistics from the Zimbabwe Stock Exchange.
A share buyback occurs when a company uses cash on hand to buy and retire some of its own shares in the open market. Also known as stock repurchase, it tends to boost share prices in the short-term, as the buying reduces the supply of outstanding shares and the buying itself bids the share higher in the market.
Revenue closed the period at ZWL$ 10.1bn, down from ZWL$10.8bn in the same period last year.
Myers said the business continues to generate adequate cash flows on the back of an EBITDA margin of 47%, made possible by strict cost management policies adopted by the business.
