Seven West Media has approved an on-market buyback of up to 10% of shares on issue.
The on-market share buyback program will be conducted on an opportunistic basis over the coming 12 months.
Seven West Media noted that should it fully complete the proposed share buyback, leverage is forecast to remain within the group’s target leverage range of between 1.0 times to 1.5 times. The buyback will be funded out of existing debt facilities.
Seven West Media managing director and chief executive officer, James Warburton, said: “As flagged at the February 2022 interim results, the Board has assessed options regarding capital management during the second half.
“The significant improvement in our balance sheet over the past two years has enabled us to announce a share buyback, to commence following the announcement of the FY22 results.
“The on-market buyback will be for up to 10% of issued capital and will be highly earnings accretive for SWM shareholders,” he said.
“The Board believes this buyback is a prudent allocation of capital given where our share price is trading, but we will also continue to actively assess growth opportunities, be it acquisitions or investments in organic initiatives where they create shareholder value,” Warburton added.
Chief executive officer James Warburton and and chief financial officer Jeff Howard
This comes after Seven West Media posted its strongest financial performance in over a decade for its financial year results of 2022, announced on Tuesday.
The media company reported a statutory net profit after income tax of $211.1 million on group revenue of $1.54 billion.
It’s underlying net profit after tax (excluding significant items) was $200.8 million, an increase of 60% from the previous year.
Seven West Media’s report showed earnings before interest, tax, depreciation and amortisation (EBITDA) of $342.2 million and earnings before interest and tax of $309.0 million both increased 35% versus the previous corresponding period.
Warburton said: “These results mark the strongest financial performance by our company in over a decade and reflect the successful completion of the group’s three-year strategy.”
See also: Seven West Media posts its strongest financial performance in over a decade for FY22