The Motley Fool

What Investors Should Know About Share Buybacks in June 2019

A report by the Singapore Exchange recently showed that 25 companies bought back 37.5 million shares or units for a total amount of S$55.1 million. The latest buyback is down by over 50% from May 2019’s figure of S$123 million, and also down from June 2018’s amount of S$174 million.

The top six companies with the most significant share buyback amount in June 2019 are shown below:

Company Buyback Amount
Oversea-Chinese Banking Corporation Limited (SGX: O39) S$24.75 million
DBS Group Holdings Ltd (SGX: D05) S$12.06 million
Olam International Ltd (SGX: O32) S$4.67 million
Keppel REIT (SGX: K71U) S$4.17 million
Stamford Land Corporation Ltd (SGX: H07) S$2.56 million
Boustead Singapore Limited (SGX: F9D) S$2.54 million

Source: SGX report

Of the six companies above, Boustead Singapore commenced its new buyback mandate for the year in June. It purchased around 3.3 million shares, representing 6.7% of the maximum number of shares allowed to be repurchased in the current mandate.

Boustead Singapore announced its financial results for the fiscal year ended 31 March 2019 (FY2019) at the end of May. For the period, revenue grew 22% year-on-year to S$470.6 million while net profit improved by 24% to S$32.5 million. Excluding one-off gains, net profit fell slightly by 2% to S$29.8 million though.

Wong Fong Fui, chairman and group chief executive of the Boustead Singapore, had this to say about its latest performance:

“We achieved healthy, broad-based topline and bottomline growth in FY2019, with both our Energy-Related Engineering and Real Estate Solutions Divisions returning to full-year revenue and profit growth in a highly challenging market. Our Geo-Spatial Technology Division also recorded a third consecutive year of revenue and profit growth. Meanwhile, our new Healthcare Technology Division made nine months of maiden contribution.”

Boustead Singapore had a record order book backlog that stood at S$763 million, and prospects for the company’s various divisions are looking bright.

Boustead Singapore’s shares closed at S$0.775 each on Tuesday. At that share price, it had a price-to-earnings (PE) ratio of around 11 and a dividend yield of 3.9%. Comparatively, the SPDR STI ETF (SGX: ES3), a proxy for the Singapore stock market, sported a PE ratio of 12 and a distribution yield of 3.4% on the same day. The share buyback by Boustead Singapore could signal to the market that its shares are indeed undervalued.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Singapore Exchange Limited, Oversea-Chinese Banking Corporation Limited, DBS Group Holdings Ltd, and Boustead Singapore Limited. Motley Fool Singapore contributor Sudhan P owns shares in Singapore Exchange Limited and Boustead Singapore Limited.