SGH approves 500 million share buyback
- Diversified industrial operating company SGH has approved an on-market buyback of its ordinary shares worth up to $500 million over the next 12 months.
- SGH shares rose 2.96% to $44.55 following the announcement on the morning of June 22.
- SGH stated that the capital initiative forms part of its disciplined approach to capital management as its leverage falls below its through-the-cycle target of 2 times adjusted net debt to earnings before interest, taxes, depreciation, and amortisation.
The Australian industrial conglomerate SGH (ASX:SGH) has approved an on-market share buyback programme to repurchase up to $500 million of its ordinary shares over the next 12 months.
The capital return framework comes as the business reports a reduction in group leverage beneath its historical internal debt thresholds.
The company did not include an executive quote in its market announcement regarding the implementation of the share buyback programme.
SGH stated that the buyback operation will commence on or about Aug. 11 following the conclusion of the company's financial year blackout period, and management confirmed that the transaction size will not reduce its flexibility to fund internal investments or pursue external growth opportunities.
The buyback programme will run flexibly over the next year depending on prevailing equity market conditions.
Following the announcement, the SGH share price was up at $44.55.
The group operates a portfolio of industrial businesses that includes the national equipment hire provider Coates and the West Australian Caterpillar heavy machinery dealership WesTrac.
The corporate parent also consolidated full ownership of the domestic construction materials supplier Boral in 2024 alongside maintaining a 30% interest in energy producer Beach Energy (AX:BPT).
