Ronson Development plans to buy back up to 2.5 million own shares
The maximum price at which Ronson Development intends to purchase its own shares has been set at PLN 2.10 apiece, which corresponds to the book value of a single share. The total amount allocated to the buyback program is PLN 2 million.
“As management board, we are convinced that the current market valuation of Ronson Development does not reflect the fair value of the firm. The company’s share price in recent period fluctuated significantly below the company’s book value. Considering the stable financial situation of the company, as well as popular valuation multiples, such as price to earnings ratio (P/E) or price to book value ratio (P/BV), the current market valuation of shares has to be considered very attractive. For this reason, we believe that the limited purchase of own shares is in the interest of the company and all its shareholders,” commented Nir Netzer, CEO of Ronson Development.
According to the management board’s proposal, which was approved by the company’s supervisory board, under the share buyback program Ronson Development plans to purchase up to 2.5 million shares, representing up to 1.53% of share capital. The maximum price at which the company could acquire its shares was set at PLN 2.10 apiece, whereas the maximum amount allocated for the share buyback program could not exceed PLN 2 million. The shares could be acquired by way of transactions concluded on the stock exchange or by way of a voluntary offer submitted to all shareholders (with proportional reduction of subscriptions if the sale offers exceed the total limit of shares that the company intends to acquire).
The shareholders of Ronson Development have yet to approve the share buyback program. The relevant resolution will be put to a vote during the Extraordinary General Meeting convened for 24 January 2019.
The precise terms and conditions of the purchase of shares (including the purchase price or the purchase price range) will be determined by the management board, after prior approval by the company’s supervisory board.
The buyback proposed by Ronson Development is supplementary to the company’s policy of regularly sharing profits with shareholders. Let’s recall that this year Ronson Development introduced a minimum annual dividend of nearly PLN 10 million, i.e. PLN 0.06 per share. Such an amount was paid out to the company’s shareholders in October 2018.
In November, the company released its financial results for three quarters of 2018. The net profit attributable to Ronson Development shareholders generated in this period amounted to PLN 15.8 million compared to PLN 9.5 million in FY2017.