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Emperador to buy-back P5 billion of shares


Liquor maker Emperador Inc. on Monday approved a two-year share buy-back program of up to P5 billion to enhance shareholder value.

"The board has approved the buy-back of shares up to P5 billion over a 24-month period. Our shares are undervalued and we believe that this exercise will enhance shareholder value over time," Emperador President Winston Co told the stock exchange.

The company reported a net income of P1.5 billion in the first quarter of the year, driven by higher contribution from international operations.

Emperador bought the Domecq brandies and wines of Pernod Ricard last year.

It also acquired Beam Suntory's brandy and sherry business for P13.8 billion in cash in 2015, and completed the acquisition of Whyte & Mackay Group Limited in 2014.

Ap Securities Inc. Senior Dealer Carlo L. Capacillo said the buy-back program is part of efforts to restore investor confidence.

"Management believes EMP is relatively undervalued, and so do we. The buyback restores investors' confidence that the slump is temporary, mostly due to the removal from the index," he said in a text message.

In February, Emperador Inc. was removed from the benchmark PSEi of 30 most valuable stocks on the PSE, and was replaced by Puregold Price Club Inc.

"Company, however, has been consistent, posting 7-percent higher earnings at P1.5 billion for 1Q17. We believe it has good upside. EMP is trading at only 13.3x verus consumer stocks at 20x P/E (price-to-earnings ratio)," Capacillo said. — VDS, GMA News

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