DANGOTE Cement Plc has announced the completion of its first tranche of the share buy-back programme which lasted for two days, from July 17 to 18.
In the company’s disclosure which was signed by the Head of Investor Relations, Temilade Aduroja, the total number of shares repurchased was 121,404,714, representing 0.71 percent of the company’s issued and fully paid ordinary shares.
The shares was repurchased at an average price of N339, valued at N41.15 billion.
“Following the conclusion of Tranche I, the total number of issued and fully paid outstanding shares of DCP amounts to 16,752,154,537.
“The repurchased shares will be held as treasury shares and may subsequently be cancelled. Execution of this Tranche I did not have any material impact on the Company’s financial position,” the statement read.
A share repurchase reduces the total assets of the business so that its return on assets, return on equity and other metrics improve when compared to not repurchasing shares.
Reducing the number of shares means earnings per share (EPS) can grow more quickly as revenue and cash flow increase.
According to the company, one of the reasons for the share buyback is to increase long-term shareholder value.
Also, the exercise is expected to support the cement manufacturer’s continuous capital structure and balance sheet optimisation process.
Dangote Cement Plc has chosen to implement a share buy-back programme as a strategic measure aimed at tackling its high leverage and bolstering investor confidence.
By repurchasing shares, the company reduces its total assets, leading to improved metrics such as return on assets and return on equity when compared to not engaging in share repurchases.
Additionally, a reduction in the number of shares allows for faster growth of earnings per share (EPS) as revenue and cash flow increase.
By repurchasing shares, Dangote Cement Plc aims to improve the efficiency of its financing and balance sheets, resulting in a reduction in the cost of capital and an enhancement of investors’ value.
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