Explosives and fertilizer maker Incitec Pivot Limited (ASX: IPL) today extended time-frame for its $300 million share buy-back plan.
Earlier in November 2017, the company announced the share buy-back of up to $300 million which was planned to be undertaken over the 12-month period from 29 November 2017 to 28 November 2018. But just around 1 month prior to the expiry of this term, Incitec Pivot today announced the extension of buy-back period. It stated that company’s buy-back plan as lodged in November 2017 has now been extended to further 12 months, that translates the closure of $300 million buy back to take place on 28 November 2019.
Further, the company has bought back ~$200 million of its shares by the end of August 2018.
Ahead of buy-back period extension, Incitec Pivot traded flat today.
Should you invest in Incitec Pivot Limited?
Australia’s leading supplier of fertilizers Incitec Pivot presents a robust balance sheet with Net debt of $1.7 billion and Net debt/EBITDA of 2.2x as at 31 March 2018. The company further has access to diverse funding markets US$217M & A$360M of Syndicated bank facilities refinanced with US$220M & A$260M 3-year facilities in August 2018; US$800M 144A bond and A$200M bond maturing in 2019 to be refinanced, extending tenor of debt.
There has been continued investment by the company in maintenance capital. Sustenance capital expenditure of the company is expected to record a growth capital of ~$65 million in FY18, while ongoing average annual sustenance capital expenditure is forecasted to be between ~A$180 million to ~A$260 million. The company intends to keep its dividend policy unchanged at 30% to 60% payout ratio.
Incitec Pivot has got the investment grade credit rating of BBB and Baa2 from Standard & Poor and Moody, respectively.
The stock of Incitec Pivot last traded at $3.860. However, in today’s trading session, as at 22 October 2018, the stock has witnessed no daily price movement while it has edged up 2.93% over the past one year. The PE ratio was 37.290 x with market capitalization of $6.29 billion as on 22 October 2018.
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