Rhipe Limited (ASX: RHP) is a leading cloud channel company based out in New South Wales, Australia. RHP is engaged in providing license, business development, and knowledge services to the end customers who are assisted by various service providers, system integrators, and software vendors. They assist RHP in speeding up the adoption of the cloud amongst the end customers. It is one of the largest cloud company in the Asia-Pacific region providing cloud software licensing expertise. The company operates on a subscription-based sales model.
With the increasing demand for cloud across the industry, RHP has adopted various programs to become more "Cloud-friendly," by launching Microsoft Dynamics and other Microsoft volume license programs (LSP/LAR).
On 21 August 2017, the company announced the on-market buyback of its shares from the market of up to 10% of its fully paid ordinary shares which commenced from 06 September 2017 and continued for one year, ended on 05 September 2018. The total number of shares outstanding as on 21 August 2017 were 138,091,614 and the company intended to acquire approx. 13,504,994 shares from the market. The reason for the buyback given by the management was its capital management program. Shaw and Partners Limited were the broker acting on behalf of the company. Since the buyback was within the 10/12 limit, therefore, the approval from the shareholders for the program was not required.
As per the management, the share buyback program will result in better shareholder’s return and increase in earnings per share.
Up to 5 September 2018, the company bought back 3,412,231 shares from the market with the total consideration paid was $2,291,404.97 with the highest price paid on 22 January 2018 of $0.85 per share and the lowest price paid on 26 September 2017 of $0.61 per share.
On 22 August 2018, RHP announced to extend its on-market buyback of shares with the same broker. The extended buyback of shares started from 06 September 2018, i.e., two weeks after the company declared the extension of its buyback program and would again continue for one year, ending on 05 September 2019. The maximum number of shares that the company will buy back from the market is approx. 13,468,608.
Today, the company announced its daily share buyback update for yesterday, the details for which are as follows:
- 16,500 shares were bought back yesterday making a total of 5,020,354 shares bought back till yesterday
- The total consideration paid for yesterday’s buyback was $19,965.00, and the total consideration paid till date is $4,199,689.95
- The highest price paid yesterday was $1.21 per share and the lowest price paid was also $1.21 per share
- The highest price paid till date was $1.26 per share paid on 07 November 2018 and the lowest price paid till date was $0.61 per share paid on 26 September 2017
- The maximum number of shares still pending to be bought back from the market is 11,860,485
On 8 November 2018, the company declared its 1Q FY19 earnings ending 30 September 2018. It recorded an increase of 30% in group revenue being reported at $55 million. The gross margin also increased by 24% marked at $9.8 million. It reported the operating profit at $2.8 million and EBITDA at $2.1 million. The company also provided its FY19 operating profit guidance to lie between $10.5 million to $11.5 million.
During the year, the scrip price has soared by 42.86% rising from $0.84 at the beginning of the year to $1.20 as of December 27, 2018. Today, the scrip price has soared by 3.333%. RHP’s shares traded at $1.240 with the market capitalization of circa $165.11 million as on December 28, 2018 (AEST 04:00 PM).