As per ASX announcement dated 4 January 2019, diversified consumer discretionary company, Schaffer Corporation Limited (ASX: SFC) releases its daily share buy-back update for 3 January 2019.
The company announced the on-market buy-back programme on 18 October 2011 with the intention to re-purchase maximum of up to 7,00,000 shares effective 2 November 2011. Alto Capital was designated to act on the company’s behalf. The management considered this programme as an effective capital management tool.
As of 3 November 2019, Schaffer Corporation had brought back a total of 3,02,204 shares with 2,660 shares brought back yesterday. The company had paid a total consideration of $28,74,608.92 till 3 November 2019, with $34,579.52 paid yesterday. The highest price allowed under rule 7.33 is $14.02. The company paid the highest price of $13 and the lowest price at $12.98 yesterday. Till date, the company paid the highest price of $13.30 on 11 July 2018 and lowest price of $3.20 on 3 January 2012. Schaffer can further buy back a maximum of 397,796 shares.
Business Nature: Founded in 1955, the company operates in diversified business segments of Property Investments, Automotive Leather and Building Materials across Australia, Asia and Europe. The Automotive Leather division supplies high-grade leather products to big brands such as Audi, Mercedes, Nissan, Toyota and many more. Through the 100% owned subsidiary Delta Corporation, the Building Materials segment supplies beam products, concrete floor and wall products. The company’s Property Investment segments operate via equity and property investments both on its own and via subsidiary company Gosh cooperation.
Financial performance: In the recently released annual financial results, Schaffer Corporation declared Net Profit After Tax of $23.3 million for 2018 financial year, as compared to $5.9 million in 2017. The group declared a fully franked dividend of $0.45 per share as compared to $0.26 per share in the previous year. The company reported an impressive 174% increase in underlying profit to $22.5 million, driving on the returns from investment in the automotive leather segment. The company was able to reduce net debt by 9.7% to $1.3 million in FY18 attributable majorly to cash flows from the sale of Building Materials segment. The company’s earning per share stands at $1.67 with 38% Return on Average Capital Employed.
The company anticipates stronger financial results by Automotive Leather segment in 1H FY19. Despite challenging situation for Building Materials division, the management expects improvements in the first half of the current financial year.
Stock performance: Over the past year, the stock of Schaffer Corporation has witnessed a strong performance growth of around 15.9% but in the last three months, the share price plunged by 20.7%. The shares closed in red today with the close of trading session. The share price settled at $12.98, down by 0.61% as compared to the previous close of $13.06. With earning per share of AUD 1.667, the price-earnings ratio stands at 7.830x. The annual dividend yield stands at 3.45.