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Why Is Stantec Renewing Its Share Repurchase Program Again?

2 min read | December 11, 2024 03:40 PM MSK | By Team Kalkine Media
Why Is Stantec Renewing Its Share Repurchase Program Again?
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Highlights:

  • Stantec has received approval to renew its Normal Course Issuer Bid (NCIB), allowing the repurchase of common shares between December 13, 2024, and December 12, 2025.
  • The company also renewed its automatic share purchase plan (ASPP) to enable share purchases during trading black-out periods.
  • In 2023, Stantec repurchased over 129,000 shares for C$10 million, but no shares were repurchased in 2024 due to strategic acquisitions.

Stantec (TSX:STN) operates within the engineering and construction sector, providing professional services in planning, design, and project management. The company specializes in various sectors, including infrastructure, energy, and environmental services, helping clients achieve sustainable and innovative outcomes.

Renewal of Normal Course Issuer Bid (NCIB)

Stantec has received approval from the Toronto Stock Exchange (TSX) to renew its Normal Course Issuer Bid (NCIB), enabling the company to repurchase a set number of its common shares. The repurchase program will run from December 13, 2024, to December 12, 2025, with the aim of buying back up to a designated percentage of outstanding shares. The company's strategy includes daily repurchases up to a specified number of shares, excluding block purchases. This move is in line with Stantec’s commitment to balance sheet management and financial strategy.

Share Repurchase History and Focus on Acquisitions

In 2023, Stantec repurchased a significant amount of shares, spending a total of C$10 million to buy back over 129,000 shares at an average price of $77.25. However, the company did not repurchase any shares in 2024, as its focus shifted to strategic acquisitions. This shift included the acquisition of notable engineering firms such as ZETCON Engineering, Morrison Hershfield, and Hydrock, reinforcing Stantec's growth trajectory and expanding its capabilities in the global market.

Automatic Share Purchase Plan (ASPP)

To facilitate repurchases during periods when trading may be restricted, Stantec also renewed its Automatic Share Purchase Plan (ASPP). This plan allows the company to purchase shares during trading black-out periods, ensuring a smooth continuation of the share repurchase strategy while adhering to regulations. The ASPP supports Stantec’s broader goals, contributing to financial flexibility and balance sheet strength.

Growth and Financial Stability

Stantec's share repurchase program, alongside its recent acquisitions, highlights a balanced approach to growth and financial stability. The company aims to maintain a solid balance sheet while reducing debt, further driving its efforts in growth initiatives. Stantec’s commitment to these objectives positions it for continued success in its industry, while also supporting shareholder value.

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