AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Summary
- Shares of IMI Plc rallied 11 per cent in the afternoon deals on Monday.
- Heavy buying has been largely fuelled by share buy-back and increased outlook.
- IMI has agreed to repurchase shares with a value of up to £100 million.
Shares of IMI Plc (LON:IMI) rallied a little more than 11 per cent in the afternoon deals on Monday, 26 April, after the Birmingham-headquartered electronics and electric equipment manufacturer, commenced the £100 million share repurchase programme. The stock of IMI extended the gains after rising over 6 per cent in the wee hours of trading in quick successions.
According to the data available with the London Stock Exchange, the stock of IMI registered a 7-year high on Monday, witnessing a sharp appreciation in the share prices. IMI shares amassed a gain of 11.31 per cent, hitting a 7-year high of GBX 1,555 from the previous close of 1,397. The stock of IMI last hit a high of GBX 1,566 on 18 June 2014.
IMI Plc (26 April)
(Source: Refinitiv, Thomson Reuters)
Raising FY21 outlook
The buying frenzy in the IMI shares has been largely fuelled by the share repurchase programme and the heightened outlook for the financial year 2021. The company has increased the guidance for 2021 full year adjusted earnings per share (EPS) to GBX 81 to GBX 87 from the earlier stated guidance of GBX 75 to GBX 82, IMI said in an early morning regulatory disclosure on 26 April.
The engineering firm has done an upward revision in the guidance following the strong performance in the January-March quarter across all the three divisions, namely IMI Precision Engineering, IMI Critical Engineering, and IMI Hydronic Engineering.
£100-million buy-back
Under the proposed share buy-back arrangement, IMI has agreed to repurchase shares with a value of up to £100 million. The repurchasing of shares is subject to the remaining shares within the AGM authority. The share buy-back programme started on 26 April 2021, will remain open for a period of three-and-half months up till 4 August 2021, while the shares repurchased after the termination of the buy-back programme will be cancelled.
However, the price at which the shares will be bought back has not been disclosed by IMI as on the date of share buy-back announcement.
The share repurchase programme has been introduced to effectively reduce the free float capital of the company. In order to carry out the formalities and to manage the share repurchase programme, IMI has entered into an agreement with JP Morgan Securities Plc (JPMS).
Investors participating in the share repurchase programme can take a due note that JPMS is entitled to undertake transactions in the shares for activities including sales, hedging, in addition to purchases. Such transactions can be completed on any available trading venue or on an over-the-counter (OTC) basis during the buy-back window. JPMS will not be reporting the details of such transactions as a result of an arrangement agreed with IMI, the company said in a separate regulatory filing.
