Nation Media Group (NMG) has completed a share buyback program that began on 28th June 2021 and closed on September 24th 2021 at 3.00 pm.
The exercise saw the media company buy back more than 17.1 Million of its ordinary shares at the Nairobi Securities Exchange(NSE) representing a performance rate of 82.25%.
Nation Media was targeting to buy back 10% of its issued shares equivalent to 20.74 Million at a price of Kes 25 per ordinary share. Any ordinary shares acquired through the buyback plan will be held at treasury shares.
A corporate share buyback is repurchasing of shares by the company that issued them usually at a price higher than the market price. When it buys back, the number of shares outstanding in the market reduces.
A buyback allows companies to invest in themselves. By reducing the number of shares outstanding on the market, buybacks increase the proportion of shares a company owns. The reasons for buy-back are to improve earnings per share, return on capital, return on net worth and to enhance the long-term shareholder value.
“Through this buyback we believe shareholders will realise value and cash in at a reasonable price. Last year was a difficult year and NMG share price went down from about Kes40 ($0.37) at close of 2019 to Kes16 at the end of 2020. There was a lot of volatility and the few shareholders who wanted to sell were not getting value for their investments,” Wilfred Kiboro, Nation Media Group chairman.
Nation media’s share has been performing well at the Nairobi bourse since the announcement of the buyback programme, gaining 44 per cent after the announcement to close trading at Kes25 June 29. Currently, the shares are exchanging hands at Kes 24.65.
However, with next year’s polls round on the horizon – NMG is expected to ride the surge in demand for radio and TV advertising by the political class to lift its performance further.