I added Austin Engineering just prior to it going ex-dividend. I think it’s a decent global business, and it looks cheap! Given the capital, size of the buildings and equipment needed to manufacture these mammoth mining dump truck trays and shovels, I believe they could have a small moat.
Business performance was going gangbusters until they ran into issues supplying orders in Chile which put pressure on the margins here. I think it’s a temporary issue that new CEO, Sy van Dyk, can fix. I expect ROE to be over 18% going forward. I agree with Sy, that the 10% buy back with Austin’s strong fundamentals and low share price is an excellent use of capital for the business.
On-market Buy Back Announcement
Austin Engineering Limited (ASX: ANG, ‘Austin’ or ‘the Company’) is pleased to announce that the Board has approved an on-market share buy-back for up to 10% of Austin’s ordinary shares to be undertaken over the next 12 months, unless completed or terminated earlier.
Austin’s balance sheet provides it with the flexibility to pursue value accretive capital management initiatives through share buy-backs, whilst also continuing to reinvest in its business and growth.
The buy-back will commence on or after 10 October 2025 and be completed within 12 months. It will be conducted in the ordinary course of trading over the period of 12 months. The final amount of the buy-back and the timing of any trades will depend on several factors, including market conditions, the Company’s prevailing share price, its future capital requirements and any unforeseen developments or circumstances that may arise in the course of the buy-back.
The buy-back is in accordance with the ‘10/12’ limit permitted under the Corporations Act 2001 (Cth) and does not require shareholder approval.
Austin CEO and Managing Director, Sy van Dyk, said:
“The on-market share buy-back reflects both the strength of our balance sheet and the confidence we have in Austin’s long-term growth prospects.
“With strong cash generation expected and a clear capital management framework, we see the buy-back as an excellent use of a portion of our capital, given the current metrics of Austin shares.
“This initiative enhances returns to shareholders today while increasing their exposure to a business that is well-positioned to deliver sustainable value into the future.”
Held IRL and SM