RPMGlobal Holdings Limited

ASX:RUL

RPMGlobal Holdings Limited

ASX:RUL
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$3.16 (-0.9%)
Last close price
#7
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53
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79
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Reports (12) My Report Forum Investors
Forum Topics RUL RUL Buy Back

Pinned straw:
mikebrisy
Added 2 months ago

I've been wondering what's been going on with the $RUL buy back program over recent weeks, i.e., nothing.

At last results, CEO John Mathews said they'd continue to buy back shares in preference to issuing dividends as they don't have the franking credits, and within the existing program there is still ample capacity. But the last buyback announcement was 30-Aug. - which given the patterns of the last 18 months or so, is a significant pause. In the recent past, SP progression hasn't inhibited them steadily chipping away, so I wondered if the apparent pause was just that they wanted to build up some cash, but that didn't really make sense as they are well cash up.

Then this morning they posted this announcement about the fothcoming release from escrow of 0.53m shares from a 2021 acquisition on 30th Sept, and a lightbulb went off.

Having held back from repurchases, they are probably poised to snap up all these shares if ESG (the owners of the $RUL shares that were put in escrow as part of the deal) decide to offload them.

What do other holders or watchers think?

This is not material in any way to my investment thesis for $RUL, but just some idle speculation. On Friday's when I've achieved my priority work around my portfolio for the week, I usually take some time generally catching up on less significant developments in my portfolio and my watchlist. A nice gentle way to wind down for the Great Australian Weekend. (I don't do lunchtime drinking!)
thunderhead
Added 2 months ago

The brief buying opportunity post earnings last month has passed in a hurry, unfortunately.

13
lyndonator
Added 2 months ago

@mikebrisy I suspect you are correct - it seems the most likely reason. Also, you are the one who tracks the buy backs most closely (which I very much appreciate the updates on!) So I think are the best person to judge what is going on here.


The only other reason I could think is, I know you said previously when the price was dropping, they had increased the buy back amount (presumably to help shore up the share price as well as buying more cheaply). Perhaps they feel the need to build back the cash they had spent (although they seem to have plenty spare anyway) - Just in case there is a need to do it again, which the ending of those shares in escrow might cause. So, in the end, kinda amounts to the same thing.


It is handy to know the current buoyancy in SP has been maintained without their buy back pressure - but as you say doesn't change the long term thesis.


17
mikebrisy
Added 2 months ago

@lyndonator I had the same thought as you about the SP holding up well in the absence of the steady daily Buy Back volumes.

And, like you, I wondered why they didn't make more use of the option value of volatility. But I assume they know what they are doing.

Tracking this isn't a major focus. It just tends to be something I do when I need a short break from more hard core, mentally taxing research and analysis!

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