The Turners Automotive Group Ltd (ASX: TRA) share price is on watch today after the New Zealand-based group announced a buyback of 5% of its issued share capital prior to market open.
What did Turners announce to the market?
Turners Automotive announced that it will re-commence the on-market share buyback program, of up to 5% of its issued share capital (4.474 million shares), that was initiated in November 2018.
Management also said up to a further 1.834 million shares may be acquired between 2 August and 30 September 2019.
The shares will only be acquired on the NZX Main Board (NZSX) and the acquired shares will be cancelled by Turners, thereby reducing the number of shares on issue.
Chairman of Turner's, Grant Baker, commented that the Board continued to believe that the share price did not appropriately reflect the fundamentals of the business.
"The Board believes that the purchase of shares, at current market prices, provides a return above the company's cost of capital and rewards long term shareholders."
He also added, "Turners has a strong balance sheet and is well-positioned to buy shares whilst the share price remains below the intrinsic value of the business."
How has the Turners share price performed in 2019?
The Turners share price has remained flat in morning trade at $2.16 per share, which translates to a market of $188 million for the New Zealand-based automotive group.
The stock remains tightly-held and thinly traded on the ASX, having only listed on the Aussie stock exchange in February 2018.
The group is dual-listed on the New Zealand Stock Exchange (NZX) at $2.17 per share but has fallen 30.67% in the last 12 months, with a similar move on the ASX.
The Turners share price fell on its April 2019 trading update, in which the automotive group reaffirmed its existing $32 million net profit after tax (NPAT) guidance but noted softening demand in its core Auckland market.
Turners also announced a comprehensive group strategy review in the update, with New Zealand's largest used vehicle retailer's share price plummeting from $3.00 per share to its current level at $2.16 per share.
The Turners 2019 share price performance pales in comparison to the likes of Automotive Holdings Group Ltd (ASX: AHG), which has seen its share price rocket 108% higher so far this year.
