Everything to know about the Telstra (ASX:TLS) $1.35bn share buyback

More than a billion dollars will be returned to Telstra shareholders. Here's how…

| More on:

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Telstra Corporation Ltd (ASX: TLS) share price is moving upwards in morning trade on Thursday following the release of its full-year results. At the same time, the company unveiled a juicy $1.35 billion share buyback for Telstra shareholders.

It appears the market is sufficiently pleased with the increase in earnings from the telco giant compared to the previous year. As a result, shares in one of Australia's largest companies are currently fetching $3.95 apiece.

What is getting investors excited?

Despite total income falling 11.6% to $23.1 billion for the company, investors seem relatively pleased with today's results. Cost reductions and increased revenue from its mobile business helped Telstra along to a slight increase in the bottom line.

Moreover, the commentary from CEO Andy Penn was rather positive. For instance, Penn noted that Telstra delivered on its guidance, marking a turning point in its financial trajectory.

An important one for long-term shareholders, the CEO suggested that Telstra's underlying business would return to full-year growth in FY22.

The Telstra share buyback

Drawing much excitement for shareholders, Telstra also announced it would be undertaking a $1.35 billion share buyback as a means of returning capital from the InfraCo Towers transaction. The cash splash is undoubtedly lighting up dollar signs in investor's eyes this morning.

Furthermore, the buyback will be conducted on-market during FY22. However, the exact dollar figure and timing is said to be dependent on market conditions.

Commenting on the capital return, Penn said:

When we launched T22, we committed to establishing a standalone infrastructure business unit for three reasons: to give transparency of those assets, to bring a harder commercial edge to how we operationalise them, and to create optionality with a view to maximising shareholder value.

This share buy-back is a clear demonstration of how we are creating additional long-term value for our shareholders.

The proposed start date was specified as 17 September 2021 in another document released to the ASX.

At the time of writing, the Telstra share price is trading at $3.95, representing an increase of 3.13%.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »

Father in the ocean with his daughters, symbolising passive income.
Dividend Investing

I'd spend $8k on these ASX 200 shares today to target a $6,102 annual passive income

I believe these ASX 200 shares will continue rewarding passive income investors for years to come.

Read more »

Three businesspeople leap high with the CBD in the background.
Share Market News

Boom! ASX 200 blasts to new record highs

ASX 200 investors just sent the benchmark index into uncharted territory.

Read more »