Shares of RPMGlobal Holdings Ltd (ASX: RUL) are lifting more than 2% higher on Friday and now rest at $1.66 apiece.
Investors might be bidding up the RPMGlobal share price today after announcing its intention to undertake an on market share buyback.
The company simultaneously provided a market update on Total Contracted Value (TCV) in the same release.
RPMGlobal to undertake share buyback
The board of RPMGlobal has made the call to buy back the company's own shares from the market. It considers this to "be a sound use of available capital".
"The RPM Board has resolved to undertake the Buy-back as part of RPM's ongoing capital management
strategy," the company said.
[T]aking into account the current and historical share price of the company and RPM's $36.9 million in available cash in the bank…[t]he RPM Board considers a buyback in these circumstances to be a sound use of available capital.
Under the planned repurchase RPMGlobal will acquire up to 5% of the company's current shares on issue, which is now approximately 11,450,000 shares.
However, there's no guarantee it will commit to this figure, and the entire program will depend on a multivariate of factors including the current share price, market conditions and the costs involved.
If it were to acquire all 11,450,000 shares, this would cost the company roughly $18.6 million, it says.
But, as mentioned, "there is no guarantee as to the number of shares that RPM will acquire under the buyback".
RPMGlobal also reserves the right to suspend or terminate the buyback at any time, per the release.
RPMGlobal share price snapshot
In the last 12 months, the RPMGlobal share price has clipped a 13% gain. However, it has struggled this year to date, having slipped 22% into the red in this time.
