‘Well progressed’ share buyback puts Whitehaven Coal shares on the front foot

Whitehaven Coal shareholders seem pleased with the company’s latest announcement.

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A female coal miner wearing a white hardhat and orange high-vis vest holds a lump of coal and smiles as the Whitehaven Coal share price rises today

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Key points

  • Whitehaven Coal shares lift 3.42% to $4.84 during mid-afternoon trade 
  • The company said it is progressing well in its share buyback program  
  • The Whitehaven Coal board approved an increase from the current $400 million share buyback cap to $550 million 

The Whitehaven Coal Ltd (ASX: WHC) share price is advancing today following the company’s update regarding its share buyback program.

At the time of writing, the pure play coal miner’s shares are up 3.42% to $4.84.

Whitehaven Coal increases share buyback size

According to its release, Whitehaven Coal advised that its $400 million on market buyback is progressing well.

Since commencing the program on 8 March 2022, management has spent $362.6 million acquiring back 76.4 million Whitehaven Coal shares. The average price paid is around $4.75 apiece which is slightly under the current share price.

This means that another 26.9 million shares are still yet to be bought back under the company’s 10% buyback program.

Nonetheless, to complete the proposed buyback, the board has approved an increase of the current cap to $550 million. This represents an increase of 37.5% from the original $400 million program.

The company noted it won’t be buying back any shares from 1 July, ahead of its June quarter production report and FY22 results. They are scheduled to be released on 18 July, and 25 August, respectively.

However, Whitehaven Coal will recommence its share buyback activities on 26 August before moving into another blackout period from 30 September.

The company is expected to deliver its September quarter production report on 19 October and Annual General Meeting (AGM) on 26 October.

Around this time, it is estimated that the 10% share buyback program will be completed.

What did management say?

Whitehaven Coal CEO and managing director, Paul Flynn commented:

We are pleased with the progress of our share buy-back programme, which is an efficient way of returning capital to our shareholders.

It supports our ambition to reduce share count and deliver sustainable benefits for our shareholders who continue to hold shares in Whitehaven. With fewer shares on issue, the buy-back is an effective way to improve return on equity, earnings per share and dividends per share.

While we have seen solid capital growth in the stock in recent months the share buy-back remains a value creating and highly attractive opportunity for the Company, and we expect it to remain a feature of our capital management programme going forward.

Whitehaven Coal share price snapshot

Adding to today’s gains, the Whitehaven Coal share price has accelerated more than 140% in the past 12 months.

A boom in energy prices from March 2022 led its shares to travel 50% higher in the space of 3 months.

Whitehaven Coal commands a market capitalisation of about $4.9 billion and has approximately 979.62 million shares on its registry.

Motley Fool contributor Aaron Teboneras 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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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