Australian Clinical Labs Ltd (ASX: ACL) has announced a buyback of up to 10% of its issued capital, sending its share price more than 5% higher on Thursday.
But the company's share price remains currently well down on where it was this time last year, closing at $2.53 per share on Wednesday before the buyback was announced.
This compares with $3.71 at this time last year, a full 31.8% higher than what the shares are changing hands for at the close on Wednesday.
The shares traded as high as $2.66 in early trade on Thursday, up 5.1%. The company was valued at $495.4 million at the close of trade on Wednesday.
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Still looking for acquisitions
ACL, which was also holding its annual general meeting (AGM) on Thursday, said the buyback was a disciplined way to deliver value back to shareholders.
The company said:
The board believes that a share buyback program provides an opportunity to enhance value for ACL shareholders, without compromising the company's strong balance sheet, whilst also delivering accretive investment opportunities.
The buyback is expected to start on about November 12 and run for 12 months, buying back up to 19.5 million shares.
Chair Stephen Roche said in his address to Thursday's AGM that the company was continuing to look at acquisition opportunities.
Chief executive Melinda McGrath said in her address to the meeting that the company delivered strong results last financial year in a challenging environment.
Going forward, the company reaffirmed its FY26 guidance of revenue of $760 million to $780 million and EBIT of $67 million to $73 million.
Ms McGrath added:
ACL re-confirms this guidance range, notwithstanding that market volume in the first three months of FY26 has been relatively flat year on year. It is important to note that this first quarter is in comparison to a very strong growth period in the same quarter in the prior year, so this is not entirely unexpected. Specific revenue and billing initiatives … have so far shown positive outcomes, which is partially offsetting the slower market growth.
Ms McGrath said the company continued to drive innovation in areas such as the use of artificial intelligence and machine learning, and "as a result, profitability for the first quarter is in line with our expectations''.
In the last financial year, ACL generated revenue of $741 million, up 6.4% on the previous year, and "ahead of market growth", Mr Roche said. Underlying EBIT came in at $68 million, which was 8.7% up on the previous period.
ACL bought back $19 million of its own shares last financial year and paid $25 million in dividends.
According to the ASX website, its dividend yield is 4.94% fully franked.
