GraceKennedy Boosts Shareholder Value With Share Buy Back

• GraceKennedy Limited (GK) has advised that the company repurchased 22,000 GraceKennedy shares under the ‘GraceKennedy Share Repurchase Programme’ between November 20 and 21.
• In a note to the Jamaica Stock Exchange (JSE), GK advised that the purpose of the purchase was to enhance shareholder value and that the maximum intended repurchase is up to 1% of the shares in issue (approximately 9,950,000 shares). The actual repurchased as at November 21 is a total of 22,000 shares.
• The company also noted that the source of funding of the purchase was the company’s cash flows, and the shares were purchased on the open market via its brokers.
• When a company buys back its shares from the stock market, it reduces the number of outstanding shares and increases the value of the remaining shares. Additionally, earnings per share (EPS) and return on equity (ROE) tend to rise, which may attract more investors, and given the increased scarcity of shares, this could drive up demand and potentially lead to an increase in the share price.

(Source: JSE)