Jardine Matheson Holdings has maintained a steady pace of buying back its shares for cancellation, trimming its share base. Thus far this month, the Hong Kong-based conglomerate has bought back and cancelled more than 1.07 million shares. In contrast, Jardine Matheson in 2023 bought back a total of 4.4 million shares worth US$209 million.
The most recent buyback was on April 24 when it acquired 2,400 shares on the open market at about US$38.1 each. Upon the cancellation of the shares, the company’s share base is around 287.2 million shares.
At the start of the month, there were just over 288.26 million shares, which means Jardine Matheson’s share base has shrunk by 0.37%.
The daily buybacks in April ranged from as little as 2,400 shares on April 24 to as high as 192,000 shares on April 19. During this period, Jardine Matheson had bought the shares back at a very tight open market price, ranging on average from about US$35.17 on April 15 to about US$38.82 on April 19.
The steady buybacks are taking place at a time when Jardine Matheson’s shares are trading at their lowest level in 14 years. From the recent peak of more than US$71 in February 2019, Jardine Matheson shares have lost nearly half their value.
Shares of Jardine Matheson, along with its various other listed subsidiaries and associates, have lost favour with investors since the protests started in Hong Kong. The stock took a hit from the pandemic and this was worsened by China’s slew of policies which undermined Hong Kong’s decades-old reputation as a free and vibrant business and financial gateway to the mainland. However, besides Hong Kong and China, the Jardine group has built up a very significant presence in the more vibrant Southeast Asia as well.
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As indicated by Jardine Matheson in its FY2023 ended December 2023 earnings announcement, Astra, the Indonesia-based conglomerate which it controls, put up a record performance. Many other key parts of its businesses also reported results that have risen above pre-pandemic levels. Supermarket operator DFI Retail Group D01 and hotel chain Mandarin Oriental both posted “strong recoveries” although some weak spots remain. For example, Thaco’s business in Vietnam remains challenging while its subsidiary Hongkong Land is similarly facing the stress from a challenging mainland property market.
All in, Jardine Matheson reported FY2023 earnings rose 94% y-o-y to US$686 million even as revenue dipped 4% y-o-y to US$36.05 billion. However, the company highlighted that its “underlying profit”, which it says is a more accurate indicator of its actual operating performance, rose 5% y-o-y to US$1.6 billion. “The group’s diversified portfolio continued to generate strong cash flows, supporting a strong balance sheet and creating a solid foundation for future growth,” the company says.
Jardine Matheson plans to pay a final dividend of US$1.65 per share, which brings its FY2023 full-year payout to US$2.25 per share, up 5% over FY2022.
Despite the slight improvements, chairman Ben Keswick warns that the year ahead remains challenging due to ongoing economic headwinds in key markets. “With new leadership in place across several group companies, and an effective long-term strategy, we are optimistic about the future and believe that we are well-positioned to take advantage of opportunities for mid- and long-term growth,” he adds.
Hongkong Land directors show commitment
Separately, Hongkong Land on April 22 announced that a group of its executive directors have committed to acquiring US$960,000 worth of shares from the open market between now and June, sending the share price up more than 4% the following day.
In its statement released via the Singapore Exchange S68 on April 22, the company said the group of executive directors included Alvin Kong, Ling Chang Feng, John Simpkins, Kenneth Foo, Raymond Wong, Yolice Wu and CFO Craig Beattie. Michael Smith, who just took over as the CEO on April 1, is not on the list.
“The acquisition of the company’s shares re-affirms management’s commitment and confidence in the value and long-term development of the company,” says Hongkong Land. As at Dec 31, 2023, its net asset value per share was US$14.49, down 3% from US$14.95 a year earlier.
