M&R opts for share buyback
Market fails to react as construction contractor says it will spend equivalent of 4.3% of its market capitalisation
With Murray and Roberts (M&R) shares trapped at levels where they traded 15 years ago, Friday’s news that it is to spend R250m buying back shares should come as a surprise to few. But the decision by the company to spend the equivalent of 4.3% of its market capitalisation of R5.87bn did little to rouse excitement. The stock hit a peak of R104 on August 31 2008. It closed at R13.07 on Friday, down 2%. Even so, some of the country’s biggest fund managers — the Public Investment Corporation (PIC), Allan Gray and Coronation Fund Managers — have taken big positions in M&R and other construction and engineering companies in SA despite razor-thin margins, the regulatory backlash against their World Cup collusion and the evaporation of public sector spending. M&R, which has now exited the heavy construction business in favour of work in the gas and resources sector, says its share price "continues to undervalue" its prospects. The company is adamant that the 2018 financial year will "be th...
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