Steel coils. Picture: BLOOMBERG
Steel coils. Picture: BLOOMBERG

The share price of steel products manufacturer Argent Industrial was on track for its best performance in two months on Wednesday afternoon, after it said headline earnings per share (HEPS) in its year to end-March could rise by more than a third.

HEPS is expected to rise by between 15.9% and 35.9% from 104.4c previously, the group said in a trading statement, without giving details. Headline earnings are a widely used profit measure in SA in which exceptional items are stripped out to give a better indication of underlying performance.

Argent, which owns a range of manufacturing subsidiaries, including steel furniture and mining equipment, has been repurchasing shares after getting shareholder approval for this at its AGM in August 2019.

Share buybacks are often conducted when management feels a share is undervalued, and Argent did not declare an interim dividend in its six months to end-September, opting instead to use excess cash to repurchase and cancel its own shares.

The group said in April that up to the end of March it had repurchased some 16-million shares, equating to about 20% of issued share capital as of the date of the AGM.

Argent has been conducting share buybacks regularly since 2015.

In afternoon trade on Wednesday, Argent’s share price was up 8.33% to R5.20, on track for its best one-day performance since May 12.

The group's share price of the group, which has a market capitalisation of R336m, has fallen 9.57% so far in 2020.

gernetzkyk@businesslive.co.za

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