Platinum extends share buy-back

Oksana Patron

19 September 2022

Platinum Asset Management has announced an extension of its on-market share buy-back up to 10% of its issued share capital for up to 12 months given the global stock markets’ volatility.

The move would provide the company ‘the maximum flexibility to act’ in case the board decided Platinum’s share price was trading as a significant discount to its underlying value, although no target price has been set, the company said in the announcement made to the Australian Securities Exchange (ASX).

According to the firm’s chief executive, Andrew Clifford, Platinum was ‘a somewhat unusual entity’ as it is a listed company but also operated a business with revenues largely dependent on the level of global stock markets.

“This creates additional leverage, on both the upside and downside, to the share market,” Clifford added.

“To assess whether the current share price represents fair value one needs to give consideration to a wide range of potential outcomes. It is not necessarily the case that a lower share price always represents better value.”

On top of that, global stock markets were currently facing a lot of uncertainty given the inflation, rising interest rates and geopolitical risks, which might create the potential for many different scenarios for businesses such as Platinum AM.

“In addition, our current dividend policy calls for the distribution of almost all of our profits each year by way of fully franked dividends,” Platinum’s CEO said.

“As any future buy-back is ultimately limited by our balance sheet capacity, any decision to implement the buy-back will only be taken where we consider that this is the best way to maximise value for our shareholders.”

The extension of the share buy-back program would commence from 4 October.