CSL launches another share buyback

17 Oct 2012, 3:10 pm   -   Source: AAP

CSL has confirmed it expects to grow profit by 12 per cent this financial year and it announced another $900 million share buyback.

Blood products and vaccines supplier CSL Ltd will undertake another $900 million share buyback and still expects its profit to grow by about 12 per cent in fiscal 2103.

The buyback is a continuation of the company's efforts to improve its capital strength and will further improve its earnings per share performance.

CSL will buy up to $900 million in shares over 12 months from November 1, representing about four per cent of its total shares on issue.

The company began an identical buyback 12 months ago, which is currently 94 per cent completed, with about $850 million worth of shares purchased.

"Through these buybacks, our shareholders benefit from improved investment return ratios, such as on earnings per share and return on equity," CSL chairman John Shine told CSL's annual general meeting on Wednesday.

CSL shares were up 90 cents, or 1.93 per cent, at $47.64 1401 AEDT.

CSL also reiterated its guidance of 12 per cent profit growth in the 2012/13 financial year.

CSL chief executive Brian McNamee said that CSL remained "very well placed", generating very positive cash flows and high returns, having low gearing, and investing heavily in research and development and new production facilities.

"We are anticipating continuing growth," Dr McNamee said.

"We consider the trading conditions to be relatively similar this year to last year."

Dr McNamee said that CSL, which will start reporting its results in US dollars in the current financial year, was anticipating revenue growth of about 10 per cent to about $US5 billion this financial year.

"We are again looking for a successful year from a profitability perspective, with NPAT (net profit after tax) growth of approximately 12 per cent," he said.

Dr McNamee said CSL was continuing to strengthen its presence in emerging markets such as China and elsewhere in Asia, Latin America and the Middle East.

But the company would focus on developing specialty and haemophilia products in wealthier, sophisticated markets such as the United States, Europe and Australia.

CSL made a net profit of $982.6 million in the 2011/12 financial year, up 4.5 per cent from the previous financial year.

Earnings per share growth in 2012/13 is expected to be stronger than profit growth, due to the newly announced buyback.

CSL shareholders on Wednesday voted in favour of the company's remuneration report.

However, Australian Shareholders Association (ASA) representative Don Hyatt said the ASA believed that the remuneration received by the executives of many Australian companies was excessive compared to that of the regular salary earner.

Mr Hyatt said CSL executives had pay packages ranging from 15 to 100 times the average full-time wage in Australia.

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