Experience Co Plans 75.7 Million Share Buy-Back Over 12 Months
Experience Co Limited has announced a significant on-market share buy-back of up to 10% of its issued capital, signaling renewed confidence in its financial health and future prospects.
- On-market buy-back of up to 75.7 million shares (10% of issued capital)
- Buy-back to commence around 12 June 2025, lasting up to 12 months
- No shareholder approval required under Corporations Act '10/12' limit
- Board views current share price as undervalued relative to asset value
- Buy-back reflects improved financial performance and strategic capital allocation
Experience Co Initiates Major Share Buy-Back
Experience Co Limited (ASX: EXP), a key player in the leisure and experiences sector, has announced an on-market share buy-back program targeting up to 10% of its issued share capital. This translates to approximately 75.7 million ordinary shares, with the buy-back expected to start around 12 June 2025 and continue for up to a year.
Strategic Capital Management Amid Improved Financials
The buy-back is being conducted within the legal framework of the Corporations Act, specifically the '10/12' limit, meaning it does not require shareholder approval. CEO John O’Sullivan emphasized that the decision follows a thorough review of the company’s financial performance, capital position, and future funding needs. The board believes the company is well positioned to execute this buy-back without compromising operational capacity or flexibility for future growth initiatives.
Undervaluation and Market Confidence
O’Sullivan highlighted that the current share price does not adequately reflect the underlying value of Experience Co’s assets. The board views the buy-back as an efficient use of capital, signaling confidence in the company’s operational performance and outlook. This move suggests management sees the shares as undervalued and is taking proactive steps to enhance shareholder value.
Flexibility and Market Responsiveness
The company retains the right to suspend or terminate the buy-back at any time without notice, allowing it to remain agile in response to market conditions and investment opportunities. This flexibility underscores a cautious yet confident approach to capital management amid evolving market dynamics.
Implications for Investors
For investors, this buy-back program could potentially support the share price by reducing supply and signaling management’s belief in intrinsic value. However, the ultimate impact will depend on market reception and the company’s ongoing operational results. Experience Co’s decision reflects a broader trend among ASX-listed companies to return capital to shareholders when share prices appear disconnected from fundamentals.
Bottom Line?
Experience Co’s buy-back signals renewed confidence but leaves open questions on timing and scale of execution.
Questions in the middle?
- How will the buy-back impact Experience Co’s capital structure and liquidity?
- Will the company maintain operational flexibility while executing the full buy-back?
- How might market conditions influence the pace and extent of the buy-back program?
