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Century Properties prepared to buy back shares to support price

Posted on January 08, 2013 10:22:17 PM [ BusinessWorld Online ]
THE BOARD of Century Properties Group, Inc., following a special meeting on Monday, approved the company’s plan to embark starting this month on a two-year, P800-million share buyback program -- the firm’s first -- to drive up the value of the company’s shares when needed, the Antonio-led company said in a disclosure yesterday.
  The disclosure said the board had given authorization “to implement a share buyback option program from any shareholder who opts to divest of his shareholdings.”
“Such share buyback program will be up to P800 million worth of shares for a…period of up to 24 months and shall be implemented as early as January 2013,” the disclosure read.
Century Properties said it will resort to the program “only if and to the extent that the price per share is deemed undervalued, share prices are considered highly volatile, or in any other instance where the corporation believes that a buyback will result in enhancing shareholders’ value.”
Company officials were not immediately available for comment.
“This is the first buyback program of Century Properties,” the company said in a separate statement yesterday.
“Share buybacks are implemented when there is no other way to boost a company’s share price without company intervention,” Freya May B. Natividad, analyst at online brokerage 2TradeAsia.com, said in a telephone interview yesterday when asked to explain Century Properties’ move.
“Last year, we valued Century Properties’ net asset value at P2.20 with expectations of robust earnings for 2012, but it hasn’t reached that point yet,” she noted.
“So, right now, you can say it’s (Century Properties shares are) undervalued. That’s probably why they’re implementing this buyback.”
Shares of Century Properties gained seven centavos or 4.19% to close at P1.74 apiece yesterday from their P1.67 finish last Monday.
STRONG EARNINGS
Century Properties, formed in 1986, is a high-end developer with over 40 projects in its portfolio as of end-2011, according to its 2011 annual report. It debuted on the stock exchange in September 2011 by way of back door, replacing dormant energy firm East Asia Power Resources Corp.
The company programmed a budget of approximately P7 billion for 2012.
As of end-2011, Century Properties had completed 4,128 units in 20 condominium buildings, with a total gross floor area (GFA) of 548,262 square meters (sq. m.), and had a 1.97-million-sq.-m. land bank consisting of properties in Quezon and Batangas cities, according to its latest financial statement.
The firm’s development portfolio is expected to grow upon completion of its four master-planned communities in Metro Manila and Cavite that will add a combined estimated GFA of 1.19 million sq. m.
Century Properties had said in April last year that it expects to double its net income to about P1.73 billion for 2012 from P866 million in 2011. The company grew its net income by 95.13% to P1.41 billion as of September last year from P722.60 million in the same nine months in 2011, fueled by the robust sales of its property projects.
In the same comparative periods, revenues -- derived from real estate sales, property management fees and other services, as well as interest and other income -- more than doubled to P7.22 billion from P3.55 billion, as did costs and expenses to P5.35 billion from P2.57 billion. -- Franz Jonathan G. de la Fuente           
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