Australia's Cimic to Buy Back More Shares -- Update

   By Rhiannon Hoyle 
 

SYDNEY--Cimic Group Ltd., the Australian construction company controlled by Germany's Hochtief AG, said it will continue to buy back shares in the year ahead, effectively extending a program of shareholder returns it started a year ago.

Cimic said its board on Monday approved plans to buy back up to 10% of fully paid ordinary shares in the year starting Dec. 29.

Shares in the company rose as high as 32.83 Australian dollars (US$24.48) a share, their priciest since July. The jump, 2.4% at its peak, outstripped a slight lift in the index of Australia's top 200 companies.

"The new buyback announced today will continue to improve shareholder returns and enhance capital efficiency, while maintaining sufficient balance sheet flexibility to pursue future growth and investment opportunities," Cimic said in a regulatory filing.

The Sydney-based company announced a year ago that it would start buying back shares, citing a strong balance sheet and good cash flow.

By Sept. 30, Cimic had purchased 14.3 million shares, or 4.2% of its total number of shares before the start of the buyback, valued at A$425.9 million. That program is due to end on Dec. 28.

Cimic described the buybacks as a "disciplined approach to capital management."

This year's has increased Hochtief's ownership of the company, with its interest nearing 73% from roughly 70% in late 2015. Hochtief is controlled by Spanish builder Actividades de Construccion y Servicios SA.

Cimic, a global contractor and leading contract miner, said it will use a combination of existing cash and working capital facilities to repurchase the shares. The timing and number of shares it buys will depend on the share price and market conditions, Cimic said.

Write to Rhiannon Hoyle at [e-mail]

(END) Dow Jones Newswires

December 12, 2016 00:39 ET (05:39 GMT)

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