Conglomerate Alliance Global Group Inc. said its board approved a P5-billion two-year share buyback program to improve shareholder value.
AGI president Kingson Sian said during the annual stockholders’ meeting of the company that its shares were “hugely undervalued” despite showing decent profits and attractive growth prospects.
“We are undertaking this corporate action because we believe that our shares are grossly undervalued. Our group has been consistently profitable, with attractive growth prospects, and enjoys strong brand equity and therefore views this exercise as a means to enhance shareholder value over time,” Sian said.
Share price of AGI dropped to a 52-week low of P12.20 on March 14 from a high of P16.50 on Sept. 22, 2016.
AGI said to sustain growth, it budgeted P80 billion for 2017 capital expenditures, of which 75 percent would be spent for Megaworld Corp.’s residential developments and the construction of office and commercial projects.
Over 10 percent will be used to fund the ongoing expansion program of Travellers International Hotel Group at Resorts World Manila while the balance is intended for Emperador Inc.’s capital expenditures and store rollout by Golden Arches Development Corp., the local franchise holder of fast-food giant McDonald’s.
Sian said Megaworld was looking to launch P30 billion worth of residential projects this year and was continuously building its office and commercial portfolio.
Megaworld expects revenues from rental business to hit P20 billion by 2020.
Emperador, the world’s largest brandy maker, continues to benefit from recent international forays and highly-integrated operations which allowed for better operating margins.
The company also successfully marketed its Emperador Brandy 350-ml, Andy Cola and Hotshots Brandy aimed at the millennials in the domestic market.
Whyte and Mackay, the 5th largest Scotch whisky manufacturer in the world, widened its market penetration in Asia, the United States and travel retail through single-malt Scotch whisky brands The Dalmore and Jura.
GADC plans to open 40 to 50 stores annually over the next few years.
Travellers is looking forward to the completion of phase 3 of Resorts World Manila which will add well-known international hotel brands Hilton, Sheraton and Maxims by 2018.