Australian Companies Like CSL Limited Choosing Buyback Options More Often
CSL Limited, the global, specialty biopharmaceutical company, is the latest in a string of companies to launch a buyback for its shareholders. This week it announced that the company would buy back $950 million of its shares. Recently both Telstra and Wesfarmers announced that they too are looking to return cash to their shareholders, offering up $1 billion in buyback opportunities each.
During financial year 2014, CSL reported revenues of US$5.2 billion, exponential higher than the last four years. In the past nine years, the company has opened up buybacks for shareholders eight times, returning close to a quarter of its shares to shareholders since 2005. By doing so, earns per share have been boosted by close to 20 percent in the past seven buybacks.
With stats like these, it’s no surprise that Australian companies have paid out nearly twice the dividends as the majority of other countries this year. What is a surprise is the trend existing to begin with, as the country continues to fall behind in growth in earnings per share, according to a report by Boston Consulting Group.
Critics believe that the continuation of this trend could slow down both corporate and economic growth in the long term. “The growth-versus-dividend debate in Australia has lost sight of the fact that growth is a prerequisite of sustainable dividend increases,” said Ramesh Karnani, BCG.
Just because CSL has offered buybacks so often, however, doesn’t mean the company is resting on its laurels. “Buybacks and acquisitions are not mutually exclusive,” said CSL. “We continually look for growth opportunities and should a suitable one arise, we do reserve the right to discontinue a buyback.”
Information sourced from the Financial Times.
Timeline: India takes unicorn leap with six in five days
We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.
April 5: Meesho
India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.
April 6: CRED
Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.
April 7: API Holdings / Groww
The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.
April 8: ShareChat
New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.
April 9: Gupshup
AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels.