The Qantas Group has announced an on-market buyback of AUD500 million Australian dollars (USD320 million) worth of shares after last week confirming a statutory after-tax profit of AUD1.74 billion (USD1.11 billion) for the 12 months to June 30, 2023. Qantas advised the Australian Stock Exchange (ASX) of the buyback in an August 23 filing.
In the most recent full financial year, to June 30, the Qantas Group bought back AUD600 million (USD384 million) ordinary shares from shareholders via on-market ASX trades. That campaign saw the Group buy 92,401,493 shares at a median price of AUD6.56 (USD4.20) per share. Qantas shares were trading at AUD6.24 (USD4.00) when the markets closed on August 25. Qantas Group CEO Alan Joyce called that buyback a "return to shareholders." ASX data reveals Qantas Group shares have traded between AUD4.76 (USD3.05) and AUD6.94 (USD4.44) over the last 12 months. During an earning call last week, Joyce said the upcoming buyback was possible because of the Group's strong balance sheet.
The next buyback will run between September 11, 2023, and June 28, 2024 - the majority of the current financial year. "Qantas is targeting a buyback of up to AUD500 million of its ordinary shares," the August 23 filing reads. "The buyback may consist of two tranches, the first being within Qantas' remaining 10/12 Limit under the Corporations Act, and the second being subject to shareholder approval at the 2023 AGM to exceed the 10/12 Limit. Qantas may, at its discretion, vary the size of the buyback, subject to certain restrictions, and also retains the discretion to purchase a lesser value of shares, or no shares at all."
Last week's financial results revealed the Qantas Group's net debt fell to AUD2.89 billion (USD1.85 billion) as of June 30. That is below the AUD3.7 billion (USD2.37 billion) to AUD4.6 billion (USD2.95 billion) target range and the AUD4.7 billion (USD3.01 billion) net debt level posted on June 30, 2019. As of 30 June 2023, the Qantas Group had liquidity sources of around AUD10 billion (USD6.4 billion), including AUD4.4 billion (USD2.82 billion) in cash and undrawn facilities, and AUD5.6 billion (USD3.59 billion) in unencumbered assets. "This is a remarkable turnaround, three years in the making - and it's been hard," said Joyce.
