The board of Fruitas, which operates nearly 1,000 stalls and the Ling Nam restaurants, announced the approval of a P100-million buyback that will run for at least a year.
Stock buybacks strengthen share prices by reducing outstanding shares from the market. This raises earnings per share, increasing its perceived value.
Fruitas, which also owns listed Balai Ni Fruitas, saw its share price surge as much as 18.3 percent on Tuesday morning. It was trading about P0.68 apiece, up 13.33 percent, as of this writing.
Fruitas can repurchase about 163.93 million shares at the price before the announcement. This accounts for about 7.7 percent of its total outstanding shares.
Management's view
“This share repurchase initiative reaffirms our confidence in Fruitas Holdings’ sustained growth and our unwavering dedication to maximizing shareholder value,” Yu, the founder, president, and CEO of Fruitas, told InsiderPH.
“By buying back shares, we are also able to return a greater portion of capital to our shareholders,” he added.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.