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Brian Joffe’s investment group, Long4Life, which said recently it saw no better use for its cash than buying back its heavily discounted shares, wants permission from shareholders to start buying backs from the start of its new financial year.
The group said on Monday that in the interest of “maximum flexibility” it would rather have permission to buyback shares for its 2022 year from March rather than wait for shareholder approval at its AGM, which is scheduled for July. On Monday it gave notice of a special general meeting scheduled for February 16.
JSE rules prohibit companies from buying back more than 20% of their issued share capital in aggregate in any given financial year.
Joffe had said in October that the group had no acquisitions on the horizon that would be a better use of the group’s then R821m cash pile than buybacks, lamenting the hefty discount to which Long4Life’s shares trade.
Long4Life, the owner of beauty chain Sorbet and Chill Beverages, reported a net asset value per share of 627c at the end of August, the end of its 2021 half year, with its share trading at about a 50% discount at the time.
Investment holding companies often trade at a discount to the value of their underlying assets, with analysts often citing general market concerns about the efficiency of holding structures.
In December Long4Life announced that after JSE permission it had cancelled 50,401,801 Treasury shares, or 5.87% of its shares in issue before cancellation. This followed its latest buyback in December, when it spent R147.9m buying back about 35-million shares.
On Monday morning the group had about 768-million shares, valued at R3bn.
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