… companies that state that they intend to buy back their shares. that is no commitment to do it. It’s just if the board of directors feels that the share price is abnormally low which tends to happen in our environment because its so illiquid number one and then number 2 your share price can be determined by 1000 shares being sold to get some Xmas money and its not based on fundamentals. So given the illiquidity of the market your share price can be severely depressed because there’s just not much trades going on and you get one person who needs to pay off a bill or … and they sell 1000 shares and that drives your price to an unreasonably low amount.
and at that time the Board felt it would be prudent for us to step in and take advantage low price and buy back the shares for two reasons
number one it will maintain shareholder value and number two it will increase our earnings per share.(You have less shares)And we think that that is a good way to protect shareholder value by announcing that we are going to step into the market when we think the share has been unnecessarily driven to a level that we think is just too low. At a dollar per share we feel that its significantly undervalued.
You have to borrow money at current prevailing rates. Most people borrow between 7 and 8%so you could assume that that’s the rate at which we would borrow.
the cost of money is 7 to 8 percent. But we would prefer not to have to buy shares. We would prefer for the market to take it to where itneeds to be. We are baciscally lookingg at this as a sort of,”if for whatever reasons there is no?activity?and the price as a result of that activity is not where it should be then we will step in. NOw there are a number of companies that do that now. Cable Bahamas has it, Commonwealth Bank has it it. It’s not somethign new or novel. Basically what your doing is given the illiquidity of the market and given that a large portion of our shareholders are in it for the long haul and don’t necessarily want to trade their shares–now there’s not that many shares that trade and when you’ve got someone who’s got 1000 shares at the bottom and who wants to get rid of it and get$1000 for Xmas or birthday or w/e, then that drives the price down where it need not be and we will step in .. and were basically telling our shareholders if it ever get down to that level then ……….
I don’t know how it’s going to pan out.
In order to announce a share buy-back you have to give general guidelines. That’s a BISX rule. soyou have to say generally how much you’re going to buy and over what kind of period. Now you can always change it. you can always increase it decrease it, w/e. you have to provide those guidelines so the market would know and people who are looking at our shares would say, well they’re making an effort to reduce the amount of shares outstanding.
I would pay very little attention to the time period and very little attention to the amount of shares.
“The vast majority of Bahamians do not participate int he buying and selling of shares … i would say 95%of Bahmians, even higher. Most invest in real estate or fixed deposits. Third vehicle may insurance. We are still very old fashioned in the way we invest. In the Uunited States most people invest for capital gains … I buy my share at a dollar I want it to go to$1.50 then i ga sell, that’s the reason I’m buying it. Most peeople in this jurisdiction treat a share like a fixed deposit. they want their dividend every quarter and when they don’t get the dividend, tehy like, well I ain’into this. So it iss more of a mindset or more of a cultural impediment. People just don’t buy shares.
Bahamians hate the uncertainty of a return, and shares represent an uncertainty in return.
not concerned about any takeover attempts.’Theres a lot of shares to buy, that’s a lot of money to come up and you may expend a lot of money and not quite get control. So are you prepared to do that?It very rarely happens. You have such a wide and diverse shareholder base it would take a lot to do that.”
“I think from time to time people will look at our stock and see if their is an opportunity to take advantage of,
people express an interest, anyone can express an interest, but the mechanics of it are quite difficult. In addition to that we hear rumblings every now and then and our reaction, the fact that we are attempting to buy the shares I think I can say without fear of contradiction, we have tossed around in our boardroom for well over 2 years now.
so this is something we’ve talked about for a long time and we saw that this was the best time to do it.
I hear a lot of rumors in the marketplace. I hear that City Markets wants to buy Robin Hood, is in bed with Phil’s, wants to buy us, I hear all these rumors but i think City Markets is a company that is in distress and is going to require a substantial amount of focus and attention to turn it around and i think if they were looking at acquiring additional companies my advise would be cut your teeth on City Market and then come looking.”
not easy to run a companyor a foodstore
a lot of staff, products, ordering, logistics, merchandising , its’a tough business and it takes a while to master and i think the managers of AML foods has figured it out ubt it took a long time and we were in the red for a long time.
look at jr roberts he’s been in the business his whole life
“Its a tough business to get right but once you get it right you do alright. that’s Where we are now.”
AML has no debt. I hink that once we start to to ckle the interst of everybody then market will take over and we will just be the catalyst to create some activity in our stock. And I don’t think the need will arise for us to go out and buy any more than what we say we’re going to buy.
given our current cash flow and given the fact that we have not debt we’re in a very comfortable position to easily do both if we have to. we prefer for the market to do it and allow us to direct our resources elsewhere but we have a duel function. one is to generate profits and the other is to maintian shareholder value, and we feel thaty they can go hand-in hand.
by making the business run good we generate the profits but sometimes giving the illiquidity and the state of the Bisx and the market you have to go in and create an additional catalyst to make your share be where it needs to be.