With free cash flow rising from $US767 million to $US961 million, net debt of $US1. 3 billion and cash on hand of $US609 million, CSL has a lot of under-utilised balance sheet capacity which, instead of chasing growth by acquisition (which Perreault has previously said he’s not averse to), it has consistently used to buy back its capital – to the point where quite some time ago it had more than bought back its entire ordinary share contributed equity base.
CSL’s outlook is for more of the same, with the group saying it expects revenue growth of about 8 per cent this financial year, EBIT growth of about 15 per cent and after-tax profit growth of about 12 per cent, with the buy-backs leveraging earnings per share growth.
The business was managed tightly, acquisitions were few but strategic and company re-shaping and excess cash and balance sheet capacity – after continuing heavy investment in research and development — was handed back to shareholders through dividends and, more particularly, share buy-backs.
Read more here: Business Spectator