Developer Sunland cans share buyback plan over market volatility caused by COVID-19

Sunland says market volatility is behind its latest move to axe an ambitious plan.

DEVELOPER Sunland has canned an offmarket share buyback scheme due to market volatility caused by coronavirus.

The Brisbane-based company released a statement to the ASX this morning that said rapidly deteriorating macroeconomic conditions has made it “difficult to reliably predict future activity”.

“The Group is taking decisive action to proactively manage the business through this period and ensure it remains well positioned for when conditions stabilise,” the statement reads.

The company said it remains in a strong position with sufficient working capital and cashflow from settlement of property sales.

Sunland is taking a cautious approach to market conditions, including putting development sites to the market such as one slated for a tower on Marine Pde, Labrador (artist impression included).

“To help maintain this position in the face of current conditions and uncertainty, the Board has decided to cancel the offmarket buyback announced in February 2020.”

Sunland announced last month it would ask shareholders in April for approval for an offmarket share buyback of up to 25 per cent of the company’s issued share capital.

It said at the time it would use funds generated by asset sales for the buyback, which was because the “inherent value in the business is not being recognised by the market with the share price persisting well below the value of group net tangible assets”.

The buyback would be worth up to $60 million and followed the company buying back 4.1 million shares last year for $6.5 million.