South Africa-based MMI Holdings Ltd. plans to buy back 2 billion South African rand worth of shares over the next 12 months, in lieu of paying a dividend.
MMI's diluted core headline earnings for the six months to Dec. 31, 2017, stood at 1.6 billion rand, down 3% year over year. The company said it had a capital buffer of 4.1 billion rand as of the end of 2017.
MMI Financial Director Risto Ketola said the company's current discount to embedded value means that a share buyback is a more efficient use of capital than paying a dividend. The company will target a dividend cover range of around 2.5x core headline earnings in the future, up from a previous target to 1.5x to 1.7x core headline earnings.
MMI has a market capitalization of 34.55 billion rand and a total enterprise value of 46.62 billion rand, according to S&P Global Market Intelligence data. It has 1.56 billion shares in issue and closed at 22.15 rand per share March 6.
As of March 6, US$1 was equivalent to 11.79 South African rand.
