Projected FY 2021-22 and Final dividends, page-24

A buyback creates value when the cost of buying the share back for the company is far less than the fair estimate of its value when you look at a company’s future dividend or earnings streams . Whc definitely falls in this category as it’s trading on a P/E ratio of probably under 2-3 times forward earnings at present , which is insane , so the market is not valuing it correctly in short . The whole green lunacy that infects most of the world today is at play here . This share on fundamentals alone should already be at 10 dollars plus , it’s not because of the said green politics at play infecting and biasing peoples valuations of many larger institutions . The boundaries of rational thought and analysis stop once you start talking coal stocks .

So if the marginal seller in the market is willing to give up their shares for well under fair value , then really what happens in the long run with a buyback is the denominator of shares issued goes down via the buying back , which actually drives up the value of each remaining share more , so if executed properly it becomes a wealth transfer from the impatient to the patient ………. Where have I heard that before , that’s right a mr Buffett has said this many times when discussing investing .

This is why I hope they will continue buying back shares , not because I have any intention of selling and realising a 50% cgt saving . Rather I am more interested in the value of each slice in the company going up which is what a buyback does and then over time that also means a higher dividend per share as your net profit has less shares to be spread over , for those who remain for the long term too .

As long as the market continues to be idiotic and fundamentally mis price the shares , and also provided we don’t need the funds for capex , which we don’t at present I say keeping buying back , the price will only go one way if these profits persist and that is up .