PhilWeb to launch share buy-back program to lift price of stock

MANILA, Philippines—Gaming firm PhilWeb Corp. is launching a share buy-back program to lift the price of its stock, which according to management still trades below its “intrinsic value.”

The company’s board on Thursday delegated the timing, the acquisition prices and other terms of the buyback to PhilWeb’s management.

The announcement pushed PhilWeb shares up 3.17 percent to close at P13 at the end of Thursday’s trading.

“The company currently has excess and unallocated cash, which is on placement with the banks at very low interest rates,” PhilWeb told the local bourse.

“Since the company has available unrestricted retained earnings and its stock is currently trading at such low levels, the company’s board of directors decided to take advantage of the opportunity to buy shares from the open market at prevailing prices,” the disclosure read.

Despite its surge on Thursday, PhilWeb shares are still trading well below its 52-week high of P17.88 each. Its current share price is closer to its one-year low of P12.10.

The company has 1.51 billion outstanding shares, giving the company a market capitalization of P19.07 billion.

Earlier this month, PhilWeb reported a robust increase in earnings for the first nine months of 2012 due to what it said were strong results from its e-Games cafes nationwide.

In a statement, the gaming firm, with operations around the region, said its net income during the January-September period increased by 24 percent to P681 million from the same period in 2011.

“The performance was driven by excellent results from the company’s operations, primarily in the e-Games cafes or PEGS that it operates for the (state-owned) Philippine Amusement and Gaming Corp.,” company president Dennis Valdes said.

The fastest growth was delivered by PhilWeb’s Asia-Pacific subsidiary, which operates scratch-card businesses in Cambodia and Timor Leste and a Sweeps Center in Guam.

The Asia-Pacific region contributes 8 percent of total revenues, which drove the firm’s consolidated total revenue to P1.08 billion, or 30 percent higher than a year ago.