European company Rocket Internet has announced a share-buyback program. The company will be shelling out €150 million, to purchase somewhere around 3.6% of its outstanding stock.
The startup incubator had gone public in 2014 and has had a fluctuating trajectory since then. However, it seems it on its way to mark 2018 as its first profitable year. It reported a consolidated profit of €297 million ($347 million) in the first half.
Meanwhile, the buyback program begins today (September 20) and is slated to end by September next year.
Oliver Samwer, CEO, Rocket Internet, in an official statement, says,
We use our strong cash position also to further repurchase own shares. The share buy-back program underlines our aim to allocate capital most efficiently and to redeploy recent cash proceeds.
Rocket Internet’s gains have resulted from the IPOs of some of its key holdings which include meal kit provider HelloFresh, online food-delivery service Delivery Hero, and, online shopping company Home24. Rocket Internet’s shares have risen by 30 percent since the beginning of this year, facilitating a market capitalization of €4.2 billion.
Hellofresh has recorded a strong year-on-year growth of 41% to €615 million in H1 2018 and reduced losses significantly. While, Jumia, its African e-commerce group, witnessed an increase of 62 percent to €163 million euros in the gross merchandise value, i.e. the value of goods sold online, a decrease from 71 percent growth in the first quarter. Westwing, the company’s online furniture retailer, grew its revenue by 22% to €121 million. It also has plans to go public, as it had announced last week in Frankfurt.
The price of shares, €28 is still way behind the €42.5 peak it enjoyed four years ago. This naturally puts the company in a position to invest in some more companies and return some cash to its shareholders. Oliver is particularly looking forward to investing in up and coming domains such as fintech, software, artificial intelligence and, online marketplaces.