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SINGAPORE - Premium Catering (Holdings) Limited (NASDAQ:PC), a micro-cap food service company with a market capitalization of $20.85 million, announced Thursday that its Board of Directors has authorized a share repurchase program for up to $1.0 million of the company’s ordinary shares. According to InvestingPro analysis, the stock is currently trading above its Fair Value.
The Singapore-based Halal food caterer, which specializes in Indian, Bangladesh and Chinese cuisine, may execute the repurchases through open market purchases, block trades, or privately negotiated transactions. The company stated that open market repurchases will comply with federal securities laws, including the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934.
"This repurchase authorization underscores the Board and Management’s belief that at times our share price may be undervalued relative to our long-term opportunity," said Yu Chun Yin, an Executive Director, according to the press release. This comes as the company’s stock has declined by nearly 81% over the past year, though InvestingPro data shows the company maintains a healthy current ratio of 2.22, indicating strong short-term liquidity. InvestingPro subscribers have access to 10 additional key insights about Premium Catering’s financial health and market position.
The program has no time limit and does not obligate the company to repurchase any specific amount of common stock. Premium Catering expects to fund the repurchases from existing cash and cash equivalents and/or future cash flows.
The volume, timing, and manner of any repurchases will be determined at the company’s discretion, subject to market conditions and other factors. The program may be modified, suspended, or discontinued at any time without notice.
Premium Catering primarily supplies budget prepared meals to foreign construction workers in Singapore and has been operating in the catering services industry for over 11 years. The company also operates food stalls, provides buffet catering services, and offers ancillary delivery services. Recent financial data shows the company faces challenges with negative EBITDA of $1.79 million in the last twelve months, highlighting the importance of strategic capital allocation decisions.
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