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Light & Wonder’s board has approved a new three-year share buyback programme, authorising up to $1bn in common stock repurchases.

The new programme, which will run until 12 June 2027, comes on the heels of a successful prior initiative, which allowed the company to repurchase up to $750m of its common shares and was set to expire in February 2025.

However, Light & Wonder has already fully utilised the $750m authorisation, purchasing 11.2 million common shares, representing 11.5% of shares outstanding at the start of the programme.

The average purchase price was $66.72 per share, reflecting a 28% discount to yesterday’s (13 June) closing price of $92.35.

“Effective value creation tool”

Light & Wonder’s recent stock performance has been robust, with a 15.47% gain over the past six months and a 41.51% increase over the past year.

CEO Matt Wilson (pictured) expressed his satisfaction with the board’s decision to approve “a new, upsized” share repurchase programme as the business continues to execute its growth strategy and “return meaningful capital” to its shareholders.

“With strong operating performance continuing across the business, we remain on track to achieve our $1.4bn consolidated AEBITDA target for 2025 while continuing to invest for the future,” Wilson said.

CFO Oliver Chow highlighted the company’s solid financial footing, noting: “Given the continued momentum in the business, and our 31 March 2024 net debt leverage ratio at the middle of our target range of 2.5x – 3.5x, we have significant optionality with regards to capital allocation.

“Our prior programme was an effective value creation tool and moving forward the new programme will allow us to deliver further value to our shareholders while underscoring our commitment to driving profitable growth and upside beyond 2025.”

The timing and amount of repurchases will be determined by the company based on market conditions, share price and other factors, including potential opportunities for inorganic growth.

Repurchases may occur in the open market or through private transactions, subject to market conditions and legal requirements.

Light & Wonder is not obliged to repurchase shares, and the programme may be suspended or discontinued at any time.

Q1 2024 success

In Q1 2024, Light & Wonder reported a 13% year-on-year revenue increase to $756m, marking the supplier’s 12th consecutive quarter of year-on-year growth.

This performance was driven by strong results across all lines of business.

Consolidated adjusted EBITDA also grew by 13% to $281m compared to the prior year period, resulting in a margin of 37% for the quarter.

CEO Wilson reaffirmed the company’s commitment to creating shareholder value; however, when queried regarding potential M&A activity, Wilson said: “We want to be the leading cross-platform global games company.

“And we’ll look and evaluate every M&A target that supports that mission and vision, but we’re not in a hurry to go and put a huge amount of complexity back into the portfolio.”

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