CARMILA's Strategic Share Buyback: A Play for Long-Term Growth?

Investors, listen up! Today we’re diving into CARMILA, the European commercial real estate powerhouse, and its recent moves in the stock market. This company, which manages over 250 shopping centers across France, Spain, and Italy, is making a bold play with its share buyback program—and it’s all tied to its 2022 free share allocation plan. Let’s break down why this matters and whether it’s a buy or a sell.

The Buyback Play: Aligning Interests, Retaining Talent

CARMILA’s latest move is part of its ongoing strategy to incentivize employees and managers by aligning their interests with shareholders. On March 18, 2025, the company announced a cash buyback of 185,000 shares, earmarked for its 2022 free share allocation plan. This isn’t just a paperwork shuffle—these shares will directly reward key personnel, locking in talent to drive long-term value.

But here’s the kicker: CARMILA isn’t stopping there. In February 2025, it also launched a separate €10 million buyback program with a June 30 deadline. Shares bought here will be canceled, not just held, which reduces the total float and could boost per-share metrics like earnings. For a company with a €6.7 billion portfolio, this shows serious capital discipline.

Note: If the data shows a rising trend, this buyback activity could amplify investor confidence. If stagnant, it may signal a value opportunity.

Dividends and the Dividend Policy: A Steady Hand

CARMILA’s 2024 dividend of €1.25 per share (a 4.2% increase from 2023) is no accident. The company has a clear policy: pay at least €1.00 annually through 2026, targeting a 75% payout ratio of recurring earnings. That’s a solid dividend yield for income-focused investors. But here’s the catch: the dividend must survive shareholder approval at its May 14 AGM. If approved, it’ll be the fourth straight year of hikes—a rarity in a volatile market.

Risks on the Radar

No free lunch here. CARMILA’s fortunes are tied to Europe’s economy, and its portfolio is concentrated in shopping centers near Carrefour stores. If e-commerce crushes foot traffic or inflation stifles consumer spending, occupancy rates could drop. Plus, the company’s reliance on the French SIIC tax regime means any regulatory changes could upend its financial model.

The fine print? CARMILA’s Universal Registration Document lists risks like interest rate hikes, tenant defaults, and geopolitical instability. And let’s not forget: they’ve disclaimed any obligation to update forward-looking statements. In other words, past performance doesn’t guarantee future returns.

The Bottom Line: A Buy for the Long Haul?

Here’s why I’m cautiously bullish:
- Talent Retention: The 2022 free share plan is a smart move to keep top performers. Aligning their pay with shareholder value is a win-win.
- Capital Allocation: Canceling shares reduces dilution and boosts EPS. The €10 million buyback shows management isn’t sitting on cash.
- Dividend Strength: A 75% payout ratio leaves room for reinvestment while rewarding shareholders.

But investors must weigh the risks. If European real estate softens, CARM’s valuation could take a hit. Still, with a SBF 120 listing and a €6.7B portfolio, this is a blue-chip play in a niche sector.

Final Verdict

CARMILA’s buyback and dividend strategy is a calculated bet on its long-term dominance in European retail real estate. While macroeconomic headwinds loom, the company’s focus on aligning incentives and shareholder returns makes it a compelling hold—if not a buy—for investors willing to ride out volatility.

Final Takeaway: CARM could be a “Buy” for those with a 3-5 year horizon, but keep a close eye on its May AGM dividend vote and the European retail sector’s health. This isn’t a get-rich-quick stock—unless Europe’s shopping centers stage a comeback.

Data as of December 31, 2024. Past performance does not guarantee future results. Consult your financial advisor before making investment decisions.