Instead, Telstra issued a short press release saying: "Telstra. expected excess free cash of $2 to 3 billion over the next three years... [and] confirmed the priorities of its capital management strategy are to maximise returns for shareholders, maintain financial strength and retain financial flexibility."
CEO David Thodey told the briefing that Telstra was making no change to guidance for the 2012 financial year and reinforced the company's intention to pay a 28 cent per share fully franked dividend in 2012 and 2013.
CFO Andy Penn explained why there would be no share buyback. He told the briefing: "Our preference for returning capital to shareholders is via growth in franked dividends but we do not expect to have the franking capacity to increase the dividend before 2014.
"An alternative is an on market share buyback...[But] at the current level of our excess capital today we do not believe that on market buyback would be of a magnitude to be meaningful... We will update the market at our annual results announcement in August."
Thodey said: "Any buyback must be significant enough to create value for shareholders. But I think that can get lost in the desire to see buybacks. We have seen many buybacks in the industry that have made no difference to the share price, or to shareholders.
'So if you are going to do it you have to make it consistent enough and significant enough. Once we have the cash we can make that decision.
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