Calian shareholder Plantro concerned about buyback

Executive Summary

• Plantro Ltd., a shareholder holding more than 5% of Calian Group Ltd., publicly expressed concern over Calian's announcement of a new normal course issuer bid (NCIB) to repurchase up to 10% of the public float.
• Plantro argues that Calian is prioritizing financial engineering and share price support over capital investment in a significant growth opportunity within the Canadian defense sector, driven by increased NATO and federal government spending commitments.
• The shareholder highlights that Calian's Information Technology and Cyber Solutions (ITCS) business declined 10% last quarter, dragging down overall performance, while the rest of the business saw 9% revenue growth and 10% adjusted EBITDA growth.

Key Details

• Shareholder Position: Plantro Ltd. owns more than 5% of Calian Group Ltd.
• Calian's Action: Announced a new normal course issuer bid (NCIB) to repurchase up to 10% of the public float of its stock.
• Plantro's Critique:
  • Believes Calian is missing a "once-in-a-generation growth opportunity" in defense spending.
  • Accuses management of using limited capital for financial engineering rather than growth.
  • Questions the board's ability to allocate capital effectively and focus on share undervaluation drivers.
• Financial Performance Metrics Cited by Plantro:
  • ITCS (Information Technology and Cyber Solutions) business: Down 10% last quarter.
  • Non-ITCS Business: Delivered 9% revenue growth.
  • Non-ITCS Business: Delivered 10% adjusted EBITDA growth.
• Call to Action: Plantro urges Calian to engage in constructive dialogue to unlock value for all shareholders.

Notable Quotes

• "Plantro, like many of the company's other shareholders, believes Calian has before it a once-in-a-generation growth opportunity, given the accelerated commitments by the Canadian federal government and other North Atlantic Treaty Organization countries to substantially increase defence spending."
• "However, instead of prioritizing on this imminent opportunity to invest in Canada's defence sector... Calian's board and management appear more interested in financial engineering to prop up its share price using its already limited capital."
• "Calian's lack of focus is hurting performance. The company's information technology and cyber solutions business was down 10 per cent last quarter and remains a persistent distraction for management."