Nevertheless, the market was overjoyed to hear yesterday that Billiton is seeking permission to buy in 10 per cent of its share capital, and pushed up the shares 11.5p to 138p.
In truth, the mining group has had a dismal time since it was spun off from the South African giant, Gencor, last year. The turmoil in the Asian economies has knocked commodity prices and the share prices of most mining firms. Matters were made worse for Billiton last month when a stockbroker bungled a large share placing.
According to the finance director, Mick Davies, the board reckons the shares offer good value at these levels. But should investors come to the same conclusion? Billiton's shares have fallen a long way.Its earnings and growth prospects have taken a serious knock, and so far there appears to be little sign that things are looking up.
To spend close to pounds 300m of newly-raised cash buying back 10 per cent of its share capital also shows a lack of imagination on Billiton's part. The company argues that the buyback will not restrict its ability to invest or make acquisitions. But its failure to deliver the deals it hinted at last summer - even though potential targets are rapidly becoming cheaper - is hardly encouraging.
Given that the actual buyback will have to wait until the Government clarifies its changes to advance corporation tax, the market may be getting overexcited. But Billiton has highlighted the value in its shares. Even after yesterday's rise, they now trade on a forward multiple of less than 10 times June 1999 earnings. Good value.