PENDRAGON PLC
SHARE BUYBACK PROGRAMME
The Company today announces it will commence an initial £20
million share buyback programme of its ordinary shares. The
Company has today entered into an agreement with Jefferies
International Limited (“Jefferies”) pursuant to which Jefferies
will implement that programme on behalf of the Company.
The Company’s board of directors (the “Board”) considered the
Group’s capital structure and capital allocation priorities with a
view to a return of surplus cash to shareholders. The Company has a
target range of 1.0 to 1.5 times net debt to underlying EBITDA and
is currently trading with financial leverage below this level. The
Board believes the Group will continue to generate strong cash
flows and, after assessing the capital needs of the business and
the current leverage position, has concluded that there is scope to
return surplus cash to shareholders. The Board believes a £20
million share buyback programme will increase capital efficiency
whilst ensuring the balance sheet remains strong, enabling the
Company to pursue its investment strategy and progressive dividend
policy.
Over the last two years, the Company has demonstrated a
disciplined approach to capital allocation. The
Company’s five year, £100 million investment programme, aimed at
expanding the Group’s UK national footprint over the next four
years, continues on plan. The Group has also spent a total of
£20.3 million in the last 18 months purchasing certain previously
leased properties occupied by the Group’ s businesses and the Board
continues to look for further acquisition opportunities. The Board
has evaluated many potential acquisitions. However, valuations
would not have delivered an acceptable level of return to justify
investment by the Company.
The Board will continue to pursue organic and acquisitive growth
and investment opportunities and evaluate them against the returns
generated via the share buyback programme. The buyback programme is
capable of being stopped and restarted and this flexibility will
enable the Company to pursue other, higher returning, capital
allocation opportunities if they arise. At the end of this
share buyback programme, the Board will evaluate whether a further
programme would be appropriate.
Any purchases pursuant to the share buyback programme will be
carried out within certain pre-determined parameters and in
accordance with the Listing Rules, other applicable law and the
limitations of buyback authority approved at the last Annual
General Meeting of shareholders. All shares purchased under the
programme will be cancelled.
Enquiries |
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Trevor Finn |
Chief Executive |
Pendragon PLC |
01623 725114 |
Tim Holden |
Finance Director |
Pendragon PLC |
01623 725114 |
Gordon
Simpson |
Partner |
Finsbury |
0207 2513801 |
Philip
Walters |
Principal |
Finsbury |
0207 2513801 |