20th May 2016 06:26
LONDON (Alliance News) - Car dealer Pendragon PLC on Friday said it is to kick off a GBP20.0 million share buyback, to be run by Jefferies International Ltd, after concluding it had the capacity to return surplus cash to shareholders.
The FTSE 250-listed company said its board of directors has considered its capital structure and capital allocation policies with a view to returning surplus capital to shareholders. Pendragon said it has a target range of 1.0 to 1.5 times net debt to underlying earnings before interest, taxation, depreciation and amortisation and is currently trading below this level.
Pendragon said it believes it will continue to generate strong cash flows and, after assessing the capital needs of the business and its current leverage position, concluded there is scope to return cash to shareholders.
"The board believes a GBP20 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," Pendragon said in a statement.
By Sam Unsted; [email protected]; @SamUAtAlliance
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