6th Dec 2006 07:01
Stagecoach Group PLC06 December 2006 Stagecoach Group plc6 December 2006 Proposed return of value to shareholders of not less than £400m Stagecoach Group plc ("the Group") is pleased to announce its intention toreturn value of not less than £400m to its shareholders. The Group's Board of Directors ("the Board") has reviewed the Group's capitalstructure in light of a number of factors, including: • the disposal by the Group of its New Zealand business in November 2005 and its London bus business in August 2006;• continued strong cash generation by the Group and; • a significant reduction in the Group's net debt, partly as a result of the above factors. The Group has reported consolidated net funds (i.e. cash in excess of borrowings as defined by UK GAAP) of £140.9m as at 31 October 2006. As a result of this review, the Board believes that in order to ensure the Grouphas an efficient and appropriate capital structure, a return of value should bemade to shareholders. In deciding the amount of value to be returned to shareholders, the Board hastaken account of: • the Group's strategy to focus on organic growth and potential bolt-on acquisitions in its UK and North American bus operations, and to target opportunities to expand its rail portfolio;• the ongoing capital requirements of the Group and;• the Group's progressive dividend policy. Working in close consultation with our employees, trade union representativesand pension scheme trustees, the Group has already made substantive progress inreducing the pension deficit and to secure the accrued benefits for the currentmembers of the Group's main pension scheme, the Stagecoach Group Pension Scheme("the Pension Scheme"). The Group has also reached agreement in principle withthe trustees of the Pension Scheme for plans to make a further one-off cashcontribution of up to £50m to the scheme as part of an agreed funding plan. Subject to shareholder and other approvals, the Board expects the proposedreturn of value and contribution to the Pension Scheme to occur by 30 June 2007.Funding for the proposed return of value and contribution to the Pension Schemeis expected to come from the Group's existing cash resources and bankfacilities. The return of value is likely to be structured such that shareholders willparticipate pro-rata to their ordinary shareholdings. It is also expected thatthe ordinary shares would be consolidated such that the number of ordinaryshares held by each shareholder would be reduced to reflect the significantreturn of value on those shares. The Board does not intend that the return of value will affect the level ofdividends per ordinary share or the Group's progressive dividend policy. Stagecoach Group Chairman, Robert Speirs, said: "The Group's strong financialposition and positive outlook has enabled us to announce plans to returnsignificant value to our shareholders. As well as optimising our capitalstructure and enhancing value to investors, our plans should ensure we continueto invest in the business, maintain our progressive dividend policy and have theflexibility to take advantage of future growth opportunities. The Board will continue to monitor the Group's capital structure and consideropportunities to enhance shareholder value on an ongoing basis." Further details of the proposed return of value will be announced in due course. The Group has separately announced today its interim results for the six monthsended 31 October 2006. CONTACTS: Telephone Media enquiriesStagecoach Group plcMartin Griffiths, Finance Director 01738 442 111Steven Stewart, Head of Media & Public Affairs 01738 442 111SmithfieldJohn Kiely 020 7360 4900 Institutional shareholder enquiriesStagecoach Group plcMartin Griffiths, Finance Director 01738 442 111 Individual shareholder enquiriesStagecoach Group plcGroup Administration Department 01738 442 111 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
SGC.L