Business
Commencement of Share Buyback Programme
Commencement of Share Buyback Programme.
About this update from Bunzl Plc
[{"type":"text","content":"\n\n27 August 2024\n \nTHREE-YEAR CAPITAL ALLOCATION COMMITMENT OF c.£700 MILLION ANNUALLY\nValue-accretive acquisitions to be supplemented by additional shareholder returns\n \nBunzl plc, the specialist international distribution and services group, remains committed to its capital allocation priorities which are: (1) to invest in the business to support organic growth and operational efficiencies; (2) to pay a progressive dividend; (3) to self-fund value accretive acquisitions; and (4) to distribute any excess cash.\n \nInvesting cash into the business to support organic growth and operational efficiencies remains our key priority. The Group also remains committed to ensuring sustainable dividend growth. Dividend cover in 2024 is expected to reduce to around 2.65 times, with further normalisation of dividend cover in 2025 to between 2.5 and 2.6 times in order to enhance returns for shareholders.\n \nThe strength of Bunzl's performance in recent years has resulted in low leverage1 compared to an adjusted net debt to EBITDA1 target of 2.0 to 2.5 times. This is despite a step change in the level of value-accretive acquisition spend in recent years, and the record committed spend already achieved in 2024. At 30 June 2024, the Group had an adjusted net debt2 balance of c.£1.7 billion, with an adjusted net debt to EBITDA1 ratio of 1.5 times. The Group is today committing to measures which are intended to steadily return it to its target leverage1 range by the end of 2027.\n \nAs a highly cash-generative business, Bunzl is expected to have significant capacity to continue its proven strategy of completing value-accretive acquisitions, and its acquisition pipeline remains active within the very large and fragmented global markets that it operates in. Aligned to Bunzl's disciplined capital allocation policy, and supported by strong free cash flow3 generation, Bunzl has today committed to allocate c.£700 million per annum, primarily to invest in value-accretive acquisitions and, if required, returns of capital, in each of the three years ending 31 December 2027. If at the end of each year, the total committed spend on value-accretive acquisitions is below £700 million, the Group will return the remainder to shareholders through a capital return in the following year.\n \nIn addition, and recognising the Gro...