REG - Morgan Adv.Materials - Commencement of Share Buyback Programme

Morgan Advanced MaterialsAnnouncement

05/11/2024 07:00

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RNS Number : 8970K  Morgan Advanced Materials PLC  05 November 2024

5 November 2024

Morgan Advanced Materials PLC

("Morgan Advanced Materials" or the "Company")

 

Commencement of Share Buyback Programme

Morgan Advanced Materials is pleased to announce the commencement of a share
buyback programme (the "Buyback Programme") with effect from 5 November 2024,
to return up to a maximum of £40 million (excluding expenses) of capital to
shareholders.

Rationale for Buyback Programme

The Buyback Programme reflects the Company's strong balance sheet as well as
the Board's continued confidence in its future prospects. The Buyback
Programme is consistent with the Company's capital allocation framework, which
was set out at the April 2024 capital markets event and is as follows:

 ·         Organic Investment. Investment to enhance growth and returns, including
           investment of £100m of capital in our Semiconductor manufacturing capacity
           which is well progressed.
 ·         Regular Returns via a Progressive Dividend Policy. Grow the regular dividend
           through the cycle targeting a dividend cover of c.2.5x over the medium term.
 ·         Inorganic Investment. Complementary, disciplined M&A focused on
           accelerating revenue growth opportunities in faster growing markets.
 ·         Additional Returns. Additional returns of surplus capital to shareholders as
           appropriate.

The Company continues to review and evaluate M&A opportunities but remains
disciplined on finding the right targets that have a strong strategic fit and
financial rationale.

In the context of the strong balance sheet position, the Board believes a
share buyback to be an attractive use of capital to drive shareholder value
alongside the significant ongoing organic investment. The Company continues to
target through the cycle leverage range of 1.0x to 1.5x net debt to adjusted
EBITDA excluding M&A and expects to remain within this range during 2025.

The purpose of the Buyback Programme is to reduce the Company's share capital
and it is expected that implementation of the Buyback Programme will increase
earnings per share.  Any Shares purchased pursuant to the Buyback Programme
will be cancelled.

The first tranche of the Buyback Programme will be for up to a maximum of £10
million (excluding expenses), as set out further below. The Company views
share buybacks as an attractive element of shareholder returns and will
consider options for further returns at the time of the announcement of the
preliminary results for the year ending 31 December 2024, in line with our
capital allocation policy.

Commenting on the Buyback Programme, Chief Executive Officer, Pete Raby said:

"Our strong prospects and balance sheet have enabled us to increase returns to
shareholders by supplementing our regular dividend with the launch of this
share buyback programme. Alongside our investments to enhance both organic
growth and cost rationalisation, the share buyback is further evidence of the
attractive capital allocation options at the group's disposal."

Details of Tranche 1 of the Buyback Programme

Morgan Advanced Materials announces that, pursuant to the first tranche of its
Buyback Programme ("Tranche 1"), it has entered into an irrevocable,
non-discretionary agreement with Investec Bank plc ("Investec"), acting as
riskless principal, to enable the Company to purchase up to £10 million
(excluding expenses) of the Company's ordinary shares of 25 pence each (the
"Shares"). Under the terms of the agreement, Investec will  make its trading
decisions independently of and uninfluenced by the Company in accordance with
certain pre-set parameters. Any repurchases of Shares by the Company pursuant
to Tranche 1 will be carried out on the London Stock Exchange and/or other
recognised investment exchange(s). Tranche 1 will commence today and end no
later than 31 March 2025.

Any purchases of Shares effected pursuant to Tranche 1 will be subject to the
terms of the agreement with Investec and in accordance with (and subject to
the limits prescribed by) the Company's general authority to repurchase Shares
granted by shareholders at the Company's 2024 Annual General Meeting on 9 May
2024. Tranche 1 will be conducted in accordance with the Market Abuse
Regulation (EU) No 596/2014 (as it forms part of UK domestic law and as
amended by the Market Abuse (Amendment) (EU Exit) Regulations 2019), the
Commission Delegated Regulation (EU) 2016/1052 (as it forms part of UK
domestic law and as amended by the FCA's Technical Standards (Market Abuse
Regulation) (EU Exit) Instrument 2019) and Chapter 9 of the UK Listing
Rules.

Any repurchase of Shares will be announced no later than 7:30 am on the
business day following the calendar day on which the repurchase occurred. The
maximum number of Shares that can be purchased under Tranche 1 is 28,536,998.

Any further tranches of the Buyback Programme, which may be conducted after
completion of Tranche 1, will be announced in due course. There is no
guarantee that the Buyback Programme will be implemented in full or that any
Shares will be repurchased by the Company. The Buyback Programme will not
impact the Company's existing Share dividend policy, which will continue
unaffected through the regular awards of interim and final dividends.

At the time of this announcement, the Company's share capital comprises
285,369,988 Ordinary Shares with voting rights and 437,281 cumulative
preference shares with no voting rights, save in specified limited
circumstances. The total number of voting rights in the Company is therefore
285,369,988.

 

For further enquiries:

 Pete Raby, CEO                   Morgan Advanced Materials plc                                01753 837000

 Richard Armitage, CFO

 Nina Coad                        Brunswick                                                    0207 404 5959

 

 

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