REG - System1 Group PLC - Distribution policy

System1Announcement

22/06/2022 07:00

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RNS Number : 7038P  System1 Group PLC  22 June 2022

System1 Group PLC (AIM: SYS1)

("System1", or "the Company", or "the Group")

 

22 June 2022

 

 Distribution policy

 

System1 Group plc (AIM: SYS1) today announces an update on its distribution
policy to shareholders.

 

Prior to the outbreak of Covid in early 2020, System1 had a policy of paying
dividends to shareholders, and dividends for the year ended 31 March 2019
totalled 7.5 pence per share (£0.9 m).

 

In April 2020, in response to the outbreak of Covid-19 the Company suspended
both a proposed buyback programme for £1.5m of System1 shares as well as a
final dividend for the year ended 31 March 2020 after having paid a 1.1p
interim dividend totalling £0.1m.

 

During the Covid period the Company maintained a strong balance sheet with
significant levels of cash to enable the business to weather the impact of
Covid on the business and to continue to invest as required.   No dividends
were paid for the year ended 31 March 2021.

 

During the first quarter of 2022, with Covid in the rear-view mirror, the
Company spent £0.6m undertaking a share buyback programme and the net cash
balance at end March 2022 was a healthy £8.7m.

 

The Board has now conducted a wider review of its capital allocation
priorities and considered the Company's near-term cash needs and its dividend
policy.

 

Following this review, and taking into consideration feedback from certain
shareholders, the Board has decided to pay annual distributions to
shareholders by way of on market share buyback or tender offer, rather than by
way of a dividend. The Board has concluded that the distribution policy will
be progressive, taking into account underlying business performance.  It is
expected that the absolute level of distribution for the year end 31 March
2023 will be between 30 - 40% of through-the-cycle profit after tax. The Board
is comfortable that this policy will support continued investment in the
business, provide funds for potential in-fill acquisitions to supplement
organic growth and will deliver returns to shareholders.

 

In addition to the above distribution policy, reflecting the strong cash
position of the Group, the Board has decided to undertake an additional return
of capital. The Board believes that a strong balance sheet and positive net
cash are appropriate for the Company. At the same time, the Board considers
that the Company has cash at levels above its through-the-cycle and near-term
requirements and will therefore seek to return up to £1.5m of excess cash by
way of a tender offer at the earliest opportunity after the Company has
published its report and accounts for the year ended 31 March 2022 on 12 July.
Further information will be provided in due course.

 

 

For further information, please contact:

 System1 Group PLC                        Tel: +44 (0)20 7043 1000
 John Kearon, Founder & CEO
 Chris Willford, Chief Financial Officer

 Canaccord Genuity Limited                Tel: +44 (0)20 7523 8000
 Simon Bridges / Andrew Potts

 

The Company can be found at www.system1group.com
(http://www.system1group.com/) .

This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication
of this announcement, this information is now considered to be in the public
domain.

 

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