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:
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Organic
Investment. Investment to enhance growth and
returns, including investment of £100m of capital in our
Semiconductor manufacturing capacity which is well
progressed.
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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.
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Inorganic
Investment. Complementary, disciplined M&A
focused on accelerating revenue growth opportunities in faster
growing markets.
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Additional
Returns. Additional returns of surplus capital
to shareholders as appropriate.
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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:
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Pete Raby, CEO
Richard Armitage, CFO
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Morgan Advanced Materials
plc
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01753 837000
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Nina
Coad
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Brunswick
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0207 404 5959
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