Launches new share buyback programme

Ashtead Group PLC

02 May 2023

 

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER FOR SALE OF ANY SECURITIES OR AN OFFER OR INVITATION TO PURCHASE ANY SECURITIES IN ANY JURISDICTION OR A SOLICITATION OF ANY VOTE OR APPROVAL.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (DIRECTLY OR INDIRECTLY) IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

2 May 2023

Ashtead Group plc

Launches new share buyback programme of up to $500 million

Ashtead's existing share buyback programme, announced in April 2021, came to an end on Friday, 28 April 2023.   

The Group remains disciplined in its approach to allocation of capital with the overriding objective being to enhance shareholder value.  Our capital allocation framework remains unchanged and prioritises:

·     organic fleet growth;

-      same-stores;

-      greenfields;

·     bolt-on acquisitions; and

·     a progressive dividend with consideration to both profitability and cash generation that is sustainable through the cycle.

Additionally, we consider further returns to shareholders.  In this regard, we assess continuously our medium-term plans which take account of investment in the business, growth prospects, cash generation, net debt and leverage.  Therefore, the amount allocated to buybacks is simply driven by that which is available after organic growth, bolt-on M&A and dividends, whilst allowing us to operate within our 1.5 to 2.0 times target range for net debt to EBITDA pre IFRS 16.

At our Q3 results on 7 March 2023, the Group set out initial plans for gross capital expenditure in 2023/24 to be in the range of $4.0 - 4.4bn.  In addition, the Group continues to be acquisitive with a strong pipeline of potential acquisitions. 

In this context and subject to ongoing shareholder approval, the Group is announcing the launch of a new share buyback programme with an aggregate purchase price of up to $500 million over the period commencing the date hereof until 30 April 2024.   Because of the significant opportunities to deploy capital for growth detailed above, the Group intends to commence the programme at a relatively low level and to flex this amount taking into account such factors as the macro-economic backdrop, ongoing organic investment in the business, acquisition opportunities, cash generation, net debt and leverage. 

For the first tranche of this new programme, Ashtead has entered into an arrangement with Barclays Bank PLC, acting through its investment bank ("Barclays"). The arrangement allows Barclays to purchase, together with any other ordinary shares in the Company (the "Shares") purchased on the Company's behalf pursuant to this buyback programme, up to (a) prior to the expiration of the Company's current buyback authority granted by shareholder resolution dated 6 September 2022, 66,175,682 Shares; and (b) following such expiration, the aggregate number of Shares authorised to be purchased by the Company under any subsequent buyback authority granted during the arrangement (which in any event shall be less than 15% of the relevant class of the Company's equity shares at the date of such authority). These share purchases will be made on the Company's behalf and in accordance with the arrangement and, in the case of any purchases made during closed periods, shall be made independently of and uninfluenced by the Company.

Any share purchases effected pursuant to the arrangement will be subject to the terms of the arrangement with Barclays and in any case will be effected in a manner consistent with both the general authority vested in the Company to repurchase shares and Chapter 12 of the United Kingdom Listing Rules, which require that the maximum price paid be limited to be no more than the lower of (i) 105 per cent of the average middle market closing price of the Company's ordinary shares for the five business days before the purchase is made, and (ii) the higher of the price of the last independent trade and the highest current independent bid on the trading venue where the purchase is carried out. 

The sole purpose of these share purchases is to reduce the Company's share capital. 

Further enquiries:

Will Shaw	Ashtead Group plc	[phone]
Sam Cartwright	H/Advisors Maitland	[phone]

 

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