PENDRAGON PLC - Share Buyback Programme

PENDRAGON PLC SHARE BUYBACK PROGRAMME

The Company today announces it will commence an initial £20 million share buyback programme of its ordinary shares.  The Company has today entered into an agreement with Jefferies International Limited (“Jefferies”) pursuant to which Jefferies will implement that programme on behalf of the Company.

The Company’s board of directors (the “Board”) considered the Group’s capital structure and capital allocation priorities with a view to a return of surplus cash to shareholders. The Company has a target range of 1.0 to 1.5 times net debt to underlying EBITDA and is currently trading with financial leverage below this level. The Board believes the Group will continue to generate strong cash flows and, after assessing the capital needs of the business and the current leverage position, has concluded that there is scope to return surplus cash to shareholders. The Board believes a £20 million share buyback programme will increase capital efficiency whilst ensuring the balance sheet remains strong, enabling the Company to pursue its investment strategy and progressive dividend policy.

Over the last two years, the Company has demonstrated a disciplined approach to capital allocation.   The Company’s five year, £100 million investment programme, aimed at expanding the Group’s UK national footprint over the next four years, continues on plan.  The Group has also spent a total of £20.3 million in the last 18 months purchasing certain previously leased properties occupied by the Group’ s businesses and the Board continues to look for further acquisition opportunities. The Board has evaluated many potential acquisitions. However, valuations would not have delivered an acceptable level of return to justify investment by the Company.

The Board will continue to pursue organic and acquisitive growth and investment opportunities and evaluate them against the returns generated via the share buyback programme. The buyback programme is capable of being stopped and restarted and this flexibility will enable the Company to pursue other, higher returning, capital allocation opportunities if they arise.  At the end of this share buyback programme, the Board will evaluate whether a further programme would be appropriate.

Any purchases pursuant to the share buyback programme will be carried out within certain pre-determined parameters and in accordance with the Listing Rules, other applicable law and the limitations of buyback authority approved at the last Annual General Meeting of shareholders. All shares purchased under the programme will be cancelled.

Enquiries
Trevor Finn	Chief Executive	Pendragon PLC	01623 725114
Tim Holden	Finance Director	Pendragon PLC	01623 725114
Gordon Simpson	Partner	Finsbury	0207 2513801
Philip Walters	Principal	Finsbury	0207 2513801

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