Last checked at 22 Jun 2022 07:00
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.
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.