Share Buybacks and Special Dividends
In the year to date we have purchased 2.2m shares at a cost of £138m. In addition we have paid three special dividends, each of 50p and £223m in total. We have therefore returned £361m of surplus cash to shareholders this year in addition to ordinary dividends. We expect net debt at the end of January will be in the region of £550m compared with £517m last January.
We have not bought any shares for cancellation since 16 October, as our share price has generally traded above our £64.25 upper limit for buybacks. The Board has therefore decided to declare a further special dividend of 50p per share. This will be paid on 2 February 2015 with an ex-dividend date of 15 January to shareholders on the register at 16 January.
Taking the bottom end of the sales and profit guidance for the year to January 2016 (given above), a 2.5% growth in profit would result in profit of £795m next year. Using an 8% Equivalent Rate of Return this level of profit gives a buyback share price limit of £67.00. Our March statement will include more detailed sales and profit ranges for the year to January 2016 and we will then recalculate our buyback price limit.
Our results for the full year to January 2015 are scheduled to be announced on Thursday 19 March 2015.
