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TP ICAP Group plc (LSE:TCAP) has revealed plans to initiate a third share buyback programme following the imminent conclusion of its second buyback initiative. This move underscores the Company’s commitment to capital management and shareholder value.
Details of the Third Buyback Programme
TP ICAP will commence its third share buyback programme, valued at up to £30 million, once the second buyback programme concludes. This new initiative aims to purchase TP ICAP's ordinary shares of 25p each (the "Ordinary Shares") for a maximum consideration of £30 million. The buybacks are part of the Company’s strategy to reduce capital and/or meet obligations under employee share schemes. Shares acquired through these buybacks that are not cancelled will have their dividend rights waived.
As of August 6, 2024, TP ICAP has repurchased 13,320,585 Ordinary Shares for a gross total of £28.9 million under the second buyback programme, nearing the £30 million target.
Strategic Rationale and Financial Outlook
The announcement of the third buyback programme reflects the Board’s ongoing confidence in TP ICAP’s future prospects and highlights the Company's robust financial position. This initiative aligns with TP ICAP’s dynamic capital management strategy, which remains a key priority. The Company’s commitment to return cash to shareholders is balanced with investments in business growth, including targeted mergers and acquisitions, as well as debt reduction.
TP ICAP is noted for its strong cash generation and prudent capital management framework. The Board believes the third buyback represents an optimal balance between investing in the Company’s organic growth areas—such as Fusion, Liquidnet Credit, and Parameta Solutions—and reducing debt.
Dividend and Operational Efficiency Initiatives
In line with its clear dividend policy, which maintains a 50% payout ratio of adjusted post-tax earnings, TP ICAP will pay an interim dividend of 4.8 pence per share for the first half of 2024. This dividend remains consistent with the previous year. Eligible shareholders will receive the interim dividend on November 8, 2024, with the ex-dividend and record dates set for October 3, 2024, and October 4, 2024, respectively.
In addition to the buyback programmes, TP ICAP is launching a new three-year plan to release at least £50 million of surplus cash through further legal entity consolidations and achieve £50 million in annualised cost savings through operational efficiency measures.
Share Repurchase Authority
The share purchases will be conducted within pre-set parameters and in accordance with the general authority granted by shareholders at the Annual General Meeting held on May 15, 2024. This authority allows the Company to repurchase up to 79,539,093 ordinary shares, representing 10% of the issued share capital.
