Experian surprises with share buyback and new dividend ratio

28th Jan 2015 09:17

Credit checking group Experian has announced a $600m share buyback and made positive noises about growing its dividend, hidden among details of an investor seminar to be held on Wednesday afternoon.The FTSE 100 group said the repurchase programme of 5% of its shares had been decided following a full capital framework review.The review concluded that, given the group's strong cash generation, acquisitions will still be a key tenet of growth but that the strong cash profile "provides the potential to progress the ordinary dividend payout" in line with or ahead of earnings and a new target leverage range will be adopted of 2.0 times to 2.5 times net debt/EBITDA."There is now scope to enhance the efficiency of the capital structure, whilst sustaining strong investment grade credit ratings and sufficient flexibility for future investment," the group said in its statement.The $600m buyback will be completed over 14 months, well ahead of the schedule.Broker Liberum said it expected a return to additional capital returns."This new return guidance will be further supported by the growth initiatives expected to set out this afternoon, where we would expect focus on growth initiatives in credit services as well as plans to stabilise and improve its US consumer division."