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Capital allocation

Increased bus division profitability and balance sheet strength leave the Group well placed to make choices about the allocation of capital.

Our three key capital principles:

To manage the Group’s financial affairs in a way consistent with the retention of an Investment Grade rating

To cover ordinary dividends at 2x adjusted earnings over a five year cycle

To remain in the lower half of our target gearing range of 1.5x to 2.5x EBITDA

Our priorities for capital allocation

1. To sustain profits from existing businesses and meet commitments in franchise and othercontracts

2. To reserve against known risks and contingencies

3. To bid for opportunities in agreed target markets

4. To support new franchises and contracts

5. To pay a progressive ordinary dividend

6. To make returns to shareholders consistent with our capital principles


Returns to shareholders will be determined in line with this policy, taking account of the Group’s long term interests.