Peachtree 2013 Annual Report Download - page 27

Download and view the complete annual report

Please find page 27 of the 2013 Peachtree annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

Financial strength supporting growth
With our consistent, strong cash flows, we
retain considerable financial flexibility. Our main
strategic priority remains an acceleration of
growth, both organically and through targeted
acquisitions, and we will invest in support of
that aim. This will enable us to support growth
of the ordinary dividend, with any surplus
capital being returned to shareholders from
time to time.
Delivering on our leverage target commitment
In December 2011, we committed to reaching
a net debt level equivalent to 1x our EBITDA within an
18-month period. In June 2013, we delivered on this
objective, which represents the culmination of a capital
allocation programme involving acquisitions (“M&A”),
share buybacks, a re-based ordinary dividend and
a £198.7m special dividend. In meeting this target we
have returned almost £1bn to shareholders.
Going forward, we are committed to maintaining
our net debt leverage at a minimum of 1x our EBITDA.
This leaves us with the flexibility to react to the right
M&A opportunities should they present themselves
and make further returns of capital to our shareholders.
Our M&A strategy
Our approach to M&A is disciplined, and acquisition
opportunities are judged against strict criteria.
They must:
– Demonstrate earnings accretion in year one; and
– Deliver a return in excess of our risk-adjusted cost
of capital.
We are focused on acquisition opportunities which fall
into three broad areas:
– Technology bolt-ons that offer us opportunities
to cross-sell into our installed base;
– Businesses in existing geographies that yield
immediate synergies and offer short payback
periods; and
– Businesses in new geographies where we are
prepared to wait longer to achieve target returns
in exchange for access to higher-growth markets.
This year, we acquired EBS Empresa Brasileira de
Sistemas Ltda. which is the third acquisition we have
made in Brazil following the Folhamatic and Cenize
acquisitions we made last year.
Rigorous
capital
allocation
Investment
and R&D
Targeted
M&A
Selected
disposals
Sustainable
and progressive
dividends
Capital
returns
Through
cycle gearing
Turn to our nancial KPIs on
page 44 to see how we monitor our
nancial strength
25The Sage Group plc | Annual Report & Accounts 2013
Financial statementsGovernanceStrategic report