Premier Asset Management Group has announced details on plans to cancel its share premium account as part of a capital reduction exercise.
Premier moved to paying quarterly dividends at the start of the year in keeping with its expectations for future cash flow generation and the group’s long-term earnings potential.
However due to restrictions on distributing reserves from the share premium account, which has a current balance of £44.8m, the capital reduction is being implemented to create distributable reserves for future dividends while also saving on administration. The move also allows for share buybacks or redemptions if deemed necessary.
If the capital reduction is approved by at least 75 per cent of shareholders at the general meeting on 27 June, an initial court hearing is scheduled for 26 July. If confirmed by the court, the capital reduction should take effect by 11 August.
Following the capital reduction, Premier expects to boost its distributable reserves by more than £50m.
The capital reduction does not affect shareholders’ voting or dividend rights or the return of capital.
In its half-year results published last month, Premier reported an 11 per cent increase in its assets under management helped by strong inflows over the first half of its financial year.