4. Capital Management
The Board’s policy is to maintain a
strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The Board
of Directors monitors the ratio of net debt (including pension
liabilities) to EBITA. The Board of Directors also monitors the level
of dividends to ordinary shareholders, where we aim to provide a level
of dividend yield that reflects the level of confidence in future
financial performance.
The Board seeks to maintain a balance between the more favorable WACC that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position, as well as the bolt-on acquisition opportunities that secure financing affords the company.
The average interest expense on interest-bearing borrowings was 4.9 percent and the Company’s ratio of net debt to EBITA was 2.3 times.
There were no changes in the Group’s approach to capital management during the year. Neither the company nor any of its subsidiaries are subject to externally imposed capital requirements.