Exel lining up £240m buyback

LOGISTICS specialist Exel today distanced itself from mounting speculation of an imminent bid as it revealed plans to return up to £240m to shareholders this year.

Chief executive John Allan said that despite constant rumours of interest from US giant UPS and German rival Deutsche Post, he has 'no reason to believe anybody will bid for the group'.

He added that Exel's focus was now on completing the integration of the Tibbett & Britten business bought last year and driving organic growth.

But the takeover talk is unlikely to die down after another set of strong results today which showed underlying pretax profits climbed 15% to £170.2m in the year to December - the top end of market forecasts - on turnover of £6.3bn, up 25%.

Stripping out the contribution from Tibbet & Britten, organic profit growth in the second half alone was 8%.

Allan is raising the total dividend 18% to 29.2p, the biggest jump for nine years, and said the board would decide how much to return to investors - most likely through a buyback - by April's annual meeting.

He said: 'Shareholders are keen to see companies return money and we're not going to stick our head in the sand over that.'