Reliance Worldwide Corporation (ASX:RWC) has bolstered its capital return program, announcing a further on-market share buy-back targeting $120 million.
The substantial move comes as an addition to the US$15.3 million buy-back previously unveiled in February, which formed part of the company’s half-year distribution.
The total distribution for that period, including an unfranked interim dividend of 2 US cents per share, highlights a robust period of shareholder returns for the global plumbing and heating solutions provider.
RWC Chair Russell Chenu emphasised that the decision reflects the board's deep-seated confidence in the company’s long-term strategy and future outlook.
Despite navigating "subdued end markets," the company has maintained strong cash flow generation over the past two years, allowing for a significant reduction in net debt.
The financial discipline has seen RWC's leverage ratio fall below its target range of $1.5$ to $2.5$ times net debt to EBITDA.
The buy-back, which will be funded through a mix of cash reserves and existing borrowing facilities, is designed to efficiently return excess capital to shareholders.
By the conclusion of this $120 million initiative, RWC expects its leverage ratio to return comfortably within its target parameters.
The company confirmed that the expanded program will adhere to the 10/12 limit statutory requirements, though it maintains the flexibility to vary, suspend, or terminate the buy-back should market conditions shift.