Capital Allocation Policy

 Objectives

The purpose of this policy is to document Cast and Craft ltd practices and policies concerning the allocation of its capital resources, including allocations for working capital, investments, capital expenditure, compliance with Krucible Kitchen financial policies, debt agreements and return of capital and profits to share holding

The directors shall continue to consider Cast and Craft ltd Capital Allocation Policy on a periodic basis, including with reference to both investments and production of goods

Effectiveness

This policy is effective as of 01 December 2024, and was last reviewed and approved as below

Updates

The Board will review and update this policy:

  • Every Six months or annually, according to changes in Cast and Craft ltd  business environment, reinvestment needs and opportunities, and capital structure 
  • On an ongoing basis as needed, at the occurrence of a material change in any of the factors mentioned above

 Policy Content

1. Principles

The purpose of Cast and Craft ltd capital allocation strategy is to increase long term shareholder value through:

  • Ensuring operational flexibility throughout the business cycle 
  • Returning capital to shareholders while preserving sufficient capital for business use

 2. Ensuring operating flexibility

Cast and Craft ltd currently believes that, to ensure operating flexibility through the business cycle, it must maintain a minimum unrestricted cash / debt headroom which the directors will review and agree limits on an annual basis/six months, or more frequently as required. Maintaining this headroom will provide a level of flexibility sufficient to fund Cast and Craft ltd working capital needs as well as set aside an appropriate operating reserve for unexpected events.

3. Deploying capital

Cast and Crat ltd believes that the prudent allocation of its cash resources, including for the following purposes, will contribute to maximizing shareholder value through:

  • Using capital to grow the business by reinvesting in areas where Cast and Craft ltd believes the expected returns provide attractive rewards relative to risks taken.
  • Funding capital expenditures, including investments required to develop Cast and Craft ltd retail footprint and logistical supply chain, and investments in IT hardware and software (including e commerce website)
  • Repaying any debt obligations that Cast and craft ltd may have, including amortization payments, prepayments from a portion of excess cash flow and voluntary prepayments to reduce the outstanding debt amount, including for the purpose of maintaining the ratings referred to above.
  • Seek opportunities in adjacent markets through acquisitions, joint ventures and other arrangements, as suitable opportunities arise 
  • Capital Return (6 months)

Cast and Craft ltd is committed to enhancing long term shareholder value through balancing growth and capital return.

4. Payment of Cash Dividends

Surplus funds from distributable profits may be distributed to shareholders, as may be determined by the Board of Directors, subject to:

  • The recognition of profit and availability of distributable reserves 
  • Cast and Craft ltd operating and investment needs 
  • Any banking or other funding requirements by which Cast and Craft ltd is bound 
  • Anticipated future growth and earnings(approved)
  • Provisions of the Articles of Association 
  • Emerging trends in the payment in the wider industry 
  • Any relevant applicable laws

Prior to the declaration, the directors may elect to transfer such percentage of its profit for that financial year as it may consider appropriate to the reserves of the Company. 

The directors shall be responsible for generating all proposed resolutions on the declaration and payment of dividends. The directors will not declare dividends if there are reasonable grounds for believing that Cast and Craft ltd is or would be, after a Dividend payment, unable to pay its liabilities or discharge its obligations as and when they become due. 

The decision to declare and pay dividends shall be approved at the Annual General Meeting of shareholders, upon the recommendation of the Directors. 

The Directors may in its discretion declare an interim Dividend based on profits arrived at as per quarterly or half yearly unaudited financial results. Where no final dividend is declared, the interim Dividend shall be regarded as the final dividend in the annual general meeting. 

In normal operating conditions, Cast and Craft ltd shall endeavor to maintain a dividend pay-out ratio of between 20% and 30% of profit after tax, of which approximately one-thirds will be paid as Cast and Craft ltd Registered in England No. 16151641

an interim Dividend and two-thirds will be paid as a final Dividend, subject to the above considerations and approval at the Annual General Meeting. 

b) Share Repurchase (Buy-back)

Cast and Craft ltd  may decide, following analysis and consultation with professional advisors, and based on the circumstances existing at the time, that the most appropriate form of capital return is repurchasing of shares rather than the payment of cash dividends. 

Cast and Craft ltd will review its available capital, together with the aims set forth in this policy, market conditions, any restrictions under its debt agreements and the financial risk involved, to determine whether to engage in share repurchase programs from time to time. Any decision to do so will be dependent upon the facts and circumstances at such time. 

The execution of share repurchases under any such program may be made from time to time in privately negotiated transactions. If approved by the directors, the timing and amount of the repurchase transactions will depend on a variety of factors, including market conditions, the liquidity of Cast and Craft ltd shares, the terms of Krucible Kitchen debt agreements, and other considerations.

5. Special Distributions

The Director will consider returning excess cash to shareholders by way of a special distribution if average net cash / debt headroom over a period rests consistently above or is projected to rest consistently above the minimum target level set by the Board, subject to known and anticipated investment plans at the time.

Approved by the Board of Directors