Redcentric plc, the Harrogate-based IT managed services provider (MSP), announce on Friday its intention to undertake a capital reduction that “will create additional capacity to deliver further returns to shareholders.”

“The company will today be posting to shareholders a circular, regarding the proposed cancellation of the company’s share premium account (the ‘Capital Reduction’) in order to create additional distributable reserves for the company … ” said Redcentric.

“On 23 October 2025, the company announced that it had conditionally agreed the sale of its data centre business to Stellanor Datacenters Group Limited.

“The company and Stellanor are continuing to finalise the conditions to completion, and it is currently anticipated that the disposal will complete on 30 April 2026. The board will update the market following completion on the use of proceeds.

“Following completion of the disposal, the group will focus on its successful MSP business, reduce the leverage on the Group’s balance sheet, and return material proceeds to shareholders most likely by way of an equity tender offer.

“The board currently anticipates that its ability to undertake an equity tender offer post completion of the disposal will not be conditional on the capital reduction completing.

“Without the proposed capital reduction, the company’s ability to undertake further or additional returns of capital beyond such initial, shareholder approved, equity tender offer may be constrained by the post disposal distributable reserves, estimated at £75 million. 

“The purpose of the proposed capital reduction is, therefore, to create additional distributable reserves, thereby increasing the company’s capacity and flexibility to undertake increased or further returns of capital to shareholders.

“Although completion of the disposal has not yet occurred, the board considers it prudent to commence the capital reduction process now so that the company is well placed to support future distributions to shareholders.”