Vp plans £7.8m share buy back

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EQUIPMENT hire group Vp has revealed plans to buy back about seven per cent of its shares for £7.8m.

The Harrogate-based group, which rents out equipment ranging from power tools to ground supports, said it plans to buy one in 14 of its shares at 254p each.

Vp did not say why it plans to buy back the shares but analysts said it reflects management’s view that its shares are undervalued. Earlier this week it upgraded expectations, saying it expects to report full year profits “moderately” ahead of market forecasts.

The total value of the maximum 3.08m shares it wants to buy is £7.8m - although this is contingent on shareholders backing a special resolution at its March 9 general meeting.

Vp added the tender offer will be void if less than one per cent of its issued ordinary share capital is tendered.

Analysts at house broker N+1 Brewin said: “The buy back will be earnings enhancing and clearly evidences management’s belief that the shares are significantly undervalued at the current level.

“Having upgraded forecasts following the interim management statement earlier this week we make no further changes to our estimates today, pending the outcome of the tender offer. We retain our 335p price target.”