MP Evans Group PLC (AIM:MPE) has announced an extension of its ongoing share buyback programme by a further £2 million.
The extension brings the sustainable palm oil producer’s total buyback programme commenced in June to £4 million.
MP Evans has a strong track record of shareholder returns, having repurchased £6 million in a previous buyback and hiking dividends by 21% at the end of its last financial year.
The board has consistently stated that MP Evans’ assets, business performance and future prospects are undervalued by the market.
Per today’s announcement, the group’s “robust balance sheet provides the opportunity to take advantage of prevailing market conditions to repurchase shares at advantageous levels that will enhance earnings”.
Though today’s interim earning call disclosed a 62% dip in profits, largely due to falling palm oil prices, analysts remain encouraged by forward estimates.
Peel Hunt said lower profits in the first half were to be expected, “but the strong start to the second half means that we make no change to our full-year forecasts”.
Analysts noted that the company is continuing to add to its production potential, “which will improve profits and cash flow”.
Shares are trading at a 50% discount to historic net asset value, “which represents compelling value in our view”, said the broker, thus reaffirming a buy rating with a 1,140p price target.
MP Evans shares were changing hands for 750p as of 1pm, September 11.