Commercial vehicle hire group Redde Northgate has launched a £30m share buyback programme.
The Darlington firm said it had agreed with stockbrokers Numis that it would buy up to 24 million ordinary shares which would be held in treasury.
In an update to investors, Redde said it already had a good merger and acquisition pipeline and that even after taking into consideration growth capital, dividend payments and the acquisitions, it had substantial headroom.
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At the same time, Redde said trading was ahead of expectations with rental margin to the end of February at 15.8% in the UK and Ireland, and 17.5% in Spain.
It expects underlying profit for the year ended April 30, 2022 to be about £150m, ahead of £133.9m analyst consensus, of which about 33% would be attributed to disposal profits.
Omicron and home working meant volume was hindered in December but it had since recovered to about 90% of pre-Covid levels.
Redde also said it had continued to de-fleet a lower number of vehicles due to rental demand and new vehicle supply constraints with used vehicle market values staying strong. It expects vehicle supply constraints are expected to continue through FY 2023.
The share buyback is expected to be completed by September 15.
