The latest purchase

M.P. Evans Group (LSE:MPE) told the market on 10 November 2026 that it had bought 6,532 of its own shares the previous day at a volume-weighted average price of 1,722.95p, with trades between 1,702p and 1,734p. The shares are being cancelled rather than held in treasury, leaving 52,016,576 in issue. At that average price, the day's purchase cost about £112,500, or roughly 0.01% of the share capital. The notice is one of a near-daily series stretching back through October, and it raises a straightforward question about what the programme says about the group's capital allocation.

About palm oil production

Oil palm trees produce fruit bunches that are harvested and taken to mills, where crude palm oil and palm kernels are extracted. Output depends on rainfall, tree age and harvesting conditions, and the price depends on global Demand for edible oils and biofuels, as well as government policies in producing and consuming countries. Companies that own plantations are therefore exposed to the weather and to prices, neither of which they control.

Who M.P. Evans is

LSE:MPE owns and manages oil palm plantations in Indonesia, selling crude palm oil and palm kernels from its own estates and from fruit bought from surrounding smallholders. It reports in US dollars but pays dividends in pence. Its Earnings are driven by crop volumes, mill output, production costs and the international palm oil price, which the company does not control and which can move sharply with weather and government policy.

How the programme is structured

The board has authorised market purchases of up to £3m of its 10p shares, carried out by Cavendish Capital Markets at its discretion within preset parameters. The programme runs until 15 December 2026, after which the board will review whether to extend it further. The company cited solid operational cash generation and a sound balance sheet, and said it regarded its shares as attractively priced.

At around the latest price, £3m would buy roughly 174,000 shares, about one-third of 1% of those in issue.

The cash behind the decision

The buyback sits alongside a rising dividend. Half-year results published on 14 September showed Revenue for the six months to 30 June up 9.4% to $196.3m and pre-tax profit up 25% to $78.6m. Crude palm oil production rose 11% to 192,300 tonnes and the interim Dividend increased to 25p from 18p. The company put group cash at $113.5m, 61% higher. The company also said that the crop harvested in July and August was 24% above the same period of 2025.

Seen against those figures, a programme of up to £3m is small. It complements rather than replaces the dividend as the main channel for returning cash.

The two tools work differently. Cancelling shares increases each remaining share's claim on future earnings and dividends, while a dividend pays all holders equally. A buyback also gives the board flexibility, because it can be paused without the signalling cost of cutting a declared payout.

Risks to the cash position

LSE:MPE flagged that El Niño conditions had brought lower-than-normal rainfall to Indonesia, which could reduce regional production, with any effect possibly not visible until 2027. Lower output could be partly offset by higher palm oil prices, but neither outcome is certain. Earnings are also sensitive to Indonesian export levies and biodiesel policy, to currency movements between the dollar, rupiah and sterling, and to capital needs from planting and land acquisition, including new land reported after the half-year.

The cost and pace of the buyback

A purchase of 6,532 shares at 1,722.95p cost about £112,500. At that rate, a programme of up to £3m would require about 27 days of such purchases. The programme runs until 15 December 2026, which is about five weeks from the date of the latest notice, so the company would have to buy at a larger daily rate to use the full amount in that time. If it does not, the board may extend or end the programme at its review.

The 52,016,576 shares in issue mean that 174,000 shares would be about 0.33% of the capital, so the effect on Earnings Per Share would be small.

Results and production

Revenue of $196.3m, up 9.4%, and pre-tax profit of $78.6m, up 25%, imply a pre-tax Margin of about 40%, which is very high for an agricultural Business and reflects the palm oil price relative to costs. Production of 192,300 tonnes of crude palm oil, up 11%, suggests the Volume increase is a major driver. Cash of $113.5m, up 61%, shows how cash accumulates when margins are wide.

The Interim Dividend of 25p, against 18p, is an increase of about 39%.

The crop outlook

The crop harvested in July and August was 24% above the same months of 2025, so recent output has been high. The flag about El Niño conditions indicates a risk because the weather pattern can reduce rainfall, which affects palm yields with a lag. Because palm trees respond to dry weather months later, lower yields may appear after the dry conditions rather than during them.

Dividends and Buybacks together

A dividend pays all shareholders equally and tends to be treated as a commitment, so cutting it can send a negative signal. A buyback is discretionary and can be paused, which gives the board flexibility. By pairing a rising dividend with a modest buyback, the company returns cash in two ways while keeping the larger share in the form of dividends.

Costs and exchange rates

The company reports in dollars but pays dividends in pence, so the sterling value of its payments depends on the exchange rate. Costs in Indonesia are mainly in rupiah, while palm oil is sold in dollars, which means Exchange Rate movements also affect margins.

What comes next

The disclosed date to watch is 15 December 2026, when the current authority expires and the board is due to consider an extension. Until then, further daily notices will show the pace of purchases. Shareholders should not assume an extension: the board has said only that it will review one. Beyond that, the group's crop and production updates, and its full-year results for 2026, will indicate whether cash generation remains solid enough to support both the progressive dividend and continued buybacks.