Contracting and tool-hire firm Allen is returning £5m to shareholders through a share buy-back programme.

The scheme is the latest move in a burst of corporate activity by Allen. Last week, the firm announced that it would either sell or close G Pearce, its non-specialist civil engineering subsidiary.

Announcing the latest move, Neil O’Brien, Allen’s finance director, said the group had reviewed its capital needs, particularly the planned investment in its hire division, and found £5m in spare funds available.

The group warned that recent strategic changes, focusing on hire and utility services as well as contracting, would have an adverse impact on its next half-year results, due out in November.

Allen completed the sale of its housebuilding arm to North-west housebuilder Morris Group for £23.8m last month.

Rumours that Allen was also looking to exit contracting have been denied by the group. Chairman Donald Greenhalgh said last week that the contracting division’s recent performance had been disappointing.