STOCKS NEWS EUROPE-UK small caps flat, lag mid caps

The FTSE Small Cap index and junior-listed AIM shares are flat, lagging a 0.3 percent gain for the mid-caps, but outperforming the blue chips, which dip by 0.4 percent.

Equipment rental business VP rises 5.3 percent in strong volume after posting first half profits of 12.8 million pounds ($20.68 million), 11 percent ahead of Peel Hunt's estimate, helped by a recovery in British house-building.

"VP offers upside given the improved trading dynamics. We anticipate further recovery in ROCE (Return On Capital Employed), a continued strengthening in its competitive position and the potential for further earnings upside as recovery comes through," analysts at Peel Hunt write in a note, increasing their target price on the stock to 550p from 500p.

The company has traded over its 90 day average volume by midday, while volume on the rest of the FTSE Small Cap index sits at just 35 percent of its average.

Internet telephony provider Coms (LSE: COMS.L - news) rises 8.9 percent after winning a major contract to supply 50,000 mobile SIM cards to a provider through its new Mobile Network (Paris: FR0010812230 - news) . The two-year contract is estimated to generate revenue to Coms of 20 pounds per user per month.

($1 = 0.6190 British pounds)

Reuters messaging rm://alistair.smout.thomsonreuters.com@reuters.net