04.06.2019

Strong revenue growth for Vp

UK rental company Vp – owner of UK Forks, Higher Access and Brandon Hire has reported its preliminary results for 2018/19.

Revenues for the full year to the end of March were £382.8 million, up 26 percent on the year. The UK operations represent more than 90 percent of revenues, at £350.3 million a 29 percent improvement over the previous year. The company says that trading within the UK Forks division was mixed, with solid support from the housebuilding sector partially offset by a more challenging environment in general construction. Activity was also subdued in the telecoms sector as the roll out of 5G across the UK was delayed. The company maintained new investment in the fleet although it is reported to be slightly lower than last year.
The MEP low level access and press fitting business is reported to have had another good year and opened two new locations as it looks towards further regional expansion.

The Brandon tool hire business, acquired in November 2017, is now reported to be well integrated with Vp’s Hire Station as it made its first full year contribution,
Pre-tax profits increased just over nine percent to £33.6 million, with lower percentage growth due almost entirely to a substantial increase in exceptional costs - £8.62 million compared to 1.68 million last year, “resulting from acquisition integration costs, business restructuring and regulatory review costs”.
Capital expenditure on the rental fleet was very slightly lower than last year at £63.8 million, with sales of used equipment from the fleet of £20 million, compared to £15.5 million last year. Net debt at the end of March was just over six percent lower at £168.1 million.

Chairman Jeremy Pilkington said: "Today Vp is reporting another strong set of full year results, with key financial metrics ahead of last year. We have entered the new financial year in excellent shape, and we look forward to the challenges and opportunities of the future with confidence and excitement."
Chief executive Neil Stothard added: "Vp has started the new financial year positively and in line with our expectations. We anticipate that our main markets in the UK will continue to be supportive, but with slightly slower overall growth than experienced in recent years influenced by the current political and economic uncertainty. I am pleased to say that the international backdrop is also broadly positive, with opportunities in Australasia with TR Group and the wider oil and gas exploration and maintenance sectors too.”

"The year was one of significant development for Vp, and we were particularly pleased with the quality of the Brandon Hire integration. We were delighted to acquire Sandhurst just after the financial year end and look forward to developing the business further under our ownership."

Vertikal Comment

Another highly positive year from Vp which continues to expand at a steady pace, without building a massive debt mountain. It is interesting to note the flat rental fleet investment, coupled with higher disposals, which one assumes has reduced to size of the fleet, possibly having a positive impact on utilisation?
The company is in a good place for further expansion, in some of its key market sectors, as well as overseas. An encouraging set of results.

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