A slight dip for Vp
UK rental group Vp - owner of telehandler rental company UK Forks, spider lift specialist Higher Access, low level access company MEP and general rental business Brandon hire - has reported its full year results.
Total revenues for the year to the end of March were five percent lower at £362.9 million, due in part to the uncertainty at the start of the year and Covid-19 at the end. Pre-tax profits before exceptional items and write downs was slightly higher than last year hitting a new record of £47.1 million – however the company took some substantial goodwill write downs and was still including restructuring costs for merging its Brandon Hire and Hire Station operations, reducing pre-tax profits to £28.36 million, a decline of more than 15 percent.
The UK Forks division - which also covers Higher Access - had a relatively positive year with strong demand for its telehandlers, particularly in the house building sector, while general construction and telecoms were quieter. Site closures in March hit the business, but the company says that demand has started to pick up in May. Capital investment meanwhile remained at similar levels to 2019.
Revenues from the MEP low level access and press fitting division were flat while the tool hire business saw similar drop offs and pick up as UK Forks. The international division was largely flat with revenues of £31.9 million and an operating profit of £1.7 million. Net debt was reduced during the year from £167 million to £159 million. Overall capital expenditure was 14 percent lower at £49.1 million.
Chief executive Neil Stothard said: "The group took decisive action to control costs at the start of the pandemic including stopping all but essential recruitment and capital expenditure. We kept many of our operating locations open for business throughout, in support of those critical sectors requiring our services, we initially mothballed some sites and participated in the Government's job retention scheme, furloughing approximately half of our UK employees at the peak in April. We have since re-opened branches and taken employees out of furlough as demand has slowly recovered. The International division has also been impacted with different countries feeling different effects of the pandemic.”
"We have strengthened further our financial position by conserving cash, reducing costs and delaying the dividend. We believe that this will help ensure the long term resilience of the business as well as its capability to respond quickly as markets recover. Vp is fundamentally sound and is built on over 60 years of successful development. A combination of supporting a diversity of markets across a range of geographies together with a strong financial discipline and an excellent team will help us to quickly re-position the business and allow us to embrace the fresh but increasingly positive challenges that the next 12 months will hold."
Chairman Jeremy Pilkington added: "The results up until 31 March 2020 can be considered a very satisfactory performance, with modest margin and PBT improvement achieved against a highly uncertain economic backdrop with the UK being distracted by Brexit and the General Election in December 2019. Vp was expecting to see a return to heightened activity levels across our core markets, however the worldwide government restrictions imposed on movement as a results of Covid-19 have had an impact on trading for the current financial year. We are however encouraged that in several sectors, activity has started to pick up and it is encouraging to hear the emphasis Governments are giving to the importance of resuming work wherever possible whilst respecting safety guidelines.”
All in all this is not a bad result from Vp, clearly the first half of the current year will be a good deal worse, but clearly business is picking up again and the company does have the benefit of lower costs thanks to UK government initiatives. Overall the company is well placed to come through the crisis.