25.11.2015

Strong first half for Vp

UK rental company Vp has announced its half year results for the six months to the end of September, and issued a positive statement for the year as a whole.

Overall revenues for the six months increased four percent to £105.1 million, in spite of what it calls a subdued economic background. Pre-tax profits for the period improved six percent to £16.3 million, with an increased return on capital employed, now at 16.1 percent.

UK Forks, the telehandler rental business saw revenues rise more than seven percent to £9.8 million while operating profits jumped almost 25 percent to £2.9 million

The company said that demand from the housebuilding sector continues to grow, while non-residential construction activity remained stable. The company took the opportunity to step up the refreshment of its fleet, profiting from the sales of older equipment, it has also stepping up its customer service.

The general rental business, Hire Station, which now includes a substantial access business, boosted revenues nine percent to £39.2 million, while profits jumped 27 percent to £6.1 million

As a whole the company's capital expenditure on its fleet was similar to last year at £23.4 million, while net debt at the end of September was £81.8 million, up from £66.8 million last year.

Chairman Jeremy Pilkington said: "This has been another year of solid progress for the group, achieved against a more subdued economic background. Revenues, profits, earnings per share, return on capital and dividend all moved ahead. Once again the group has demonstrated its strength through diversity in the quality of these results."

"The board believes that the group will deliver further value growth for our shareholders for the year as a whole."

Vertikal Comment

Another solid set of numbers from Vp, made all the more spectacular by the less than positive performance of some of its larger competitors. The company has expanded slowly and methodically in recent years, keeping supply in concert with demand from its customers, and focused on improving its equipment and service, all of which appears to be paying off. In spite of its higher borrowings, its gearing remains conservative, providing it with all manner of opportunities.

Results like this are encouraging, at a time when the market is taking a pause in the recent growth trend, and will perhaps send a message to others.