27.11.2018

42 percent leap for Vp

UK based rental company Vp has reported a 42 percent jump in revenues for the six months to the end of September, following the incorporation of Brandon Hire, telehandler company First National, the M&E division of JMS and Zenith Survey Equipment.

Total half year revenues were £193.2 million, up 42 percent on the same period last year, this included £175.3 million in the UK - almost 46 percent higher than last year, of which £39.4 came from Brandon Hire. Without the Brandon contribution revenues would have been 13 percent higher, partly due to organic growth and partly to the smaller acquisitions mentioned above.

Overseas revenues - mainly in Australasia - were 14 percent higher at £17.9 million.

Pre-tax profits for the group were 17.5 percent higher at £23.9 million, held back by an additional £1.1 million of amortisation and impairment and an extra £1.4 million of finance costs, with net debt rising just over five percent to £188.2 million. The UK business achieved an operating profit of £26.9 million, up 22 percent on last year, while the fledgling overseas business more than quadrupled its operating profit to £1.3 million.

Capital investment in the fleet increased 13 percent to £36.7 million with disposals up slightly at £6.8 million.

Chairman Jeremy Pilkington said: "The group has produced yet another excellent set of results with revenues, profits and earnings per share all significantly ahead. Both our UK and International Divisions have performed strongly with most of our business units busy supporting stable end markets. In the UK Division, whilst Brexit continues to be a distraction, day to day activity seems to be continuing largely unaffected. With the benefit of a strong first half, which includes an in line contribution from Brandon Hire, we look forward to the remainder of the year, and beyond, with every confidence."

Vertikal Comment

Overall this is an excellent set of numbers from Vp. The Brandon acquisition is the largest it has made for some time, but it appears to have gone relatively well. The company says that it will be another 12 months before it is fully integrated with its Hire Station business, by which time further synergy related benefits ought to have flowed through to the bottom line, although the product mix between Brandon and Hire Station is slightly different, with the former carrying a slightly wider range of powered access equipment, which almost certainly has an impact on short term margins.

The company has some solid upside potential in its oilfield equipment hire business and continues to do well with its telehandler business UK Forks which incorporates spider lift specialist Higher Access.

The company looks set for a record year with revenues likely to exceed £350 million for the first time in its recent history. It would be interesting to look way back and compare it with the peak years of Vibroplant – as the company was previously known – when it incorporated a large US access rental operation.

All in all, another very positive result.