A dose of self-help sees Vp improve profits and raise its dividend

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EQUIPMENT hire group Vp said its “self-help” measures give grounds for optimism despite the tough economy.

The Harrogate-based group reported six months of growing profits and revenues, helping fund a dividend increase.

Profits before tax and amortisation climbed six per cent to £11m in the six months to the end of September, up from £10.4m a year earlier. Revenues climbed two per cent to £84m.

Vp said the results came despite “continued unsettled market conditions”. “We have for some time felt that the prospects of a general uplift in UK market activity supporting business growth was unlikely to be forthcoming,” said chairman Jeremy Pilkington.

Of its six divisions, only oilfield equipment rental supplier Airpac Bukom saw a fall in profits. Vp blamed this on a gap in the Australasian liquefied natural gas market.

“We’re not looking for or expecting any help from the market itself,” said Mr Pilkington. “It’s about self-help.

“Looking at Vp’s universe we’re really quite optimistic about what we see. We see growth opportunities in all of our businesses.”

The group’s Groundforce arm, which provides hydraulic supports to big infrastructure projects, grew profits 19 per cent to £4.1m. Vp has expanded this business into Germany, where it is targeting both big infrastructure projects and regional schemes. Its biggest struts can take loads of up to 500 tonnes.

“Groundforce is very much at the start (in Germany),” said managing director Neil Stothard.

“We’re investing in products and building up a team.

“(It will be) 18 months before it makes a tangible contribution to the group.”

Vp spent £4.1m on acquisitions during the period, buying Balfour Beatty’s survey, safety, communication and plant rental businesses and embedding itself further with the infrastructure giant.

It continues to look for deals, but these are likely to be bolt-ons, rather than transformational.

“We will pursue specific attractive opportunities,” said Mr Stothard.

“Going out and buying an existing business stream which is not necessarily a core activity for us and which is not guaranteed revenue – it’s not the time to be doing that.”

Its interim dividend of 3.25p per share compared with 3.1p a year earlier. Vp’s net debt climbed to £50.1m from £40.4m.

It now employs about 1,650 staff, including around 100 at its Harrogate headquarters. Vp, founded in 1954 by Fred Pilkington, is still about 53 per cent owned by the Pilkington family trust.