Vp adds to its empire with £4m deal for Balfour Beatty divisions

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TOOL and equipment hire group Vp has bought two equipment rental businesses from Balfour Beatty for £4m in cash.

Hire Station, a division of Harrogate-based Vp, has acquired Balfour Beatty’s survey, safety and communication equipment rental business, which operates from locations in London and Glasgow.

The acquisition includes a minimum three-year framework agreement for the supply of these services to Balfour Beatty in the UK.

The UK Forks division of Vp has bought Balfour Beatty’s plant rental business, which operates from depots in Croydon and Exeter.

The acquisitions will be integrated into the respective Vp divisions.

Jeremy Pilkington, chairman of Vp, said: “These acquisitions represent important developments for Hire Station and UK Forks and we look forward to further strengthening our business relationship with the Balfour Beatty Group following this transaction.”

Vp recently reported record annual revenues and said its specialist focus is helping it to outperform the weak UK economy.

The group has shifted away from general construction in recent years to the more resilient markets of infrastructure, rail, housebuilding and oil and gas.

It posted expectation-beating 16 per cent growth in both sales and profits in the year to the end of March, and said its strong balance sheet gives room for further growth.

Vp hires out equipment ranging from telescopic forklift trucks to temporary aluminium roadways.

“We’ve managed to move the group towards those segments where there’s expenditure, “ said managing director Neil Stothard. “It’s all been organic growth and we’ve generated strong cash as ever. These are record revenues for the group – it’s a nice milestone to reach.”

Profits before tax, exceptional items and amortisation rose to £16m from £13.8m a year earlier. Revenues surged to £163.6m from £141m.

Despite spending a third more on its fleet at £32.1m, net debt was broadly unchanged at £40.4m.

Vp now earns 43 per cent of its revenues from infrastructure, compared with 33 per cent in 2008. Construction revenues have fallen from 39 per cent in 2008 to 24 per cent.