Plant hire acquisition to see Vp strengthen division

EQUIPMENT hire group Vp is to boost its Groundforce division with the £900,000 acquisition of Harbray Plant Hire in Kent.

The acquisition will be integrated into Vp's Groundforce division and the Harrogate-based group said it will complement its existing activities.

Vp executive chairman Jeremy Pilkington said: "The acquisition of Harbray further enhances our pipeline pressure testing offering within Groundforce and brings with it a wealth of expertise, which will benefit our combined customer base."

At completion, Harbray had 300,000 of free cash.

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Vp said it has seen demand recover after January's heavy snowfall hampered business.

The group said market conditions remained stable despite most of its businesses being affected by the weather. It expects to report full year results in line with market expectations.

Vp, whose operations cover a wide range of sectors, including rail, road building and civil engineering, has said general construction has remained challenging.

It has seen some tentative recovery in demand from housebuilders, but commercial construction remains "very subdued" and is expected to continue as such.

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Earlier this year Vp said the regulated infrastructure sector has "held up well". However, the group expects a "hiatus" in water spending when the current regulatory period ends. It is seeing good demand from transmission, and a potential improvement in rail.

Vp added the oil and gas exploration market is stable, with "improving prospects" in the medium term.

The group believes its diversity should stand it in good stead.

Vp continues to invest in its business but is creating strong cash flow, helping keep debt well within covenants. The company, which owns the Hire Station equipment rental chain, last reported net debt of 55m, with 80m of debt facilities. Debt is thought to have shrunk further in the past few months.

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Vp believes its nimble-footed approach to costs and debt has helped it avoid asking shareholders for cash, unlike many peers exposed to the struggling construction sector.

The company covers markets ranging from oil and gas to housebuilding.

About a third of the group is exposed to the construction sector, with another six per cent in housebuilding.

Last month Groundforce announced it had been given a new logo by parent company Vp.

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As part of a rebranding of all of its businesses, Vp has given the firm a unifying logo, aimed to reflect connections between divisions. Vp's other businesses are Airpac Bukom, Hire Station, Torrent Trackside, TPA and UK Forks.

"This is not just a case of designing a new logo, " said David Williams, managing director of Groundforce and TPA. "Our customers are having to operate across many sectors and they are not easily making a connection between our businesses.

"The unification of brand is there to make that connection and provide the customer with the reassurance that they are trading with a long-standing, international and financially stable supplier."

Vp's shares closed down 3.8 per cent last night, a fall of 7.5p to 190p.

Specialist on a roll

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Equipment hire specialist Vp started life as Vibratory Roller and Plant Hire (Northern) Ltd in 1954, specialising in vibratory rollers.

In 1959 the opening of the first section of the M1 helped propel the company to more than ten years of unbroken profits growth.

In 1960 the firm changed its name to Vibroplant and adopted the V logo.

Thirteen years later Vibroplant floated on the London Stock Exchange. In 1975 its Airpac division was created, leasing compressors.

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In 1982 Vibroplant expanded into the US and bought Florida Hi-Lift Corp.

In 1992 Groundforce, which works on major construction projects, became Vibroplant's biggest acquisition to date, and in 1997 rail equipment hire group Torrent Trackside was bought.

Vibroplant changed its name to Vp in 2001 and began a period of consolidation and acquisition.

It bought Mechplant in 2002, followed by Trenchshore a year later. In 2005 it bought ESS Safety Services, Dudley Vale and TPA and in 2006 it acquired Bukom Oilfield Services.

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