Strong UK performance drives Vp

Equipment hire firm Vp '‹has reported record annual profits and said '‹it has made significant progress over the past year, driven by a strong performance in its UK business.

Vp has invested 65m in its fleet, up from 58m the previous year
Vp has invested 65m in its fleet, up from 58m the previous year

The Harrogate-based firm ​said it has​ entered the new financial year in ​"​excellent shape​"​ and whilst there may be market uncertainties, ​it​ look​s​ forward to the new financial year with confidence.​

The group's CEO Neil Stothard said: "The record profits show a continuation of a long term trend. We are working in the right market areas, offering the right specialism.

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"This is very much about a strong UK performance."

The group reported a 16 per cent increase in underlying pre-tax profits to a record £41m in the year to March 31. Revenue rose 22 per cent to £304m.

Vp will pay out a total dividend of 26p a share for the full year, an increase of 18​ per cent.

Finance director Allison Bainbridge​ said: "Our dividend​ reflects growth in the group. We are generally positive although there are some uncertainties."

Asked about these and why Vp appears to be immune from Brexit uncertainty, Mr Stothard said: "I don't think anyone's immune. Life, to an extent, is carrying on as normal.

"I'm sure we are gaining elements of market share because of the quality of what we do.

"We have a resilient business model in different markets and different geographies."

Chairman Jeremy Pilkington added: "We focus on regulated markets such as electricity, rail, water and utilities where there are five, 10, 15 year programmes."

The group has invested £65m in its fleet, up from £58m the previous year.

While the UK is driving growth, Vp also sees considerable opportunities overseas.

M​r​ Pilkington said:​ ​“It has been another year of significant progress for the ​g​roup underpinned by record profits and the​ ​acquisition of Brandon Hire, our largest to date.”

​Mr Stothard added: “The start to the new financial year has been positive. We​ ​anticipate that our core UK markets will continue to provide a strong platform for future growth to our​ ​UK division.

​"​Internationally we do see some recovery in the oil and gas segment and a supportive​ ​Australian economy. We continue to drive positive change and development through the whole of Vp​ ​and we remain excited about delivering on those initiatives in the new financial year.”

​Analysts at N+1 Singer said in a note: "Vp has confirmed another year of excellent progress. Revenue increased by 22​ per cent​ to £303.6m and ​pre-tax profit by 16​ per cent​ to £40.6m, 4​ per cent​ ahead of our forecast.

​"​The highlight of the period was the strategic acquisition of Brandon Hire, Vp’s largest to date. The integration is underway and the business is performing in line with expectations."

Analyst Andrew Nussey at Peel Hunt added: "VP remains a well managed UK rental business and its long-term track record is impressive.

​"​We continue to see upside in the shares​."

​Analyst Paul Hill at Equity Development said: "Whichever way the EU pendulum ultimately swings, we’re confident Vp will​ ​continue to outperform over the cycle.

​"​Indeed the firm’s tried & tested approach of​ ​focusing on renting specialist equipment, complemented by flawless execution and synergistic​ ​M&A​, enabled it to post exemplary results once again​."