VP feels benefit of decision to switch to more resilient markets

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

In the year ended March 31 2013, profits before tax and amortisation rose nine per cent to £17.4m, on revenues up three per cent at £167m.

Gearing remained “broadly unchanged” at 45 per cent.

The board is recommending a final dividend of 9.0p per share, making a total for the year of 12.25p per share, which is an increase of eight per cent.

Jeremy Pilkington, the chairman of VP, said yesterday: “The group has delivered another strong performance with increased profits, margins and return on capital employed.

“While the economic background still contains significant uncertainties and challenges, this set of results again demonstrates the group’s ability to continue to deliver value for shareholders, even within a relatively unsupportive trading environment.

“Each of our businesses continues to work hard to uncover opportunities for investment and growth, and we believe that the group has positive momentum moving into the new financial year.

“We look forward to another year of progression as we maintain our focus on delivering consistent, quality and sustainable returns over the long term.”

VP, which employs 1,600 people, also said it planned to strengthen the business by taking on around a dozen apprentices this year.

Mr Pilkington also said there were “strong arguments” for investing more in the UK’s infrastructure.

He added: “It’s critical for UK plc to have quality infrastruc- ture.”

A note from analysts at Charles Stanley said yesterday: “The (VP) preliminary results confirm an improving trend, and demonstrate the benefit of focusing on specialist sectors, despite the unsupportive trading environ- ment.

“This is a solid enough performance, but with VP trading on a premium to tangible net assets of 127 per cent, we prefer other stocks in the plant-hire sector on growth, valuation and liquidity grounds.”

VP has rebounded strongly since its 2010 trough, when profits and sales tumbled.

The company responded by slashing debt and cutting costs, including shedding eight per cent of its workforce, and re-focusing its business.