Vp reports strong results amid a resilient market

Brandon Hire will operate alongside Hire Station

The Harrogate-based group said that whilst there is some uncertainty around the implications that Brexit will have on the UK, day-to-day demand is "highly positive".

Pre-tax profit rose 13 per cent to £21.2m in the six months to September 30 and revenues rose 12 per cent to £136m.

Chief executive Neil Stothard said: "We've seen a maintained level of activity. There are pockets of quieting down in the South East and London, but it continues to be busy elsewhere.

"Well over 50 per cent of our business is in the infrastructure market - regulated industry. We are alert to changes, but these are very good numbers."

Vp said its UK division saw excellent trading and delivered a strong first half with operating profits up 14 per cent to £22.2m.

The group said infrastructure investment, residential activity and general construction all remained supportive throughout the half year.

Earlier this month Vp made the largest acquisition in the history of the group with the purchase of Brandon Hire for a cash consideration of £41.6m plus debt of £27.2m.

Brandon Hire will operate alongside Hire Station and Vp said it will create a new market leading offering in the UK specialist tool hire sector.

"The acquisition has gone down well both with Vp and Brandon," said Mr Stothard.

"It's a good business that is profitable."

Vp said the first half of the financial year was challenging for Airpac Bukom following delays to secured contracts. However it said new business inquiry and activity levels have improved in the second half, helped by the recent rise in oil prices, which leads the group to believe that progress will be made in the second half of the current financial year.

The group said there are conflicting views on the prospects for the UK, amplified by speculation on the impact of Brexit, but day-to-day demand on the ground remains positive.

"It's been an excellent first half," said Mr Stothard.

"We've seen good profit growth in a flat market, which goes back to Brexit.

"Whilst Brandon won't be a major contributor this year, exciting growth is to come next year."

Analyst Andrew Nussey at Peel Hunt said: "Vp remains one of better managed UK rental business and its long-term track record is impressive.

"We continue to see upside in the shares given the attractive ROCE and specialist market exposures. Shares trading on 9.1 times our 2019 estimates – too cheap if Brandon is delivered successfully."