Profits up at acquisitive Vp
PROFITS and revenues are up at Harrogate equipment hire firm Vp following its acquisition of two new companies.
Profit before tax increased 9% to £18.7m whilst revenues were 16% ahead at £121.7m for the first half of the year.
Its UK division enjoyed a strong first half, with revenues and profits up 13% and 12% respectively. However its international division took a hit, reporting a decline in operating profits due to the weak oil and gas sector.
Despite a slight recovery in oil prices, the exploration market remains “very subdued” according to Vp, with an “inevitable” impact on revenues and profitability at its Airpac Bukom business. The company said it was tentatively optimistic that trading would pick up.
Activity in Australia held up well, it said, and its new business there TR Pty, acquired in April 2016 for £8.3m, was said to be performing well. It also announced last week that it was acquiring TechRentals NZ to consolidate its presence there.
Jeremy Pilkington, chairman of Vp plc, commented: “Strong organic growth plus the successful integration of two acquisitions has delivered this excellent set of results. Increased capital investment into market opportunities gives us confidence that we will be able to deliver results ahead of market expectations for the year as a whole.”
Neil Stothard of Vp spoke to TheBusinessDesk.com this morning. He said: “We’re very pleased with our interim results. It’s been a good six months of progress for us as a business and going against the macro backdrop over the past months, it’s nice to report further growth for the business.
“We’ve made three acquisitions over the last 12 months and these results include the first contributions from them which is always nice to have.
“Our core markets held up well over the period, and we managed to secure some growth in market share in some of our our businesses.
“One area been a bit quiet for us has been oil and gas sector, though this is a relatively small part of the business. We’re still very committed to that sector though it’s a rather longer downturn than it’s been for a while but it’s well understood and I think in the medium to long term that it will recover.
“That’s the essence of Vp, we have exposure to different markets in different cycles, and I hope we have the resilience if one particular sector is struggling.
“The UK division which is the bulk of business at this stage did extremely well and we did 13% profit growth, which is very strong.”
On expansion Down Under, Mr Stothard said: “The attraction of buying Melbourne-based TR group, was that it was a business we felt we could grow and the relatively small NX acquisition was the first of their expansion opportunities.”
