Focus on efficiency helps to maintain profits at Vp
Tool rental group Vp has delivered a resilient half-year performance as it maintained profits despite a small drop in revenues.
The Harrogate-based company attributed its performance to a focus on efficiency and cost control.
Pre-tax profit, before amortisation and exceptional items, stayed at £25.9m, although revenues were 3% lower at £186.6m.
Neil Stothard, chief executive of Vp
Part of those efficiency savings have come from the integration of Brandon Hire. It made the £68m acquisition two years ago and is continuing to improve margins by taking duplicate costs out of that business.
Despite the economic and political uncertainty caused by Brexit and the general election, Vp remains open to opportunities.
In May it bought Sandhurst for £3.3m, a business which specialises in excavator attachments that complements its existing Groundforce piling business.
The group as a whole is looking to maintain its solid performance. Some of its markets have held up reasonably well, such as housebuilding and infrastructure, but there has been some weakness in general construction, especially in the South East.
“We are certainly not battening down the hatches,” said Stothard. “We still feel there will be opportunities in 2020.
“Until the more macro issues are sorted, it’s sensible to assume that growth will be more difficult to deliver.”
Vp is subject to a CMA investigation, which has previously revealed it has found evidence of collusion with two other suppliers of groundwork products.
The process remains ongoing, with Vp hoping to see a positive resolution early next year. But it has entered a £4.5m exceptional item in its accounts, which is the mid-point on what it believes is the possible punishment, if it is found guilty.
