‘Regrouping and rebuilding’ underway as group begins to bring back 1,400 staff
It will be a year of “regrouping and rebuilding” for tool rental group Vp as it emerges from the Covid-19 lockdown.
Revenues were down 45% at its low point in April and are currently operating at around 30% behind last year. The gap is continuing to close as its core markets, including housebuilding and construction, re-open.
Neil Stothard, chief executive of Vp
“We currently see opportunities for the business in 2021,” said Vp’s chief executive Neil Stothard. “Sadly 2020 is going to be a regrouping and rebuilding year.”
Vp is a specialist rental business operating in the UK and internationally with a focus on the infrastructure, construction, housebuilding and oil and gas markets.
The Harrogate-based business was forced to mothball 100 sites, just over one-third of its UK locations, and at its peak had 1,400 staff furloughed.
It has since begun to re-open branches and take employees out of furlough as demand has slowly recovered.
Stothard acknowledged they “don’t know yet” if all of its furloughed workers will return to the business.
“We don’t know how quick the recovery will be,” he said. “We have got clarity on the furlough scheme until October but at the moment we are matching the capacity requirements we have for the business.”
He is viewing the recovery in two phases. The first, which is underway, is the reopening of existing sites. That will be followed by customers opening new sites, but the expected timeline on that remains no more specific than “in due course”.
Vp on site in Leicester Square, London
The events of the last three months have overshadowed the release of record financial figures for the group.
Pre-tax profits, before amortisation and exceptional items, edged up slightly to a new high of £47.1m. That was achieved despite a 5% reduction in revenues, to £362.9m.
Stothard said: “It’s a different world that we are reporting on today but it’s important to remember what the business is capable of.”
Vp’s share price closed last night at 800p, still 20% below its February level but much improved on the 500p low seen at the start of lockdown. The group has delayed a decision on a dividend until later in the year.
James Tetley, a partner at N+1 Singer, said: “Early signs of recovery are being seen in some markets as lockdown measures ease, but it is too soon for the Group to issue financial guidance.
“Nevertheless, we expect Vp to emerge strongly from the current downturn, noting the group’s excellent track record through previous cycles.”
