Markets recovery boosts confidence at listed tool rental company
Equipment rental specialist Vp Group says it is confident the recovery in its core markets will accelerate and create a platform for renewed growth.
Issuing a trading update for the period since its interim results were issued on 7 December 2020, the Harrogate-based company adds it has traded in line with its expectations despite economic activity in many areas remaining constrained by Covid restrictions.
Revenues recovered to 95% of pre-Covid levels during the period. In the year, debt has reduced by 22% from £160m at 1 April 2020 to £124m at 31 March 2021.
UK highlights for Vp over the period of the update include the securing of a long-term preferred supply agreement with Balfour Beatty Rail.
The Group has also been increasingly busy supporting contractors on HS2 in both the enabling and construction phases, and a previously announced long-term contract with Network Rail has had a successful first year.
Vp notes trading conditions have been just as volatile for its international business as they have been for its UK operations. But it adds these overseas territories are also recovering well as markets reopen.
Neil Stothard, chief executive, said: “As we have seen specific markets pick up, we have started to invest again in new equipment to meet demand as the latent capacity of the fleet has been drawn back into productive use.
“The timing of some of this investment has been accelerated due to hopefully short-term supply chain challenges for certain products, relating to both Covid-19 and Brexit disruptions.
“As we enter the new financial year, we are pleased to see revenues returning to 95% of pre-Covid levels and this despite some sectors such as events and hospitality remaining closed, infrastructure programmes (such as AMP7 and CP6) not yet fully up to speed and confidence in the general construction market improving but still not fully recovered to pre-Covid levels.
“Our financial position remains strong, having further reduced debt during the period leaving a platform for growth.
“We look forward to reporting another market leading performance in the UK this year and view the next 12 months with increasing confidence.”