Tool hire group well placed for further growth following strong first half
Equipment rental specialist, Vp, has reported a strong performance, particularly in Infrastructure with continued demand from the rail, transmission and water sectors.
Publishing its interim results for the six months ended 30 September 2023, the Harrogate-headquartered business records revenues of £190.9m (H1 2023: £186.5m) and adjusted pre-tax profits of £21.9m (H1 2023: £21.5m)
Vp also says it has a robust balance sheet with a refinance of a £90m Revolving Credit Facility (RCF) secured.
Jeremy Pilkington, chairman, said: “We have delivered a solid performance with continuing sector leading returns in the period reflecting the strength of our diverse business offering.
“We are particularly pleased to have maintained net margin and a strong return on average capital employed, demonstrating high quality of earnings in difficult market conditions.
“Having multiple sector exposure diversifies our revenue streams and has contributed to the robust performance in the period, with infrastructure demand remaining supportive, and whilst there are immediate challenges within general construction, I am confident the actions taken will be of benefit in the medium term.
“The group continues to produce strong operating cash flows and maintains a solid financial base, having refinanced our RCF in November on similar terms for a further three years, and we are well positioned for growth.”
Vp adds that despite the immediate market challenges, particularly in Construction which has been soft and Housebuilding which has been “subdued but stable”, the group continues to make progress and leverage opportunities in its specialist markets.
It notes the Government’s recent announcements about scrapping the HS2 rail link should not impact short-term business performance.
Vp says lost HS2 opportunities should, in part, be replaced by activity from alternative rail initiatives.
CEO Anna Bielby added the group was making continued progress on Environmental Social Governance (ESG) and on its digital capabilities.
And she said the latest national figures on inflation and interest rates have given grounds for optimism.
“We have a strong balance sheet and we’re well positioned for growth,” she said.
“Our markets have been mixed with infrastructure performing really strongly and the construction sector proving more challenging, but the diverse nature of our business model means we could still deliver these good results.
“With HS2, while it is disappointing when projects of that scale are cancelled, our own rail based revenues aren’t too dependent on large scale infrastructure projects, so we do still see plenty of other opportunities around rail.”