"We are squeezing more out of what we've got," said Jeremy Pilkington, chairman of equipment rental company Vp (VP.) as he announced solid trading and pre-tax profit margins up from 12.5 per cent to 13 per cent. Trading is weighted to the first half so a good start is important for Vp - which is exactly what the company delivered. In fact, with underlying pre-tax profits up 6 per cent to £11m, the board was confident enough to give the half-year dividend a 5 per cent boost.
Mr Pilkington thinks the wider economy is unlikely to improve any time soon, but believes Vp can still deliver as the business is underpinned by growing infrastructure spend in the water and rail industry. Groundforce, the excavation shoring operation, reported revenue up 11 per cent to £18.2m and operating profits up 19 per cent to £4.1m. Profit growth at the rail division, Torrent Trackside, was equally strong, underpinned by a decent spread of activity from maintenance, renewal and London Underground contracts. And both tool-hire division Hire Station and temporary road division TPA reported double-digit profit growth, helped by margin improvements.
The only disappointment came from Airpac Bukom, where profits were down over a third to £1.3m as the Australian gas industry slows, which prompted broker N+1 Singer to shave full-year EPS forecasts by 4 per cent to 31.2p (27.5p in 2012).
VP (VP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 342p | MARKET VALUE: | £137m | |
| TOUCH: | 335-349p | 12-MONTH HIGH: | 355p | LOW: 191p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 246p* | NET DEBT: | 51% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 82.7 | 10.0 | 18.8 | 3.10 |
| 2012 | 84.0 | 10.5 | 21.6 | 3.25 |
| % change | +2 | +5 | +15 | +5 |
Ex-div: 5 Dec Payment: 3 Jan Includes intangible assets of £40m, or 99p a share | ||||
