- Company returned to profit in six months to September as sales improved
- Full-year results set to be ahead of board's expectations
Plant hire firm VP (VP.) has put itself up for sale after chairman Jeremy Pilkington told the board his company wished to offload its majority stake.
The 68-year-old company has appointed investment bank Rothschild to find a buyer “who will respect our unique heritage and highly-valued employee base”, VP's chief executive Neil Stothard said in a statement.
Pilkington’s stake is held through a company connected to him, Ackers P Investment. The decision to offload its investment in VP “does not in any way reflect a dissatisfaction with the company or its direction”, he said, adding that it wished to diversify its investments.
A buoyant construction market helped VP to return to profit in the six months to 30 September after a slump in trading a year earlier. The company made a pre-tax profit of £18.6mn as revenue grew 24 per cent to £176mn in the half year. Earlier this month, the company said its full-year results to 31 March were likely to come in ahead of the board’s expectations.
VP's share price jumped 14 per cent to 938p following the announcement, pushing its valuation to 12.3 times broker Berenberg's earnings per share forecast of 76.2p for its most recent financial year. This is ahead of its five-year average valuation of 10.5 times earnings, but any buyer is likely to need to pay a premium for a controlling stake. We upgraded the shares to a buy in January and even after today's share price jump VP trades below the type of multiple that either a private equity or a trade buyer might pay. However, there's no guarantee it will find a buyer at a price its board deems acceptable. Hold.
