Since the Competition and Markets Authority (CMA) publicly announced its investigation into VP (VP.) for suspected anti-competitive behaviour in the groundworks rental market in April, shares in the group have fallen by over a fifth. Setting aside £4.5m in the event of any potential fine, chief executive Neil Stothard says it has otherwise been “business as usual” – adjusted cash profits increased by 20 per cent to £101m for FY2019.
With a full-year contribution from Brandon Hire, the UK business (which accounts for 92 per cent of overall revenue) saw a 29 per cent increase in sales to £350m – 15 percentage points are attributable to the 2017 acquisition. However, lower margins in the new business dampened the group operating margin by 1 percentage point to 14.5 per cent. Given the precarious political and economic climate, slower growth is expected in the UK this year.
Peel Hunt has revised its forecasts downwards, anticipating adjusted pre-tax profit of £53m and EPS of 102.1p for the March 2020 year-end, rising to £57.5m and 110.9p in FY2021.
| VP (VP.) | ||||
| ORD PRICE: | 792p | MARKET VALUE: | £318m | |
| TOUCH: | 792-822p | 12-MONTH HIGH: | 1,230p | LOW: 690p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 420p* | NET DEBT: | 99.6% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 206 | 25.1 | 51.00 | 16.50 |
| 2016 | 209 | 27.5 | 57.50 | 18.85 |
| 2017 | 249 | 30.3 | 60.30 | 22.00 |
| 2018 | 304 | 30.8 | 61.72 | 26.00 |
| 2019 | 383 | 33.6 | 65.20 | 30.20 |
| % change | +26 | +9 | +6 | +16 |
| Ex-div: | 27 Jun | |||
| Payment: | 08 Aug | |||
| *Includes intangible assets of £89.7m, or 223p a share | ||||
