Home continued to be at the heart of progress for rental equipment provider Vp (VP.) during the first half. The scale of its UK operations increased via two acquisitions during the period, and two more in November, including its £42m purchase of tool hire specialist Brandon Hire. Chairman Jeremy Pilkington says the latter business has very little crossover with VP’s existing customer base, catering more to regional small and medium-sized companies via its 143 branches. But Mr Pilkington expects synergy benefits over time.
UK operating profits before amortisation were up 14 per cent to £22m. In April, Vp bought mechanical and electrical equipment provider Jackson Mechanical Services and safety equipment specialist Zenith for respective considerations of £3.6m, and £3.9m plus acquired debt. Specialist forklift rental business First National, which was acquired in November, will be integrated into its UK forks business. It also increased investment in its rental fleet by 9 per cent to £32.5m.
Business was patchier internationally. Its Airpac Bukom operation, which provides steam powered machinery to the oil and gas industries, continued to suffer due to contract delays. However, Mr Pilkington says inquiries have picked up during the second half, helped by the rise in the oil price. The international business accounted for just 12 per cent of revenue during the period.
Analysts at broker Peel Hunt expect adjusted pre-tax profits of £38.5m during the 12 months to March 2018, giving EPS of 77.4p, (up from £34.9m and 67.6p in 2017).
| VP (VP.) | ||||
| ORD PRICE: | 915p | MARKET VALUE: | £368m | |
| TOUCH: | 903-930p | 12-MONTH HIGH: | 915p | LOW: 711p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 369p* | NET DEBT: | 78% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 122 | 17.7 | 35.9 | 6.0 |
| 2017 | 136 | 20.3 | 42.5 | 6.8 |
| % change | +11 | +15 | +18 | +13 |
| Ex-div: | 30 Nov | |||
| Payment: | 05 Jan | |||
| *Includes intangible assets of £50m, or 125p a share | ||||
