29.11.2011

UK Forks up 26 percent

UK Forks the telehandler rental company, owned by Vp, has reported a strong first half in terms of revenues and profits.

Focusing on the telehandler business first - UK Forks – revenues improved by 26 percent to £6.5 million, while operating profit jumped almost 75 percent to £1.01 million.

Vp chairman Jeremy Pilkington said: The turnaround in performance at UK Forks began in the first half of 2010 and has pleasingly continued since. Both revenues and profitability are substantially ahead of the prior year period. Whilst the general construction market remains quiet, house building has rebounded, albeit from a severely reduced base, and remains a positive sector for us. Machine utilisation has recovered to a level where we have committed new investment, continuing the recovery towards a pre-recession sized hire fleet. Prices from manufacturers have escalated significantly since we last added to the rental fleet and hire rates have had to move upwards in order to protect levels of return on investment. The prospects for UK Forks in the second half of the financial year remain positive.”

The company’s general rental business which also deals in access equipment – Hire Station- saw revenues climb by 12 percent to £29.3 million, but operating profit fell around 15 percent to £1.46 million.

Group revenues grew by 18 percent to £84 million while pre-tax profits jumped 21 percent to £10.4 million. During the first half the company almost doubled its capital expenditure from £8.9 million in the first half of 2010 to £15.9 million this year. The extra investment took net debt to £43.4 million - £2.9 million higher than a year ago.

Commenting on the group result, Pilkington, said: "I am pleased to report an outstanding set of results demonstrating strong revenue and profit growth along with excellent cash generation. The impact of individual sector weaknesses continues to be mitigated through the diversity of the group's activities, a strong balance sheet and significant investment into growth opportunities."

Vertikal Comment

This is without question a very strong result for Vp’s telehandler business and a strong group result for what is, these days, a very conservatively managed company.

It is also a good indication that in spite of the gloomy headline news the real economy in the UK is more buoyant than one might think. Vp is also another company that is increasing its rental rates in the face of strong utilisation and rising equipment prices – exactly what should happen. Hopefully smaller companies will follow the lead, set now my most of the publicly owned rental companies on both sides of the Atlantic, and increase their rental rates.