04.06.2013

Profits up 7.5% at Vp

Vp, owner of telehandler rental company UK Forks, general rental company Hire Station and TPA the ground protection specialist, has issued its final results for 2012/2013.

UK Forks achieved revenues of £14.1 million, up 12.5 percent on last year, while operating income jumped almost 45 percent to £2.1 million. Capital expenditure in the year was just £400,000 down from £8.6 million in the prior year.

The company statement for UK Forks said: “We have maintained our construction customer base and have benefited from growth within the national and regional house builders. Further progress has also been made in other market sectors, such as infrastructure.”

“Hire revenue growth of 12 percent on the previous year is at the core of the strong divisional performance. Hire rates remain competitive, but despite this we have secured improvements from our long standing customer base, who continue to value our commitment to excellent customer service, high quality equipment and outstanding backup.”

General and tool rental company Hire Station achieved record revenues, up almost four percent to £62 million, while operating profit improved 30 percent. Capital expenditure was up 14 percent to £9.4 million.

TPA the company that provides ground cover mats and tracks in the UK and Germany saw a slight improvement in revenues to £14.9 million two percent up on the year, while operating profits increased over eight percent to £1.3 million.

The group as a whole which also includes Ground force and Torrent Trackside saw revenues increase three percent to £167 million, while pre-tax profits improved 7.5 percent to £16.4 million. Total capital investment fell 30 percent to £22.5 million, while fleet disposals increased almost 30 percent to £9.4 million although the company spent over £4 million on small ‘bolt-on’ acquisitions during the year.

Group chairman Jeremy Pilkington said: "The group has delivered another strong performance with increased profits, margins and return on capital employed. Whilst the economic background still contains significant uncertainties and challenges, this set of results again demonstrates the group's ability to continue to deliver value for shareholders even within a relatively unsupportive trading environment.”

"Each of our businesses continues to work hard to uncover opportunities for investment and growth and we believe that the group has positive momentum moving into the new financial year. We look forward to another year of progression as we maintain our focus on delivering consistent, quality and sustainable returns over the long term."

Vertikal Comment

‘Steady as she goes’ would summarise these numbers, Vp continues to build a solid profitable business focussed on the long term and taking a conservative approach that is more akin to a German company than a typical British/American model.

The reason for this is that the company, while public, is family controlled and as Vibroplant it had more than its fair share of adventures and managed to survive to do things differently.

The company is building a very solid base in tool hire, as well as holding its position in the telehandler market. Although its very careful approach probably means that it is losing some market share to more aggressive players such as Fork Rent and larger regional companies.

With Ashtead having recently acquired Eve Trakway the market for ground cover solutions, which are widely used for cranes and large platforms, as well as events, is hotting up. Providing new opportunities and risks for TPA.

While this is an excellent set of numbers in every way Vp risks being overly cautious with its expenditure, whether that be fleet investments or marketing etc... Although better this than the short term highly indebted chancers that come and go.