23.07.2020

Vp sees positive upward trend

UK rental group Vp, owner of telehandler rental company UK Forks, spider lift specialist Higher Access, low level access company MEP and general rental business Brandon hire, has issued a positive statement prior to holding its virtual Annual General Meeting later today.

Chairman Jeremy Pilkington will say: "In my chairman's statement on 9th June for the year ended 31st March 2020, I commented that both in the UK and internationally the Covid-19 lockdown had had a severe impact on activity levels across most, but not all, our business streams. At the lowest point in April, our revenues were running at around 55 percent of normal levels. In response, we mothballed a number of locations, furloughed employees and initiated a range of other cost saving measures. I am very pleased to report that revenues are now running at over 80 percent of prior year levels driven by increased demand from our core end markets.”

“As demand has returned, over two thirds of furloughed employees have now returned to work and many of the mothballed locations have re-opened. We expect this trend to continue over the coming months.”

“Activity in infrastructure, housebuilding and construction markets is positive and improving, but some areas such as the civil engineering sector have been slower to recover. There are early signs that AMP 7, HS2 and Hinkley Point projects may lead the way in this regard. Cost management has been excellent, and debt has reduced by £22 million since 31st March, to £138 million at the end of June 2020.”

“Whilst many challenges remain, we are positive about the longer term outlook for the business and we look forward to returning towards historic levels of trading during 2021."

Vertikal Comment

It is good to see such positive news and confirms what was becoming increasingly clear – that many rental companies have managed to come through the pandemic crisis in relatively good shape. Thanks to activity continuing - albeit at half their normal levels, but often at better rates, and when combined with government support packages and payment holidays for VAT and business rates etc... it has not been too bad. In fact we know of some that are actually flush with cash for once. The challenge will of course come now as support packages tail off should demand rebound at a slower pace.

However rental companies rely on good suppliers, and manufacturers have not fared as well with rental companies simply ‘switched off the taps’. As business returns rental companies need to consider taking the opportunity to catch up on fleet renewal and perhaps take the opportunity to move further towards environmentally friendly equipment.

Hopefully this is the first of many positive statements from the sector.