Mixed statement from Vp
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 trading statement but also announced depot closures and layoffs.
The company says that it is now operating at around 85 percent of pre-Covid levels, and that it has reduced its net debt by 26 percent from £41 million to £118.7 million. It also states that although it has reopened 100 of the 120 depots that it closed that it will now permanently close 17 of the remaining locations and lay off around 150 employees.
The full trading statement is carried below.
Over recent months the group has continued to focus on rebuilding business activity back to pre-Covid levels, whilst at the same time giving top priority to the health and wellbeing of our colleagues, customers and other stakeholders.
Group revenues have continued to improve, although the initial impact from the re-opening of existing sites has slowed and the business has become more reliant on new projects starting. Group revenues are now running at circa 85 percent of pre-Covid levels.
In response to the downturn in trading, the group initially mothballed about 120 locations but we are pleased to report that over 100 of those are once again fully operational and are responding to the growing demand from our customer base as they themselves have returned to work.
However, the re-alignment of capacity to better reflect current levels of demand has required us to merge or close 17 branches and regrettably make approximately 150 positions redundant across our various businesses, in the UK and internationally. The costs of these branch closures and the redundancies will be recognised as an exceptional charge in the current financial year ending 31 March 2021.
The group has continued to demonstrate excellent cash management and net debt has reduced further to £118.7 million at 30 September 2020, which compares with £159.7 million at 31 March 2020, an improvement of £41.0 million. A sustained period of strong cost control, reduced capital expenditure and excellent working capital management has delivered this impressive net debt improvement.
Markets are generally stable and infrastructure work, in particular, should be supportive as the likes of the AMP7, HS2 and Hinkley Point programmes start to gain momentum. We do however remain slightly cautious with regard to the short to medium term prospects as we await evidence of a recovery in confidence and the commencement of new projects. In addition we also remain conscious of the fact that the Covid pandemic is yet to be fully under control.
The longer term outlook for the group remains positive and we are proactively identifying organic growth opportunities, focused particularly within those of our businesses already achieving pre-Covid levels of trading.
We would also like to take this opportunity to thank all of our colleagues for the strenuous efforts that they have made over recent months under the most challenging and unusual circumstances.