08.12.2020

Vp posts loss

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 recorded a first half loss.

Total revenues declined 24 percent to £142.1 million, while last year’s pre-tax profit of £23.3 million compares to a pre-tax loss this year of £6.1 million. Although this does include an additional £13 million of write downs and exceptional costs, while some of this is associated with restructuring charges - including 150 redundancies and the closure of 23 locations - the bulk of it relates to a further accrual for regulatory costs/possible fines and legal costs related to an ongoing anti-competitive behaviour investigation in the UK. See: CMA investigation into Vp

The company did, however, manage to reduce its net debt by 26 percent to £118.7 million, while capital expenditure has been cut 45 percent to £14.6 million.

Chairman Jeremy Pilkington said: "The resilience and diversity of the Vp offering has once again proved to be an invaluable asset as the group and its customers recover from the economic impact of Covid-19. Vp's businesses are gradually recovering towards prior year trading levels, buoyed by the positive medium term outlook for infrastructure investment in the UK. The group remains in excellent financial condition and is well positioned to take advantage of the uplift in demand and return the business to its historic levels of profitability. The board is optimistic but also realistic about prospects for the second half and beyond.”

“On behalf of the board I would like to extend a thank you to all our employees, both within the UK and internationally, for their spirit, hard work and determination in the face of unique challenges and uncertainties."

Vertikal Comment

Vp has been an excellent business in recent years, making savvy bolt on acquisitions and keeping net debt down. But it currently appears to have lost its way a little. The investigation into price fixing at Ground force is dragging on and running up further costs, while hanging over the business. It is a shame the Competition and Marketing Authority cannot reach a conclusion and make a decision, the facts are not likely to become any clearer as time drags on, while the warning to others is diluted as everyone else forgets about it.

Vp is clearly not performing as well as some others such as Sunbelt UK, which is odd as the specialist markets such as telehandlers and spider lifts have been strong.
That said and done Vp remains a good company in good financial shape.