13.06.2023

Six percent growth at Vp

UK rental group Vp, owner of telehandler rental company UK Forks, low level access specialist MEP and Brandon Hire Station has reported its full year results.

Total group revenues increased six percent to £371.5 million with growth coming from both the UK and the small overseas operations. However, pre-tax profits declined 14 percent to £30.7 million. Capital expenditure for the year was flat - declining in the UK, but made up by higher expenditure on the International division.

UK division
The UK business saw revenues increase four percent to £333.4 million, with an operating income improving three percent to £42.9 million. Capital expenditure declined three percent from £55.2 to £53.6 million.
The company said: “UK Forks made further progress in the year with modest revenue growth but good year on year profit growth. UK Forks encountered the same cost inflation challenges as elsewhere in the group and management protected margin through a combination of increased hire rates, keen asset management, including disposing of surplus equipment, and strong control over spares and overhead costs.” The company added that the telehandler fleet ended the year six percent larger than at the start.

International division
Total revenues from its modest international operation improved 24 percent to £38.1 million, while operating profit more than doubled to £3.11 million. Capital expenditure was increased 37 percent to £6.3 million.

Chairman Jeremy Pilkington said: "We are pleased to report another solid year of trading with good progress made across all key metrics, with the group successfully navigating a highly volatile macroeconomic backdrop. The group's return on average capital employed of 14.4% continues to demonstrate our excellent quality of earnings and resilience in times of supply chain disruption and slowing growth in some markets.”

Chief executive Neil Stothard added: "Despite the macro economic conditions that continue to impact some of our core markets, we are pleased that our performance has remained consistent and in line with the board's expectations. Our revenue rose by 6% during the year to £371.5 million, providing some comfort that the group can progress in a challenging market. The increase was driven both by improving trading conditions in our international businesses, particularly in South East Asia, Australia and New Zealand, and in addition to good progress made in the UK and Europe.”

Vertikal Comment

This is not exactly an exciting result from Vp, and given inflation rate, is negative in terms of real growth. The overseas improvement is encouraging though, with the fleet investment indicating a greater commitment to this part of the business.

Vp is an excellent business, but perhaps has become a tad over cautious, focusing more on squeezing out higher yields, rather that continuing to build the business. Possibly driven by the attempt to sell the business which it launched at the start of the fiscal year?

Hopefully this will all change as the current year progresses.