29.05.2009

Vp edges up

Vp owner of telehandler rental company UK Forks and rental company Hire Station has reported annual results with increases in both revenues and profits.

The company as a whole reported full year revenues up just one percent to £151 million, while Pre-Tax profits climbed almost five percent to £20.83 million

UK Forks

UK Forks did not fare quite as well, hit as it was by the severe downturn in the UK house building market.

Revenues dropped 18 percent to £13.2 million while operating income dropped by more than 58 percent to £1.2 million. Capital expenditure on the divisions fleet was just £1.3 million, compared to £7.8 million last year. The business also sold £3.9 million of used telehandlers from its fleet.

UK Forks says that non-residential construction represents over 60 percent of its business, but house building remains an important element of its customer mix. Other revenue streams were reasonably resilient although “lower demand resulted in some hire rate attrition.”

The division also achieved ISO9001 and ISO14001 for all of its operating locations during the year.

Hire Station

Revenues at Tool and light equipment rental company Hire Station held up better than the telehandlers with revenues down just over two percent to £55.7 million. The company says that underlying revenues actually improved slightly as 2008 included over £2 million of exceptional flood related rentals.

Operating profits improved, rising over eight percent to £6.4 million. Investment in the rental fleet was down 27 percent to £8.8 million compared to £12 million last year.

The company says that while the first half was very strong the second half was challenging with revenue slipping and a number of bad debts, as a result it has made a number of headcount and expenses cuts, providing around £2 million of savings.
During the year greenfield locations were added in Croydon, Norwich, Poole and Oxford, while 2008 openings in Exeter, Hull and Skipton started to make positive contributions.

TPA

TPA, the supplier of temporary roadways increased its revenues 11 percent to £15.6 million, much of it coming from the electrical transmission market in the UK and Germany. Profits jumped 42 percent to £1.7 million. Investment in the rental fleet was £4 million, compared to £3.5 million in 2008.

Other divisions

Other divisions within the group include: Torrent Trackside, Groundforce and Airpac Bukom Oilfield Services, all of which saw
revenues and profits improve.

Group managing director, Neil Stothard, said: In the year under review, we have seen certain markets slowing down and we anticipate that this general trend will continue into the coming year. The focus of the Group in the near term is to conserve cash, by significantly reducing rental fleet expenditure, tightening working capital management and by negotiating better supply chain arrangements.”

“Opportunities to win business still exist despite the overall condition of the market and we remain as engaged in development as we do in carefully managing the Group through a challenging environment. These actions, together with strength in the balance sheet, should see that the Group remains in good shape and ready to embrace the opportunities for expansion that will undoubtedly arise in the longer term.”

Vertikal Comment

This is a very solid result from Vp, and highlights a lot of the work it has done over the past two years to give the group a better structure and cost base, While it is not in the same league as HSS and Speedy, the company has made good progress and is very conservatively funded, and as such is very well placed to take advantage of the opportunities that are sure to arise in several of its business areas.