28.11.2009

Vp slips 16%

Vp, owner of UK Forks, TPA and Hire Station, has announced its interim results
For the six months to the end of September. Revenues were £71.1 million a fall of 16 percent on the same period last year.

At the same time the company posted a pre-tax profit of £10 million 29 percent lower than for the first half of 2008. The company says that all sectors of its business were cash positive, allowing it to generate enough cash to cut its net debt by 17 percent to £55 million and pay a 3.1p per share dividend.

UK Forks, one of the UK’s largest telehandler rental companies, saw its revenues fall 44 percent to £5.7 million, resulting in an operating loss of £300,000 compared to a profit of £1.5 million in the same period lat year.

Vp says that it cut its net capital investment from £13.2 million last year to just £2.4 million for the first six months of this year, none of which was spent on telehandlers. At the same time it raised £5 million from fleet sales.

Chairman Jeremy Pilkington, said: “We are pleased to report very satisfactory results in such a challenging business environment. Whilst we do see some further downward pressure and uncertainty in specific markets, we believe
that the diversity of the Group's activities and our financial strength will enable us to emerge from this downturn in a strong position. We are confident in the Group's ability to capitalise on current and future opportunities.”

Vertikal Comment

This is an exceptional result given the numbers we see from the larger rental companies on both sides of the Atlantic. Vp has taken a very careful and conservative approach to its growth and indebtedness in recent years, largely due to the fact that the Pilkington family have held a controlling interest in the business and could ignore the pressures from big investors to take on more debt and grow at any costs when times were good.

Vp should come through the recession in excellent shape and likely to continue its policy of snapping up good local businesses to infill its market coverage. Its product mix should also bounce back sooner than those companies that focus heavily on commercial construction.