In the year to 31st March 2019, Vp plc grew pre-tax profit by 9% to £33.6m (2018: £30.8m) on revenue up 26% to £382.8m (2018: £303.6mn)
Profit before tax, amortisation and exceptional items reached a record level of £46.8m (2018: £40.6m).
During the year, Vp incurred £8.6m (2018: £1.7m) of exceptional costs in relation to regulatory review costs, the integration of the Brandon with Hire Station, and restructuring costs in relation to severance payments and depot closure costs within Hire Station and Airpac.
Vp is one of three suppliers of temporary groundworks equipment that is under investigation by the Competition & Markets Authority (CMA). The CMA reached a provisional determination in April that the three had breached competition law. Vp said it was cooperating with the CMA and is unable to predict what the outcome might be. “However, accounting standard IAS 37 requires us to provide an amount in these accounts and accordingly we have included a figure of £4.5m as an exceptional cost,” said chairman Jeremy Pilkington. “This figure is in the arithmetic midpoint of a range of possible outcome (£0 to £9.0m) that we have calculated based upon previous cases and CMA published guidance and without any admission of culpability.”
If the CMA investigation is a low point for Vp, the Brandon integration appears to be a high.
“Following the acquisition of Brandon Hire in November 2017, the integration process has progressed well and will be largely concluded by the end of this calendar year,” Jeremy Pilkington said. “The combined business now trades as Brandon Hire Station. Integrating 1,500 people, 200 branches and 200,000 items of rental equipment has been a huge task for both management teams and it is appropriate for me to single them out for special praise for their exceptional work this year. The combined business has traded in line with our expectations at the time of the acquisition and we are confident that Brandon Hire Station will deliver significant benefits for the group and its shareholders.”
Chief executive Neil Stothard added: “Whilst the construction markets within which Brandon Hire Station operates have been relatively flat, synergies identified pre and post the acquisition have already been delivered, and margins and returns have improved considerably as a result. The longer term fleet refreshment programme has proceeded well with strong capex combined with a pro-active divestment programme of old and non-core hire fleet items.”
Since the year-end, on 10th May 2019 Vp announced the acquisition of attachments hire firm Sandhurst for £3.325m.
Neil Stothard concluded: "Vp has started the new financial year positively and in line with our expectations. We anticipate that our main markets in the UK will continue to be supportive, but with slightly slower overall growth than experienced in recent years influenced by the current political and economic uncertainty.”
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