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Wed July 08 2020

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Vp profit falls 14%

11 Jun Construction plant and equipment hire group Vp has posted its financial results for the year to 31st March 2020 showing a dip in revenue and profits.

Vp's Groundforce business saw a small increase in revenues last year
Vp's Groundforce business saw a small increase in revenues last year

Profit before tax was down 14% to £28.8m (2019: £33.6m) on revenues down 5% to £362.9m (2019: £382.8m).

EBITDA before exceptional items was down 3% to £98.1m (2019: £101.4m).

The results were impaired by exceptional costs of £1.5m (2019: £8.6m) resulting from business restructuring and regulatory review costs. The  latter includes an ongoing investigation by the Competition & Markets Authority into suspected anti-competitive behaviour within the temporary groundworks sector, including Vp’s Groundforce business. 

Vp’s UK businesses comprises seven main units: UK Forks, Groundforce, TPA, Brandon Hire Station, ESS Safeforce, MEP and Torrent Trackside.

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After the end of the financial year, when the Covid-19 lockdown took effect, most divisions saw weekly revenues fall between 20% and 70%. “Trading in April was very weak, May has improved and we anticipate there will be a slow, incremental recovery over the coming months,” said chief executive Neil Stothard.

"The Group took decisive action to control costs at the start of the pandemic including stopping all but essential recruitment and capital expenditure. We kept many of our operating locations open for business throughout, in support of those critical sectors requiring our services, we initially mothballed some sites and participated in the government's job retention scheme, furloughing approximately half of our UK employees at the peak in April. We have since re-opened branches and taken employees out of furlough as demand has slowly recovered.  The international division has also been impacted with different countries feeling different effects of the pandemic.

"We have strengthened further our financial position by conserving cash; reducing costs and delaying the dividend.  We believe that this will help ensure the long-term resilience of the business as well as its capability to respond quickly as markets recover.  Vp is fundamentally sound, and is built on over 60 years of successful development.  A combination of supporting a diversity of markets across a range of geographies together with a strong financial discipline and an excellent team will help us to quickly re-position the business and allow us to embrace the fresh but increasingly positive challenges that the next 12 months will hold."

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