TIDMVP.
Press Release 26 November 2013
Vp plc
("Vp" or the "Group" or the "Company")
Interim Results
Vp plc, the equipment rental specialist, today announces its Interim
Results for the six months ended 30 September 2013.
Highlights
Profit before tax and amortisation increased 17% to
-- GBP12.8 million (2012: GBP11.0 million)
Revenues of GBP91.3 million, 9% ahead (2012: GBP84.0
-- million)
Return on capital employed 13.9% (2012: 13.2%)
--
Profit margins improved once again to 14.0% (2012:
-- 13.0%)
Capital investment in rental fleet 46% higher than
-- the prior year at GBP18.3 million
Acquisitions of GBP4.6 million
--
Interim dividend increased to 3.6 pence per share
--
Solid balance sheet with strong operational cash flow
--
Jeremy Pilkington, Chairman of Vp plc, commented:
"The Group has produced another excellent set of results with profits,
margins, return on capital and earnings per share all strongly ahead.
Substantial capital investment in the rental fleet and the acquisition
of Mr Cropper in September demonstrates our confidence in the
opportunities for growth. The Board believes the Group is very well
placed to continue to deliver further progress for the year as a whole
and beyond."
- Ends -
Enquiries:
Vp plc
Jeremy Pilkington, Chairman Tel: +44 (0) 1423 533 405
jeremypilkington@vpplc.com
Neil Stothard, Group Managing Director Tel: +44 (0) 1423 533 445
neil.stothard@vpplc.com
Allison Bainbridge, Group Finance Director Tel: +44 (0) 1423 533 445
allison.bainbridge@vpplc.com www.vpplc.com
Media enquiries:
Abchurch Communications
Sarah Hollins / Shabnam Bashir / Jamie Hooper Tel: +44 (0) 20 7398 7719
jamie.hooper @abchurch-group.com www.abchurch-group.com
CHAIRMAN'S STATEMENT
I am very pleased to report another set of excellent results for the six
months to 30 September 2013. Profit before tax and amortisation
increased by 17% to GBP12.8 million (2012: GBP11.0 million) on revenues
ahead by 9% at GBP91.3 million (2012: GBP84.0 million). Return on
capital employed improved to 13.9% (2012: 13.2%) and profit margins
improved once again to 14.0% (2012: 13.0%). Basic earnings per share
rose to 25.73 pence (2012: 21.63 pence).
Although uncertainties and challenges remain, we have seen a notable
improvement in sentiment in certain key market sectors in the UK,
particularly within residential and infrastructure investment. This has
contributed to the significantly improved performances at Groundforce,
UK Forks and Hire Station as reviewed in more detail below.
The scale of opportunities is reflected in the capital investment in
rental fleet which was over 46% higher than the prior year at GBP18.3
million. We also completed the acquisition of Mr Cropper, the UK's
leading pile cropping rental company, in September 2013 for a
consideration of GBP4.6 million. Strong operating cash flow absorbed
this investment whilst holding period end net borrowings to GBP56
million (2012: GBP50 million).
Your board is declaring the payment of an increased interim dividend of
3.6 pence per share (2012: 3.25 pence per share) payable on 3 January
2014 to shareholders on the register as at 6 December 2013.
Review of Operations
Groundforce
Groundforce delivered another strong result with operating profits more
than 12% ahead at GBP4.6 million (2012: GBP4.1 million) on revenues of
GBP20.8 million (2012: GBP18.2 million). Pleasingly this performance
was based on solid contributions from across the product range and all
regions of the UK. Once again, we benefitted from the water companies'
AMP5 work programmes as they gathered further momentum.
Our European activity has developed in line with expectations and whilst
still relatively small, it continues to make progress and the future
prospects that exist for this business remain promising.
Mr Cropper, the pile breaker rental business acquired at the beginning
of September 2013, has been successfully integrated within the division
and has delivered very satisfactory results in its first two months of
trading.
UK Forks
UK Forks delivered an excellent performance with profits 59% ahead of
last year at GBP1.5 million (2012: GBP1.0 million), on revenues 20%
ahead at GBP8.4 million (2012: GBP7.0 million). The business has
experienced strong and sustained demand, particularly from residential
construction and we have made further significant investment in growing
the rental fleet in response to high levels of utilisation.
Whilst the market remains competitive, particularly amongst the larger
customers, we see further opportunities for growth especially as the
volume of residential completions progresses back towards more normal
historic levels.
Airpac Bukom
As anticipated, but disappointingly, profits at Airpac Bukom reduced to
GBP0.7 million (2012: GBP1.3 million) on revenues flat at GBP9.6 million
(2012: GBP9.6 million).
The quieter trading conditions experienced by Airpac Bukom in the
previous financial year continued into the first quarter with delays to
Liquefied Natural Gas ("LNG") projects in the Asia Pacific region and
subdued demand from the North Sea fabric maintenance market, further
exacerbated by the safety related helicopter groundings. Pleasingly
however, we saw a much improved trend into the second quarter with
trading levels recovering strongly. With an improved outlook in LNG
related activity and stronger trading generally, we expect the business
to maintain this improving trend.
Torrent Trackside
Torrent Trackside delivered profits of GBP1.5 million (2012: GBP1.7
million) on revenues relatively flat at GBP10.6 million (2012: GBP10.5
million) and whilst there has been a small reduction in margin, trading
levels remain positive moving into the second half of the year.
Network Rail's procurement processes are being restructured in advance
of the new five year investment programme (CP5) which commences in April
2014. We are fully engaged with this process and are well placed to
support the successful contractors.
With the rail market continuing to attract sustained investment,
Torrent's market leading offer places the business in a strong position
to make further progress.
TPA
Profits at TPA improved 7% to GBP2.7 million (2012: GBP2.5 million) on
revenues marginally ahead at GBP9.8 million (2012: GBP9.5 million).
Demand from transmission upgrade work and a strong performance from the
European activity contributed to this result. Within the UK, careful
contract selection in the events market and robust cost management has
delivered further improvements in margins. In Germany, the transmission
and wind power sectors have, as anticipated, recovered well in the first
half of the year.
Hire Station
Hire Station produced excellent first half results with profits 59%
ahead at GBP2.7 million (2012: GBP1.7 million) on revenues up 9% at
GBP31.9 million (2012: GBP29.3 million).
All sectors of the business; Tools, ESS Safeforce and MEP, reported
improved profits.
The tool business has responded positively to growth and margin
initiatives, with the branch network continuing to be strengthened. ESS
Safeforce has enjoyed a buoyant first half, with ongoing capital
investment to support strong demand. MEP has extended its branch
network to improve national coverage and expanded its product offering.
Outlook
These are an excellent set of results which reflect the ability of an
outstanding team to cope equally well with challenges and opportunities.
Everyone in the Group should be justifiably proud of their achievement.
With sentiment in certain key sectors of the UK economy improving and
with some of the wider structural threats receding, we believe the Group
is very well placed to continue to deliver further progress for the year
as a whole and beyond.
Jeremy Pilkington
Chairman
26 November 2013
Condensed Consolidated Income Statement
For the period ended 30 September 2013
Six months to 30 Six months to 30 Full year to
Note Sep 2013 Sep 2012 31 Mar 2013
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Revenue 3 91,253 84,021 167,034
Cost of sales (65,378) (60,214) (124,791)
Gross profit 25,875 23,807 42,243
Administrative
expenses (12,677) (11,898) (23,377)
Operating profit 3 13,198 11,909 18,866
Net financial
expenses (931) (1,368) (2,464)
Profit before
amortisation and
taxation 12,794 10,963 17,351
Amortisation of
intangibles (527) (422) (949)
Profit before
taxation 12,267 10,541 16,402
Income tax expense 4 (2,206) (2,196) (3,353)
Net profit for the
period 10,061 8,345 13,049
Basic earnings per
share 7 25.73p 21.63p 33.62p
Diluted earnings
per share 7 23.55p 19.96p 30.84p
Dividend per share 8 3.60p 3.25p 12.25p
Interim dividends
proposed / paid
(GBP000) 1,439 1,278 1,278
Final dividend
paid (GBP000) 3,520 3,159 3,159
Condensed Consolidated Statement of Comprehensive Income
For the period ended 30 September 2013
Six months Six months Full year
to to to
31 Mar
30 Sep 2013 30 Sep 2012 2013
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Profit for the period 10,061 8,345 13,049
Other comprehensive income:
Items that will not be reclassified to profit or loss
Actuarial gains on defined benefit pension scheme - - 697
Tax on items taken direct to equity - - (166)
Impact of tax rate change (86) (52) (42)
Foreign exchange translation difference (100) (166) 45
Items that may be subsequently reclassified to profit
or loss
Effective portion of changes in fair value of cash
flow hedges 480 183 196
Other comprehensive income 294 (35) 730
Total comprehensive income for the period 10,355 8,310 13,779
Condensed Consolidated Statement of Changes in Equity
For the period ended 30 September 2013
Six months Six months Full year
to to to
31 Mar
30 Sep 2013 30 Sep 2012 2013
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Total comprehensive income for the period 10,355 8,310 13,779
Tax movements to equity 1,383 795 1,258
Impact of tax rate change (80) (10) (42)
Share option charge in the period 904 781 1,225
Net movement relating to Treasury Shares and shares
held by Vp Employee Trust (613) 1,170 (1,922)
Dividends to shareholders (3,520) (3,159) (4,437)
Change in equity during the period 8,429 7,887 9,861
Equity at the start of the period 100,922 91,061 91,061
Equity at the end of the period 109,351 98,948 100,922
Condensed Consolidated Balance Sheet
At 30 September 2013
31 Mar
Note 30 Sep 2013 2013 30 Sep 2012
(unaudited) (audited) (unaudited)
GBP000 GBP000 GBP000
Non-current assets
Property, plant and equipment 5 117,883 110,577 114,474
Goodwill 6 35,575 33,989 33,989
Intangible assets 6 6,053 5,290 5,817
Employee benefits 268 80 -
Total non-current assets 159,779 149,936 154,280
Current assets
Inventories 5,508 5,679 5,223
Trade and other receivables 45,139 33,256 36,336
Cash and cash equivalents 4,858 8,712 5,932
Total current assets 55,505 47,647 47,491
Total assets 215,284 197,583 201,771
Current liabilities
Interest bearing loans and
borrowings (50) (24,000) (26,000)
Income tax payable (2,565) (1,539) (2,748)
Trade and other payables (37,561) (34,838) (36,798)
Total current liabilities (40,176) (60,377) (65,546)
Non-current liabilities
Interest bearing loans and
borrowings (61,003) (30,000) (30,000)
Employee benefits - - (827)
Deferred tax liabilities (4,754) (6,284) (6,450)
Total non-current liabilities (65,757) (36,284) (37,277)
Total liabilities (105,933) (96,661) (102,823)
Net assets 109,351 100,922 98,948
Equity
Issued capital 2,008 2,008 2,309
Capital redemption reserve 301 301 -
Share premium 16,192 16,192 16,192
Hedging reserve (314) (794) (807)
Retained earnings 91,137 83,188 81,227
Total equity attributable to equity
holders of parent 109,324 100,895 98,921
Minority interest 27 27 27
Total equity 109,351 100,922 98,948
Condensed Consolidated Statement of Cash Flows
For the period ended 30 September 2013
Six months Six months Full year
Note to to to
31 Mar
30 Sep 2013 30 Sep 2012 2013
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Cash flows from operating activities
Profit before taxation 12,267 10,541 16,402
Adjustment for:
Pension fund contributions in excess of service cost (188) (219) (429)
Share based payment charges 904 781 1,225
Depreciation 5 10,833 10,396 21,173
Amortisation of intangibles 527 422 949
Net financial expense 931 1,368 2,464
Profit on sale of property, plant and equipment (1,305) (1,301) (2,569)
Operating cash flow before changes in working capital
and provisions 23,969 21,988 39,215
Decrease / (increase) in inventories 208 (340) (796)
(Increase)/decrease in trade and other receivables (10,279) (1,339) 1,741
Decrease in trade and other payables (300) (1,745) (401)
Cash generated from operations 13,598 18,564 39,759
Interest paid (990) (1,394) (2,504)
Interest received 7 9 20
Income tax paid (1,749) (1,551) (3,809)
Net cash from operating activities 10,866 15,628 33,466
Investing activities
Proceeds from sale of property, plant and equipment 4,144 3,936 9,609
Purchase of property, plant and equipment (17,157) (15,149) (29,635)
Acquisition of businesses (net of cash and overdrafts) (4,503) (4,117) (4,117)
Net cash from investing activities (17,516) (15,330) (24,143)
Cash flows from financing activities
Purchase of Treasury Shares and own shares by Employee
Trust (613) (6,675) (9,767)
Repayment of loans (54,000) (3,000) (5,000)
New loans 61,000 13,000 13,000
Payment of hire purchase and finance lease liabilities - (1) (1)
Dividends paid 8 (3,520) (3,159) (4,437)
Net cash used in financing activities 2,867 165 (6,205)
Net (decrease)/increase in cash and cash equivalents (3,783) 463 3,118
Effect of exchange rate fluctuations on cash held (71) (113) 12
Cash and cash equivalents at beginning of period 8,712 5,582 5,582
Cash and cash equivalents at end of period 4,858 5,932 8,712
Notes to the Condensed Financial Statements
1. Basis of Preparation
Vp plc (the "Company") is a company domiciled in the United Kingdom.
The Condensed Consolidated Interim Financial Statements of the Company
for the half year ended 30 September 2013 comprise the Company and its
subsidiaries (together referred to as the "Group").
This interim announcement has been prepared in accordance with the
Disclosure and Transparency Rules of the UK Financial Services Authority
and the requirements of IAS34 ("Interim Financial Reporting") as adopted
by the EU. The accounting policies applied are consistent for all
periods presented and are in line with those applied in the annual
financial statements for the year ended 31 March 2013, which were
prepared in accordance with International Financial Reporting Standards
("IFRS") as adopted by the EU.
The interim announcement was approved by the Board of Directors on 25
November 2013.
The Condensed Consolidated Interim Financial Statements do not include
all the information required for full annual Financial Statements.
The comparative figures for the financial year ended 31 March 2013 are
extracted from the Company's statutory accounts for that financial year.
Those accounts have been reported on by the Company's auditor and
delivered to the Registrar of Companies. The report of the auditor was
(i) unqualified, (ii) did not include a reference to any matters to
which the auditor drew attention by way of emphasis without qualifying
their report, and (iii) did not contain a statement under section 498
(2) or (3) of the Companies Act 2006.
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based
on historical experience and various other factors that are believed to
be reasonable under the circumstances; these form the basis of the
judgements relating to carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the
revision affects both current and future periods.
As stated in the year end accounts, the Group continues to be in a
healthy financial position. Since the year end net debt has increased by
GBP10.9 million to GBP56.2 million. The Group's total banking
facilities are GBP70 million, including an overdraft facility. The
Board has evaluated these facilities and the associated covenants on the
basis of current forecasts, taking into account the current economic
climate and an appropriate level of sensitivity analysis. On this basis
the Directors have a reasonable expectation that the Group has adequate
resources to continue in operation for the foreseeable future and to
manage its business risks. For this reason the going concern basis has
been adopted in the preparation of these financial statements.
2. Risks and Uncertainties
There are a number of risks and uncertainties which could have a
material impact on the Group's performance.
The principal risks faced by the Group, and the activities undertaken to
mitigate them, as at 31 March 2013 were set out on page 25 of the 31
March 2013 Financial Statements. Nothing has occurred since these
Financial Statements were published to change the Group's view on these
risks. The Group's exposure to risk is therefore considered by the Board
to be within normal parameters and represents an acceptable level of
risk.
3. Summarised Segmental Analysis
Revenue Operating Profit
Sept 2013 Sept 2012 Sept 2013 Sept 2012
GBP000 GBP000 GBP000 GBP000
Groundforce 20,818 18,197 4,628 4,123
UK Forks 8,408 7,022 1,518 957
Airpac Bukom 9,646 9,560 679 1,315
Torrent Trackside 10,633 10,452 1,487 1,709
TPA 9,826 9,518 2,707 2,529
Hire Station 31,922 29,272 2,706 1,698
91,253 84,021 13,725 12,331
Amortisation (527) (422)
13,198 11,909
4. Income Tax
The effective tax rate of 18.0% in the period to 30 September 2013 (30
September 2012: 20.8%) is made up of two elements. Firstly, an estimated
underlying tax rate of 22.4% (30 September 2012: 23.8%) which reflects
the current standard rate of tax of 23%, as adjusted for estimated
permanent differences for tax purposes offset by gains covered by
exemptions. Secondly there is a release of GBP0.5m (4.4%) from the
deferred tax balance as a result of the enacted changes in the future UK
corporation tax rate from 23% to 20% in future periods.
5. Property, Plant and Equipment
Sept 2013 Sept 2012 Mar 2013
GBP000 GBP000 GBP000
Carrying amount 1 April 110,577 110,680 110,680
Additions 19,542 14,085 25,285
Acquisitions 1,458 2,798 2,798
Depreciation (10,833) (10,396) (21,173)
Disposals (2,839) (2,635) (7,040)
Effect of movements in exchange rates (22) (58) 27
Closing carrying amount 117,883 114,474 110,577
The value of capital commitments at 30 September 2013 was GBP10,010,000
(31 March 2013 GBP2,943,000).
6. Goodwill and intangibles
On 3 September 2013 Vp plc acquired the share capital of Mr Cropper
Limited for GBP4.6 million and the business and net assets of the
acquired company have been transferred to Vp plc. The acquisition has
been consolidated into these results using provisional completion
figures. On this basis the fair value of net assets acquired was GBP3.0
million including intangibles of GBP1.3 million leaving goodwill of
GBP1.6 million.
7. Earnings Per Share
Earnings per share have been calculated on 39,104,381 shares (2012:
38,579,093 shares) being the weighted average number of shares in issue
during the period. Diluted earnings per share have been calculated on
42,730,495 shares (2012: 41,810,258 shares) adjusted to reflect
conversion of all potentially dilutive ordinary share options. Basic
earnings per share before the amortisation of intangibles was 26.77
pence (2012: 22.46 pence) and was based on an after tax add back of
GBP406,000 (2012: GBP321,000). Diluted earnings per share before
amortisation of intangibles was 24.49 pence (2012: 20.73 pence).
8. Dividends
The Directors have declared an interim dividend of 3.60 pence (2012:
3.25 pence) per share payable on 3 January 2014 to shareholders on the
register at 6 December 2013. The dividend proposed at the year end was
subsequently approved at the AGM in July and GBP3,520,000 was paid in
the period (2012 paid: GBP3,159,000). The cost of dividends in the
Statement of Changes in Equity is after adjustments for the interim and
final dividends waived by the Vp Employee Trust in relation to the
shares it holds for the Group's share option schemes.
9. Analysis of Net Debt
As at Cash Acquisition As at
1 Apr 13 Flow 30 Sep 13
GBP000 GBP000 GBP000 GBP000
Cash in hand and at bank less
overdrafts 8,712 (3,951) 97 4,858
Revolving credit facilities (54,000) (7,000) - (61,000)
Finance leases and hire purchases - - (53) (53)
(45,288) (10,951) 44 (56,195)
The Group's bank facilities comprise a GBP35 million committed three
year revolving credit facility which expires in May 2016, a GBP30
million committed four and a half year revolving credit facility
expiring in October 2017 and overdraft facilities totalling GBP5
million.
10. Related Party Transactions
Transactions between Group Companies, which are related parties, have
been eliminated on consolidation and therefore do not require
disclosure.
11. Forward Looking Statements
The Chairman's Statement includes statements that are forward looking in
nature. Forward looking statements involve known and unknown risks,
assumptions, uncertainties and other factors which may cause the actual
results, performance or achievements of the Group to be materially
different from any future results, performance or achievements expressed
or implied by such forward looking statements. Except as required by
the Listing Rules and applicable law, the Company undertakes no
obligation to update, review or change any forward looking statements to
reflect events or developments occurring after the date of this report.
Responsibility statement of the directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the EU
-- the interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first six
months of the financial year and their impact on the condensed set of
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the entity during that period; and any
changes in the related party transactions described in the last annual
report that could do so.
By order of the Board
26 November 2013
The Board
The Directors who served during the 6 months to 30 September 2013 were:
Jeremy Pilkington (Chairman)
Neil Stothard
Allison Bainbridge
Peter Parkin (resigned 23 July 2013)
Steve Rogers
Phil White (appointed 15 April 2013)
Independent Review Report to Vp plc
Introduction
We have been engaged by the Company to review the condensed set of
financial statements in the half-yearly financial report for the six
months ended 30 September 2013 which comprises the condensed
consolidated interim income statement, the condensed consolidated
interim statement of comprehensive income, the condensed consolidated
interim balance sheet, the condensed consolidated interim statement of
changes in equity, the condensed consolidated interim cash flow
statement and the related explanatory notes. We have read the other
information contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
This report is made solely to the Company in accordance with the terms
of our engagement to assist the Company in meeting the requirements of
the Disclosure and Transparency Rules ("the DTR") of the UK's Financial
Conduct Authority ("the UK FCA"). Our review has been undertaken so
that we might state to the Company those matters we are required to
state to it in this report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to
anyone other than the company for our review work, for this report, or
for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing
the half-yearly financial report in accordance with the DTR of the UK
FCA.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the EU. The condensed
set of financial statements included in this half-yearly financial
report has been prepared in accordance with IAS 34 Interim Financial
Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on the
condensed set of financial statements in the half-yearly financial
report based on our review.
Scope of review
We conducted our review in accordance with International Standard on
Review Engagements (UK and Ireland) 2410 Review of Interim Financial
Information Performed by the Independent Auditor of the Entity issued by
the Auditing Practices Board for use in the UK. A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially less
in scope than an audit conducted in accordance with International
Standards on Auditing (UK and Ireland) and consequently does not enable
us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the
half-yearly financial report for the six months ended 30 September 2013
is not prepared, in all material respects, in accordance with IAS 34 as
adopted by the EU and the DTR of the UK FCA.
Lindsey Crossland
For and on behalf of KPMG Audit Plc
Chartered Accountants
Leeds
26 November 2013
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Vp PLC via Globenewswire
HUG#1745657
http://www.vpplc.com
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