TIDMVP.
Press Release 5 June 2014
Vp plc
("Vp" or the "Group" or the "Company")
Final Results
Vp plc, the equipment rental specialist, today announces its Final
Results for the year ended 31 March 2014.
Highlights
-- Significant improvement in profit before tax and amortisation by 16% to
GBP20.1 million (2013: GBP17.4 million)
-- Revenues increased 10% to GBP183.1 million (2013: GBP167.0 million)
-- Basic earnings per share pre-amortisation rose 18% to 42.0 pence
-- Return on capital employed improved to 13.5% (2013: 13.3%) maintained
above target threshold of 12% for 10 consecutive years
-- Continued strong cash flow generation with EBITDA increasing to GBP44.3
million (2013: GBP41.0 million)
-- Increase in net debt to GBP53.0 million (2013: GBP45.3 million) after
funding:
-- Capital investment in the fleet of GBP38.2 million
-- Successful GBP4.6 million acquisition of Mr Cropper in September
2013
-- Final dividend proposed of 10.4 pence per share, making a total of 14.0
pence for the full year (2013: 12.25 pence), an increase of 14%
Jeremy Pilkington, Chairman of Vp plc, commented:
"It has been another highly successful year for the Group with
significant progress in revenue, profits, earnings per share and
dividends.
Economic indicators in the UK and mainland Europe now appear more
positive than for some time and all businesses within the Group are
identifying significant opportunities for growth and investment.
We believe that our established financial discipline combined with the
active pursuit of growth opportunities will continue to deliver quality
returns for shareholders.
We look forward to the year ahead with confidence."
- 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 / Jamie Hooper / Stephanie Watson Tel: +44 (0) 20 7398 7719
jamie.hooper@abchurch-group.com www.abchurch-group.com
CHAIRMAN'S STATEMENT
I am very pleased to be able to report to shareholders on another
excellent set of results and a year of further progress for the Group.
Profits before tax and amortisation improved 16% to GBP20.1 million
(2013: GBP17.4 million) on revenues up 10% at GBP183.1 million (2013:
GBP167.0 million) with margins increased to 11.0% (2013: 10.4%). Basic
earnings per share pre-amortisation increased by 18% to 42.0 pence per
share.
Return on average capital employed moved ahead to 13.5% (2013: 13.3%).
Return on capital employed has long been a cornerstone key performance
indicator for the Group, guiding our investment and acquisition
decisions and informing longer term strategy. We have an outstanding
track record in this regard, having maintained ROACE above our target
threshold of 12% in each of the last 10 years, even throughout the worst
periods of the recent recession.
The Group continued to generate strong cash flows with EBITDA increasing
to GBP44.3 million (2013: GBP41.0 million). We spent GBP38.2 million on
rental fleet upgrades and renewals, a 70% increase over the prior year,
demonstrating our confidence in the quality of investment opportunities,
plus GBP4.6 million on the acquisition of Mr Cropper in September 2013,
which is now trading very successfully within Groundforce. Net
borrowings rose to GBP53.0 million (2013: GBP45.3 million) representing
a gearing of 49%. All businesses within the Group are identifying
significant opportunities for growth and investment.
Reflecting this excellent set of results, the Board is recommending a
final dividend of 10.4 pence per share, making a total for the year of
14.0 pence per share, an increase of 14%. Subject to shareholders
approval at our Annual General Meeting on 22 July 2014, it is proposed
to pay the final dividend on 8 August 2014 to members registered as of
11 July 2014.
Economic indicators in the UK and mainland Europe now appear more stable
and positive than they have been for several years and it does not now
seem unreasonable to assume that we will be operating within a more
benign economic environment for the foreseeable future.
During the year, the Board conducted a review of Board effectiveness.
The review confirmed that high standards of governance were generally
being met but we have implemented certain specific recommendations and
remain alert to opportunities for further improvement.
Our employees and their dedication to the business is our one truly
unique distinguishing feature and their longevity of service is one of
our greatest strengths. Fully 50% of our employees have more than 5
years' service and 25% have more than 10 years which is a remarkable
record. There is no substitute for this deep, institutional experience
and memory in terms of delivering outstanding service excellence to our
customers.
On behalf of our shareholders and the Board, it is my pleasure to
recognise the contribution of all employees, in the UK, Europe and
further afield, to these excellent results.
Jeremy Pilkington
Chairman
5 June 2014
BUSINESS REVIEW
Overview
Vp plc is a specialist rental business with six market leading divisions
operating in the UK and overseas. Our objective is to deliver
sustainable, quality returns by providing products and services to a
diverse range of end markets. These include rail, transmission, water,
construction, civil engineering, housebuilding and oil and gas.
Year ended Year ended
31 March 2014 31 March 2013
Revenue GBP 183.1 million GBP 167.0 million
Operating profit before amortisation GBP 21.8 million GBP 19.8 million
Operating margin 11.9% 11.9%
Investment in rental fleet GBP 38.2 million GBP 22.5 million
ROACE 13.5% 13.3%
The Group has again made excellent progressthis year, generating
revenues of GBP183.1 million, 10% ahead of prior year. Whilst there was
a small contribution from the mid-year Mr Cropper acquisition, the bulk
of the increase was organic, with all operating divisions progressing
during the year.
Operating profits before amortisation also grew by 10% to GBP21.8
million, and therefore margins were maintained at a healthy 11.9% (2013:
11.9%). Return on average capital employed (ROACE), a key indicator for
the Group, improved to 13.5% (2013: 13.3%), further demonstrating that
the Group is succeeding in both delivering growth whilst maintaining and
improving the quality of returns.
The Group continued to generate strong cash flows with EBITDA increasing
to GBP44.3 million (2013: GBP41.0 million).
The year to 31 March 2014 saw an uplift in investment with rental fleet
capital expenditure increased to GBP38.2 million (2013: GBP22.5
million). Investment in rental fleet is a combination of growth,
replacement and substitution. In addition, as previously reported, the
Group acquired the entire issued share capital of Mr Cropper Ltd in
September 2013 for GBP4.6 million.
As always, disposal of equipment is an important factor with sale
proceeds of GBP8.6 million (2013: GBP9.6 million) generating profit on
disposal of GBP2.9 million (2013: GBP2.6 million).
The market environment for the Group has been largely supportive.
Housebuilding, infrastructure, water (AMP5) and transmission markets
have continued to generate good demand throughout the year. Oil and gas
markets have become more positive with improved prospects in liquefied
natural gas (LNG) markets in particular. Overseas growth continues to
be targeted both in the oil and gas sector globally and in transmission,
civil engineering and wind power in mainland Europe. The UK general
construction market remains a future opportunity as recovery improves.
Whilst we are expectant of a modest rate of improvement in construction,
the trend is positive and the Group is well positioned to benefit from
this recovery as it happens.
The Group's strategy to support diverse markets both in the UK and
overseas continues to deliver results. The strong growth in earnings
during the year, yet again underlines the benefit and relevance of our
business model, which is delivering genuine shareholder value over the
longer term.
GROUNDFORCE
Excavation support systems, specialist piling solutions and trenchless
technology for the water, gas, civil engineering and construction
industries in the UK and mainland Europe.
Year ended Year ended
31 March 2014 31 March 2013
Revenue GBP42.3 million GBP37.2 million
Operating profit before amortisation GBP7.9 million GBP7.8 million
Investment in rental fleet GBP8.0 million GBP7.3 million
Groundforce delivered another excellent performance with profits of
GBP7.9 million (2013: GBP7.8 million) from revenues up 14% to GBP42.3
million. Whilst margins were reduced, largely due to a change in
business mix, the net result remains of the highest quality.
Demand came from infrastructure projects, large and small, together with
a strong contribution from AMP5. Design led, temporary works solutions,
primarily London centric, also provided strong workflows through the
year. The largest contract was for Crossrail in forming the entrance to
Paddington station. Regional demand was varied, with increased activity
in the South and the North of England compensating for a slower market
in Scotland following completion of a significant contract in the
transmission sector. Overall market share, however, was at least
maintained.
Piletec performed very well, further enhanced by the acquisition of Mr
Cropper in September 2013. Major piling projects were limited in number
but Piletec maintained its share. Mr Cropper was quickly integrated
into the business and subsequent investment in rental fleet and vehicles,
plus the transfer to two new locations, has helped prepare the ground
for further growth.
Progress in Ireland was limited, but positive, against a subdued market
backdrop. Other Group products have been introduced during the year
together with the opening of a satellite depot in Lisburn, Northern
Ireland.
The start-up Groundforce business in Germany continues to develop and
whilst still incurring losses, we remain positive about prospects. The
business is centred around hubs in Germany which provide a platform for
supply of traditional products on a regional basis, together with an
infrastructure to undertake major project work across the wider mainland
European market. The major project work is technically challenging but
the business has been successful in achieving success on a number of
high profile contracts.
Capital investment on rental fleet was GBP8.0 million (2013: GBP7.3
million) in support of opportunities largely in the UK but also Europe.
The new financial year holds the prospect of some further progress for
Groundforce as a declining demand from AMP5, now in its 5th year, is
mitigated by ongoing project work in Europe.
UK FORKS
Rough terrain material handling equipment for industry, residential and
general construction.
Year ended Year ended
31 March 2014 31 March 2013
Revenue GBP 16.3 million GBP14.1 million
Operating profit before amortisation GBP 2.5 million GBP2.1 million
Investment in rental fleet GBP 7.0 million GBP0.4 million
The UK Forks division delivered excellent results with profits up 19% to
GBP2.5 million (2013: GBP2.1 million). After a relatively modest
investment in fleet in the prior year, increasing demand from customers
and new contract wins saw fleet capital expenditure grow to GBP7.0
million (2013: GBP0.4 million) in the year. Whilst the level of
investment in fleet has increased, the returns in the business have also
continued to improve. Demand picked up in both core sectors;
housebuilding and construction. The growing appetite for new homes
across the UK acts as a driver to buoyant housebuild activity.
UK Forks remains the market leader in supplying telehandlers to the UK
housing market and customers continue to recognise the value added
benefit of our commitment to high quality customer service and back up.
The division has had a very strong run over the last three years as the
recovery from recessionary conditions has been used as a platform for
profitable growth. The business continues to explore new markets whilst
maintaining strong management of the cost base and the quality of
revenue. The new year has started well and prospects will be helped by
further recovery in the general construction sector.
AIRPAC BUKOM OILFIELD SERVICES
Equipment and service providers to the international oil and gas
exploration and development markets.
Year ended Year ended
31 March 2014 31 March 2013
Revenue GBP 20.2 million GBP17.4 million
Operating profit before amortisation GBP 2.0 million GBP2.0 million
Investment in rental fleet GBP 5.8 million GBP2.1 million
Airpac Bukom revenues grew to GBP20.2 million, 16% ahead of the prior
year. Profits year on year were flat at GBP2.0 million but this
represents a good recovery from the deficit against prior year reported
at the interim stage. Trading has improved in most geographical areas,
with South East Asia, Australia and the Middle East performing
particularly well. In Asia, a number of contract awards were secured in
well testing, with good demand in Indonesia, India and Thailand. In
addition, LNG contracts were secured in support of the construction of
new plants in Australia. This activity involved support in both
Indonesia and Thailand for the fabrication testing and also projects in
Australia on Curtis Island, Queensland. Prospects for further LNG
activity remain positive with more projects expected to come on stream
in the new financial year. The Middle East North Africa (MENA) region
performed well with good ongoing demand in Kurdistan together with new
opportunities in North Africa. The UK North Sea sector remained quiet
with low well test activity and restrictions on rig fabric maintenance
arising from a combination of adverse weather and helicopter issues.
Activity in the Africa region was subdued compared with prior year.
Investment in rental fleet increased to GBP5.8 million as the division
continued to broaden the product offering. The majority of this
expenditure was at the end of the financial year and will only
contribute in the new financial year.
We anticipate further increased capital investment as the business
reacts to opportunities in the well test, rig maintenance and LNG
markets and this should provide a good platform for the business into
the new year.
TORRENT TRACKSIDE
Suppliers of rail infrastructure portable plant and specialist services
to Network Rail, London Underground and their respective contractor
base.
Year ended Year ended
31 March 2014 31 March 2013
Revenue GBP22.3 million GBP21.4 million
Operating profit before amortisation GBP2.8 million GBP2.2 million
Investment in rental fleet GBP2.9 million GBP0.9 million
Torrent Trackside had an excellent year reporting revenues of GBP22.3
million up 4% on prior year and generating profits of GBP2.8 million
(2013: GBP2.2 million).
Investment in the rail sector continued to be significant and as a major
rental provider to that market, Torrent experienced another year of
strong demand. Business levels were high as the control spend period 4
(CP4) completed with the division busy on renewal, project and
maintenance activities. Torrent continued to provide a full range of
services directly to Network Rail on maintenance across the UK rail
network and also to the Network Rail appointed contractors.
The new 5 year control spend period (CP5) relating to track maintenance
and renewal across the UK, will commence in 2014. Network Rail have
recently confirmed the successful bidders for both plain line renewals
and switches and crossings for CP5, and Torrent are well positioned to
deliver both plant and associated services to the successful bidders.
Investment in the fleet increased significantly to GBP2.9 million (2013:
GBP0.9 million) both to refresh the fleet and also in support of new
growth opportunities.
The rail market is well funded, buoyant and challenging. Year on year,
the market rightly demands increased productivity, efficiency gains and
unit price reductions. Torrent's market leadership places it well to
meet those demands whilst continuing to deliver excellence to both the
existing and new customer base.
TPA
Portable roadway systems, primarily to the UK market, but also in
mainland Europe.
Year ended Year ended
31 March 2014 31 March 2013
Revenue GBP15.8 million GBP14.9 million
Operating profit before amortisation GBP1.8 million GBP1.3 million
Investment in rental fleet GBP1.0 million GBP2.4 million
The TPA business had a good year increasing revenues by 6% to GBP15.8
million, but more importantly further improving margins. Operating
profits increased from GBP1.3 million to GBP1.8 million, a 36%
improvement.
Investment in rental fleet was modest at GBP1.0 million (2013: GBP2.4
million) with revenue growth delivered from improved utilisation and
rates.
In the UK, revenue quality improved as the business mix was changed,
moving away from lower margin and seasonal outdoor event activity,
towards the less seasonal transmission and day to day construction and
rail markets. Trading during the winter was also better at what has,
historically, been a quieter time for TPA. The increasing challenge of
complying with HSE (health and safety) and VOSA (vehicle usage)
regulations has also been met and operational efficiencies have been
gained as a result.
The business in Germany had a much improved year with a more consistent
revenue stream from a wider customer base and a busy transmission
sector. The business enjoyed a strong final quarter and enters the new
financial year with good momentum both in the UK and mainland Europe.
HIRE STATION
Small tools and specialist equipment for industry and construction.
Year ended Year ended
31 March 2014 31 March 2013
Revenue GBP66.2 million GBP62.0 million
Operating profit before amortisation GBP4.8 million GBP4.3 million
Investment in rental fleet GBP13.4 million GBP9.4 million
The Hire Station division enjoyed improving markets during the year,
particularly in the second half, and reported revenues of GBP66.2
million, a 7% uplift on prior year. This growth translated into a
profit improvement of 11% to GBP4.8 million for the year. Progress was
made in all three elements: Hire Station tools, ESS Safeforce and MEP.
The tools business, with its strengthened management, made excellent
progress. Whilst enjoying growth, the emphasis has been on operational
improvement and achieving high availability on the most popular
products. The net result has been enhanced levels of service and market
share gains. The business improved its infrastructure with relocations
of certain key branches and selective openings of new locations in the
new financial year. The tool hire business operates in a highly
competitive market, and includes general construction as one of its key
segments.
ESS Safeforce had another year of excellent growth. New locations were
opened in Port Talbot and Exeter and additional capacity added in other
existing locations. Shutdown activity was quieter, but prospects are
improved and a number of contracts have been secured for the new
financial year. The specialist focus on rental and sales of safety,
survey and communications equipment continues to deliver strong results.
MEP, which supplies press fitting and electrofusion equipment, as well
as operating the largest low level access fleet in the UK, delivered
another year of growth. Supporting the M&E (mechanical and electrical)
sector, activities in the year have included the new Southern General
Hospital in Glasgow and Terminal 2 at Heathrow. The maintained drive by
the HSE on site safety will drive best practice and act as a catalyst
for further potential growth for MEP.
Capital investment in the year was healthy at GBP13.4 million (2013:
GBP9.4 million) as the business invested into growth opportunities and
improved product availability.
Within the tool hire market the dynamics continue to change and as
customers become busier and seek to work more safely, availability,
product quality and customer service become ever more important. The
business survived the downturn better than most and is well positioned
to participate in the market recovery, and we foresee another year of
progress.
Prospects
Building on another good year for the Group, we expect further positive
development both in the UK market place but also in our smaller but
growing overseas activities.
The overall scenario for the markets we support remains positive, with
further improvement anticipated in general construction and oil and gas,
tempered by potential temporary, but modest slowdown in sectors which
have been buoyant in recent times such as water and transmission.
Consistency of quality in products, services and people is increasingly
valued by customers who rightly expect a top level service delivery. As
markets recover, we believe that these factors will further enhance the
attractiveness of our specialist service offering.
We enter the new financial year with excellent business momentum from a
strong final quarter and this gives us confidence that Vp remains in a
good position to deliver further progress for shareholders in the coming
year.
Neil Stothard
Group Managing Director
5 June 2014
Consolidated Income Statement
for the year ended 31 March 2014
2014 2013
Note GBP000 GBP000
Revenue 1 183,064 167,034
Cost of sales (133,470) (124,791)
Gross profit 49,594 42,243
Administrative expenses (28,883) (23,377)
Operating profit before amortisation 1 21,831 19,815
Amortisation (1,120) (949)
Operating profit 20,711 18,866
Net financial expense (1,778) (2,464)
Profit before amortisation and taxation 20,053 17,351
Amortisation (1,120) (949)
Profit before taxation 4 18,933 16,402
Taxation 4 (3,238) (3,353)
Net profit for the year 15,695 13,049
Pence Pence
Basic earnings per share 2 39.78 33.62
Diluted earnings per share 2 36.31 30.84
Dividend per share paid and proposed 5 14.00 12.25
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2014
2014 2013
GBP000 GBP000
Profit for the year 15,695 13,049
Other comprehensive income:
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit pension scheme 233 697
Tax on items taken to other comprehensive income (53) (166)
Impact of tax rate change (118) (42)
Foreign exchange translation difference (181) 45
Items that may be subsequently reclassified to profit
or loss
Effective portion of changes in fair value of cash
flow hedges 704 196
Total other comprehensive income 585 730
Total comprehensive income for the year 16,280 13,779
Consolidated Statement of Changes in Equity
for the year ended 31 March 2014
2014 2013
GBP000 GBP000
Total comprehensive income for the year 16,280 13,779
Dividends paid (4,962) (4,437)
Net movement relating to Treasury Shares and shares
held by Vp Employee Trust (8,593) (1,922)
Share option charge in the year 1,735 1,225
Tax movements to equity 2,876 1,258
Impact of tax rate change (274) (42)
Change in Equity 7,062 9,861
Equity at start of year 100,922 91,061
Equity at end of year 107,984 100,922
Consolidated Balance Sheet
as at 31 March 2014
Note 2014 2013
GBP000 GBP000
Non-current assets
Property, plant and equipment 124,834 110,577
Intangible assets 41,351 39,279
Employee benefits 689 80
Total non-current assets 166,874 149,936
Current assets
Inventories 5,352 5,679
Trade and other receivables 38,356 33,256
Cash and cash equivalents 3 8,978 8,712
Total current assets 52,686 47,647
Total assets 219,560 197,583
Current liabilities
Interest bearing loans and borrowings 3 (17) (24,000)
Income tax payable (632) (1,539)
Trade and other payables (44,396) (34,838)
Total current liabilities (45,045) (60,377)
Non-current liabilities
Interest bearing loans and borrowings 3 (62,000) (30,000)
Deferred tax liabilities (4,531) (6,284)
Total non-current liabilities (66,531) (36,284)
Total liabilities (111,576) (96,661)
Net assets 107,984 100,922
Equity
Issued share capital 2,008 2,008
Capital redemption reserve 301 301
Share premium account 16,192 16,192
Hedging reserve (90) (794)
Retained earnings 89,546 83,188
Total equity attributable to equity holders of the
parent 107,957 100,895
Non-controlling interests 27 27
Total equity 107,984 100,922
Consolidated Statement of Cash Flows
for the year ended 31 March 2014
Note 2014 2013
GBP000 GBP000
Cash flow from operating activities
Profit before taxation 18,933 16,402
Pension fund contributions in excess of service cost (376) (429)
Share based payment charge 1,735 1,225
Depreciation 1 22,507 21,173
Amortisation 1 1,120 949
Financial expense 1,790 2,484
Financial income (12) (20)
Profit on sale of property, plant and equipment (2,862) (2,569)
Operating cash flow before changes in working
capital 42,835 39,215
Decrease/(increase) in inventories 364 (796)
(Increase)/decrease in trade and other receivables (3,525) 1,741
Increase/(decrease) in trade and other payables 7,581 (401)
Cash generated from operations 47,255 39,759
Interest paid (1,848) (2,504)
Interest element of finance lease rental payments (5) -
Interest received 12 20
Income tax paid (3,949) (3,809)
Net cash flow from operating activities 41,465 33,466
Cash flow from investing activities
Disposal of property, plant and equipment 8,554 9,609
Purchase of property, plant and equipment (39,535) (29,635)
Acquisition of businesses and subsidiaries (net of
cash and overdrafts) (4,498) (4,117)
Net cash flow from investing activities (35,479) (24,143)
Cash flow from financing activities
Purchase of own shares by Employee Trust and Company (8,593) (9,767)
Repayment of borrowings (54,000) (5,000)
Proceeds from new loans 62,000 13,000
Capital element of hire purchase/finance lease
agreements (36) (1)
Dividends paid (4,962) (4,437)
Net cash flow used in financing activities (5,591) (6,205)
Increase in cash and cash equivalents 395 3,118
Effect of exchange rate fluctuations on cash held (129) 12
Cash and cash equivalents at the beginning of the
year 8,712 5,582
Cash and cash equivalents at the end of the year 8,978 8,712
NOTES
The final results have been prepared on the basis of the accounting
policies which are set out in Vp plc's annual report and accounts for
the year ended 31 March 2014. The accounting policies applied are in
line with those applied in the annual financial statements for the year
ended 31 March 2013 with the exception of the adoption of new standards
applicable in the year, being IAS1 (as amended), IFRS 13 and IAS19 (as
amended). None of these has had a material effect on the accounts.
EU Law (IAS Regulation EC1606/2002) requires that the consolidated
accounts of the Group for the year ended 31 March 2014 be prepared in
accordance with International Financial Reporting Standards ("IFRSs") as
adopted for use in the EU ('adopted IFRSs').
Whilst the financial information included in this preliminary
announcement has been computed in accordance with adopted IFRSs, this
announcement does not itself contain sufficient information to comply
with IFRSs. The Company expects to publish full financial statements in
June 2014.
The financial information set out above does not constitute the
Company's statutory accounts for the year ended 31 March 2014 or 2013.
Statutory accounts for 31 March 2013 have been delivered to the
registrar of companies, and those for 31 March 2014 will be delivered in
due course. The auditor has reported on those accounts; the reports
were (i) unqualified, (ii) did not include a reference to any matters to
which the auditor drew attention by way of emphasis without qualifying
the report and (iii) did not contain a statement under section 498 (2)
or (3) of the Companies Act 2006 in respect of the accounts for 31 March
2014 or 31 March 2013.
The financial statements were approved by the board of directors on 5
June 2014.
1. Business Segments
Depreciation and Operating profit
Revenue amortisation before amortisation
2014 2013 2014 2013 2014 2013
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
UK Forks 16,301 14,061 2,841 2,629 2,482 2,099
Groundforce 42,298 37,165 4,600 4,015 7,917 7,833
Airpac Bukom 20,201 17,450 3,466 3,458 2,035 2,015
Hire Station 66,174 62,017 9,192 8,454 4,798 4,323
TPA 15,786 14,897 1,582 1,540 1,779 1,310
Torrent
Trackside 22,304 21,444 1,534 1,655 2,820 2,235
Group - - 412 371 - -
Total 183,064 167,034 23,627 22,122 21,831 19,815
2. Earnings Per Share
The calculation of basic earnings per share of 39.78 pence (2013: 33.62
pence) is based on the profit attributable to equity holders of the
parent of GBP15,695,000 (2013: GBP13,049,000) and a weighted average
number of ordinary shares outstanding during the year ended 31 March
2014 of 39,451,000 (2013: 38,818,000), calculated as follows:
2014 2013
Shares Shares
000's 000's
Issued ordinary shares 40,154 40,154
Effect of own shares held (703) (1,336)
Weighted average number of ordinary shares 39,451 38,818
Basic earnings per share before the amortisation of intangibles was
41.97 pence (2013: 35.47 pence) and is based on an after tax add back of
GBP862,000 (2013: GBP721,000) in respect of the amortisation of
intangibles.
The calculation of diluted earnings per share of 36.31 pence (2013:
30.84 pence) is based on profit attributable to equity holders of the
parent of GBP15,695,000 (2013: GBP13,049,000) and a weighted average
number of ordinary shares outstanding during the year ended 31 March
2014 of 43,222,000 (2013: 42,308,000), calculated as follows:
2014 2013
Shares Shares
000's 000's
Weighted average number of ordinary shares 39,451 38,818
Effect of share options in issue 3,771 3,490
Weighted average number of ordinary shares (diluted) 43,222 42,308
Diluted earnings per share before the amortisation of intangibles was
38.31 pence (2013: 32.55 pence).
3. Analysis of Net Debt
At At
31 March 1 April
2014 2013
GBP000 GBP000
Cash and cash equivalents (8,978) (8,712)
Current debt 17 24,000
Non current debt 62,000 30,000
Net debt 53,039 45,288
Year end gearing (calculated as net debt expressed as a percentage of
shareholders' funds) stands at 49% (2013: 45%).
On 15 May 2013 the existing bank facilities, including the facility
which was due to expire on 31 May 2013, were replaced by a GBP35 million
revolving credit facility which expires in May 2016 and a GBP30 million
four and a half year revolving credit facility which expires in October
2017. The agreed facilities also included a GBP25 million step up
facility. The Group will make use of this facility and in June 2014
will establish a GBP20 million committed revolving credit facility also
expiring in October 2017.
4. Taxation
The charge for taxation for the year represents an effective tax rate of
17.1% (2013: 20.4%). The tax charge was reduced by GBP1.1 million
(5.7%) to reflect the adjustment to the deferred tax balance as a result
of the future standard tax rate of 20% in the UK. The effective tax
rate excluding adjustments in respect of prior years is 17.7% (2013:
21.6%).
5. Dividend
The Board has proposed a final dividend of 10.40 pence per share to be
paid on 8 August 2014 to shareholders on the register at 11 July 2014.
This, together with the interim dividend of 3.60 pence per share paid on
3 January 2014 makes a total dividend for the year of 14.00 pence per
share (2013: 12.25 pence per share).
6. Principal risks and uncertainties
The Board is responsible for determining the level and nature of risks
it is appropriate to take in delivering the Group's objectives, and for
creating the Group's risk management framework. The Board recognises
that good risk management aids effective decision making and helps
ensure that risks taken on by the Group are adequately assessed and
challenged.
Our approach identifies risks arising in all parts of the Group, using
both a top down and bottom up approach. Once identified, the impact and
probability of risks are determined and scored at both a gross (before
mitigation) and net (after mitigation basis). These risk scores are
documented in risk registers which are maintained at a divisional and
Group level. Risk registers are subject to ongoing review based upon
business activity.
The risk profile for each division is used to determine the programme of
work carried out by Internal Audit. The risk assessments are captured in
consistent reporting formats, enabling Internal Audit to consolidate the
risk information and summarise the key risks in the form of a Group risk
profile. Mitigation action plans against each risk continue to be
monitored on a regular basis. Further information is provided below on
our principal risks and mitigating actions to address them.
Market risk
Risk description
A downturn in economic recovery could result in worse than expected
performance of the business, due to lower activity levels or prices.
Mitigation
Vp provides products and services to a diverse range of markets with
increasing geographic spread. The Group regularly monitors economic
conditions and our investment in fleet can be flexed with market demand.
Competition
Risk description
The equipment rental market is already competitive, and could become
more so, potentially impacting market share, revenues and margins.
Mitigation
Vp aims to provide a first class service to its customers and maintains
significant market presence in a range of specialist niche sectors. The
Group monitors market share, market conditions and competitor
performance and has the financial strength to maximise opportunities.
Investment/product management
Risk description
In order to grow, it is essential the Group obtains first class products
at attractive prices and keeps them well maintained.
Mitigation
Vp has well established processes to manage its fleet from investment
decision to disposal. The Group's return on average capital employed
was a healthy 13.5% in 2013/14. The quality of the Group's fleet
disposal margins also demonstrate robust asset management and
appropriate depreciation policies.
People
Risk description
Retaining and attracting the best people is key to our aim of exceeding
customer expectations and enhancing shareholder value.
Mitigation
Vp offers well structured reward and benefit packages, and nurtures a
positive working environment. We also try to ensure our people fulfil
their potential to the benefit of both the individual and the Group, by
providing appropriate career advancement and training.
Safety
Risk description
The Group operates in industries where safety is a key consideration for
the well being of both our employees and the customers that hire our
equipment. Failure in this area would impact our results and
reputation.
Mitigation
The Group has robust health and safety policies, and management systems
and our induction and training programmes reinforce these policies.
We provide support to our customers exercising their responsibility to
their own workforces when using our equipment.
Financial risks
Risk description
To develop the business Vp must have access to funding at a reasonable
cost. The Group is also exposed to interest rate and foreign exchange
fluctuations which may impact profitability and has exposure to credit
risk relating to customers who hire our equipment.
Mitigation
The Group has a revolving credit facility of GBP65.0 million and
maintains strong relationships with all banking contacts. Our treasury
policy defines the level of risk that the Board deems acceptable. Vp
continues to benefit from a strong balance sheet, with growing EBITDA,
which allows us to invest into opportunities.
Our treasury policy requires a tangible proportion of debt to be at
fixed interest rates, and we facilitate this through interest rate
swaps. We have agreements in place to buy or sell currencies to hedge
against foreign exchange movements. We have strong credit control
practices and use credit insurance where it is cost effective. Debtor
days were unchanged during the year and bad debts, as a percentage of
revenue, remained low at 0.6% (2013: 0.7%).
7. Forward Looking Statements
The Chairman's Statement and Business Review include 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.
8. Annual Report and Accounts
The Annual Report and Accounts for the year ended 31 March 2014 will be
posted to shareholders on or around 20 June 2014.
Directors' Responsibility Statement in Respect of the Annual Financial
Report (extracted from the Annual Financial Report)
We confirm that to the best of our knowledge:
-- The financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
Company and the undertakings included in the consolidation taken as a
whole; and
-- The Business Review and Financial Review, which form part of
the Directors' Report, includes a fair review of the development and
performance of the business and the position of the Company and the
undertakings included in the consolidation taken as a whole, together
with the description of the principal risks and uncertainties that they
face.
For and on behalf of the Board of Directors
J F G Pilkington A M Bainbridge
Director Director
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#1790824
http://www.vpplc.com
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