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Vp, an equipment rental specialist, reports positive financials for the six months ending 30 September 2004. Highlights include increased profit and dividend, strong balance sheet, and growth opportunities. Segmental analysis of Groundforce, UK Forks, Airpac, Hire Station, and Torrent Trackside provided by key executives.
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Interim Results For the six months ended 30 September 2004
Jeremy Pilkington Chairman Neil Stothard Group Managing Director Mike Holt Group Finance Director
Business Overview Vp is an equipment rental specialist - diverse portfolio of specialist businesses - core expertise in asset management - excellent cash flow qualities - strong financial position
Highlights PBT increased 15% to £4.7m EPS improved 16% to 7.5 pence Return on capital employed increased to 17% Interim dividend increased 9% to 1.75 pence
Financial Review Mike Holt Group Finance Director
International Financial Reporting Standards Key areas - Pensions - Share option hedging Year ending 31 March 2005 to be reported under UK GAAP - UITF17/38 adjustments Reconciliation to IFRS post full year results 30 September 2005 interims – IFRS mandatory
Operational Review Neil Stothard Group Managing Director
Groundforce Rental and sales of excavation support systems to the water, civil engineering and construction industries, plus three specialist offerings: Piletec – pile driving and breaking; Stopper Specialists – pipe integrity testing; Survey Technology – surveying and water flow measurement.
Groundforce Market Leader Good demand from AMP3 Integration of acquisitions Specialist businesses progressing Growth opportunities Well positioned for AMP4
UK Forks Hire of rough terrain material handling equipment to industry, residential and general construction.
UK Forks Steady market conditions Focused product investment Further progress with major housebuilders Unique offering to the market
Airpac Oilfield Services Rental of specialist air compressors and associated equipment to the international oil and gas exploration and development markets.
Airpac Oilfield Services Supportive crude oil price Strong demand in North Sea Singapore project demand good Investment in existing and new products Repair & maintenance, well test and pipelines Growth opportunities
Hire Station Rental and sale of small tools to industry and construction plus two specialist offerings: Safeforce – safety and environmental products, Lifting Point - materials handling and lifting gear hire.
Hire Station Recovery programme on track Q1 –v- Q2 focus shift – internal reorganisation → external business winning Internal • Core product identification • Investment in recruitment and training • Stability restored to structure External • Business wins - new products • One Call developments • Specialist businesses
Torrent Trackside Hire of portable rail infrastructure equipment, lighting and related services to the rail renewals and maintenance industry.
Torrent Trackside Excellent performance Renewals business – Network Rail Contracts awarded Maintenance business – Holding regime Network Rail tender – Long term contracts London Underground – New area for growth
Group Outlook Jeremy Pilkington Chairman
Turnover 91.0 83.5 75.5 66.8 59.8 45.6 H1 £m
Profit Before Tax (pre Goodwill) 9.5 8.6 7.8 6.5 4.9 3.3 H1 £m
Return on Capital Employed 17.1 15.7 14.8 12.4 7.3 H1 £m
Dividends Earnings per Share 14.59 12.36 10.23 7.52 5.0 5.03 4.5 4.2 4.05 H1 1.75 H1 £p
Group Outlook Overall outlook for the Group very positive - UK Infrastructure spend set to continue - Safety and regulatory regimes supporting growth Strength of balance sheet and cash flow permits organic and acquisition growth and gives defensive quality Breadth of markets served gives earnings resilience Good opportunities exist in all our chosen markets Not ‘buying’ growth at the expense of profit quality
Group Outlook Quality of product and service winning market share All levels of management strongly incentivised to deliver earnings growth in their business 5 years of earnings growth and improved returns from internally generated cash flow without recourse to increased external funding