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Presentation to Carillion

Vp plc Final Results for the year ended 31 March 2011. Presentation to Carillion. 9 th June 2010. The Equipment Rental Specialists. The Equipment Rental Specialists. Agenda. Summary Operational Review Financial Review Conclusion. Results summary. Group Thumbnail.

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Presentation to Carillion

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  1. Vp plc Final Results for the year ended 31 March 2011 • Presentation • to Carillion 9th June 2010 The Equipment Rental Specialists The Equipment Rental Specialists

  2. Agenda • Summary • Operational Review • Financial Review • Conclusion

  3. Results summary

  4. Group Thumbnail • Rental specialist serving diverse, niche end markets • Established for over 50 years • 6 operating divisions • 1500+ employees; £100m asset base; £140m+ revenues • £137m fleet investment in last 5 years • Mainly UK based with some European exposure (Groundforce/TPA); global presence through Airpac Bukom

  5. Strengths/Characteristics of Vp • Resilient • diverse markets • market leading positions • specialist • Consistent • quality returns, even in downturn • Financial • strong balance sheet, positive cash generation • Sustainable • we take a long term view

  6. Operational review

  7. Resilient business performance • Solid profit - ahead of market expectations • Little overall improvement in market conditions • Revenue growth • Double digit operating margins • Prior year cost actions effective • Strong cash generation • Borrowings reduced by £7.8m • Fleet investment increased to £24.2m (74%) • Fleet sales £7.2m, generating profits of £2.3m • Results endorse the quality of our business model

  8. Revenue and Operating Profit trends Revenue (£m) Operating Profit (£m)

  9. Group structure The Equipment Rental Specialists

  10. Divisional overview • All divisions profitable • Strongly cash generative • Positives • UK Forks and Torrent Trackside profit recovery • Network Rail 5 year contract wins • Telehandler fleet acquisition with sole supply agreement • Fleet investment increasing as fresh opportunities secured • Negatives • Rate pressures but improving outlook in second half • Generally upbeat finish to the year

  11. Business performance

  12. Capital expenditure

  13. Market diversity

  14. Operational outlook • New financial year has started well • Business plans assume stable market conditions • Breadth of markets will remain a key asset • Investment in rental fleet expected to continue at enhanced levels • The Group’s excellent financial health provides competitive advantage • We remain optimistic about future prospects

  15. Financial review

  16. Financial highlights – solid profit performance

  17. Earnings and dividend per share

  18. Robust balance sheet

  19. Fleet size and profile balanced with demand £ million

  20. Robust fleet – consistent disposal margins 35% margin 33% margin 39% margin 33% margin

  21. Strong cash generation - operating cash flow

  22. Strong cash generation - total cash flow

  23. Modest gearing, comfortably within covenants Net debt Underlying gearing Interest cover (12 months) Net debt / EBITDA (12 months)

  24. Bank facilities being refreshed

  25. Conclusion

  26. Strengths and strategy

  27. Vp plc Final Results for the year ended 31 March 2011 • Presentation • to Carillion 9th June 2010 The Equipment Rental Specialists The Equipment Rental Specialists

  28. Supplementary schedules

  29. Net working capital

  30. Shareholder value

  31. Effective rate of tax

  32. Shareholder return

  33. Quality returns Operating Margin (%) Return on Average Capital Employed (%) Earnings per share (pence) Dividend per share (pence)

  34. Group history 2010 2006 1954 1973 1990 1980 Turnover 1970: £2m 1980: £14m 1990: £70m 2000: £55m 2010: £134m 2011: £141m

  35. Europe’s market leader in portable roadways: • Operations based in UK, Republic of Ireland and Germany • Largest portable roadway fleet in UK • Skilled installation of bespoke roadway and fencing solutions • Markets: • Transmission, outdoor events, rail, construction - UK and Europe • Opportunities: • Regulated transmission programme, new products and European growth

  36. National hire of telescopic handlers/rough terrain forklifts: • Only national telehandler specialist • Fleet of c.1100 machines • Centralised hire desk – cost effective with consistent quality of service and administration • Strategically located distribution network • Flexible model allows up/downsizing of fleet according to market conditions • Markets: • General construction, housebuild and industry • Opportunities: • Housebuilding improvement, market share growth

  37. Tool hire and specialist equipment for construction and industry: • Local tool hire branches supported by national call centre • Plus, specialist products and services • ESS Safeforce – safety equipment and confined space training • MEP – press fitting and electrofusion equipment • Climate Hire – heating and cooling products • Virtual Hire – own brand partnerships, e.g. Homebase, Garden Centre Group • Markets: • Construction, industry, civil engineering, housebuild, DIY • Opportunities: • Specialist products, market share growth

  38. UK market leaders in the rental and sale of • Shoring Products and Solutions: • Groundforce has the largest excavation support fleet in the UK and Ireland • Plus, specialist products and services • Piletec – piling equipment • Stopper Specialists – pipeline pressure testing • Shorflo – pumps • ‘U’ Mole – trenchless technology • Easiform – concrete formwork • Markets: • Civil engineering (including AMP), construction and housebuilding • Opportunities: • AMP 5, European growth and export sales

  39. Provision of rail specific light plant, trackside lighting and skilled trackside personnel: • Comprehensive depot network providing national coverage • Genuine 24/7 x 365 national support • The widest range of specialist portable rail equipment in the UK • Significant safety and compliance barriers to entry • Markets: • Maintenance and renewals projects on national rail network, London Underground • Opportunities: • Network Rail maintenance contract, LUL, Crossrail, renewal activity

  40. International rental of high pressure air compressors, steam generators and specialist equipment supported by skilled engineers: • Provision of air and steam solutions to the international oil and gas sector • Rental assignments in more than 60 countries • International network of six service and distribution facilities located in the UK (Aberdeen and Great Yarmouth), Singapore, Australia, Middle East and Latin America • Markets: • Well testing, rig maintenance, gas transfer, LNG • Opportunities: • Recovery in well test market, new applications for equipment and greater penetration of under represented geographic regions

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