4th Jun 2015 07:12
LONDON (Alliance News) - Vp PLC Thursday gave a positive outlook after it reported strong growth in earnings and revenue for its recently-ended financial year, as demand from the housebuilding and construction sectors more than offset quieter demand from the oil and gas and transmission sectors.
The equipment rental company reported a pretax profit of GBP25.1 million for the year to end-March, up from GBP18.9 million a year earlier, as revenue grew 12% to GBP205.6 million from GBP183.1 million and margins also improved.
Pretax profit before amortisation, the company's preferred profit measure rose by a third to GBP26.9 million from GBP20.1 million, exceeding its previous best year of 2009 when it had reported a figure of GBP21.7 million.
It said it will pay a final dividend for the last financial year of 11.5 pence, making a total dividend for the year of 16.5p, up from 14.0p.
"Whilst markets have generally been supportive, we have experienced some variance within individual sectors. Housebuilding, construction and elements of infrastructure have generated strong demand in the period. By contrast the oil and gas sector, primarily driven by the oil price fall in the latter half of 2014, and the UK transmission sector have been quieter," the company said.
Other key financial metrics also performed well. Return on average capital employed rose to 16.2% from 13.5%, while cash flow generation was strong as earnings before interest, tax, depreciation and amortisation rose to GBP53.8 million from GBP44.3 million. Its operating margin rose to 14.0% from 11.9%.
Vp invested GBP49.3 million in its fleet in the year, up from GBP38.2 million a year earlier, while proceeds from fleet disposals rose to GBP12.0 million from GBP8.6 million, generating a profit of GBP3.3 million up from GBP2.9 million.
Looking ahead, the company expects demand from the construction and housebuilding sectors to continue at similar levels, and some recovery in the transmission markets. It expects a quieter year in the UK water sector as it enters the first year of the new five-year regulatory investment plan, a typically low-spending year. It expects oil and gas markets to remain tough, "but with opportunity".
"The economic environment in both the UK and globally is more positive than for some time and all group business divisions are identifying significant growth and investment opportunities for the near and long term future," Vp Chairman Jeremy Pilkington said
"The board believes that Vp's diverse business model coupled with an active pursuit of growth opportunities will help to continue to deliver quality returns for our shareholders. We look forward to the year ahead with much confidence," he added.
Vp shares were up 7.4% at 725.00 pence early Thursday, an all-time high for the stock.
By Steve McGrath; [email protected]; @stevemcgrath1
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