Good morning!
The Chancellor's Autumn Statement is due to be announced shortly, so I expect all eyes are on that.
It wasn't possible to write a report yesterday unfortunately, but I'll circle back to those announcements later this week, as we don't want gaps in the sequence.
There are a couple of equipment hire companies reporting today, so let's start with those.
VP (LON:VP.)
Share price: 749p (up 4% today)
No. shares: 40.2m
Market cap: £301.1m
Interim results to 30 Sep 2015 - the headline figures here look solid, rather than exciting. Key numbers being;
- Revenues up 4% to £105.1m for the six months
- Profit before tax & amortisation up 6% to £17.2m (I'm happy to accept this as an accurate performance measure, as the amortisation charge is non-cash, and immaterial anyway)
- Headline EPS is also shown pre-amortisation, and rose 7% to 35.14p
Judging from last year's results, there seems to be a trading bias towards H1, and the full year broker forecast seems to confirm this, with 54.4p forecast for y/e 31 Mar 2016, assuming that forecasts are prepared on the same basis that the company reports.
This seasonality makes sense, since there's more outdoor construction & maintenance activity over the spring & summer, than over the winter.
On reading the divisional breakdown, it's clear that most parts of the business are doing better than the headline figures suggest. UK Forks and Hire Station did very well, with profits up 25% and 27% respectively. However, two smaller divisions performed poorly, in particular Airpac Bukom (impacted by the O&G sector slowdown), and TPA, where profit more than halved.
So assuming the problem divisions (which are relatively small) can be turned around (all are still profitable, so no basket cases), then there is reason for optimism perhaps. I like shares where strong performance is temporarily obscured by fixable problems at a particular division, as that can allow a decent value entry point.
Outlook - this sounds reasonably encouraging;
This period has once again demonstrated the Group's ability to deliver good results even when some of our markets are performing at less than full capacity. This continues the excellent progress delivered over previous years.
We see opportunity across all divisional segments in Vp and will continue to deploy our robust financial strength to deliver further value growth to our shareholders.The Board has every reason to believe that the Group will be in a position to…
