REG - Vp PLC - Interim Results
26/11/2024 07:00
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RNS Number : 5891N Vp PLC 26 November 2024
26 November 2024
Vp plc
('Vp', the 'Group' or the 'Company')
Interim Results
Robust performance and refreshed operating model positioning the Group well
for future market opportunities
Vp plc, the equipment rental specialist, today announces its Interim Results
for the period ended 30 September 2024 ('the period').
Financial highlights
30 Sept 2024 30 Sept 2023 % change
Revenue (£m) 192.5 190.9 1%
Adjusted profit* (£m) 21.0 21.5 (2)%
Return on average capital employed* 14.7% 14.7% -
Adjusted earnings per share* (pence) 39.0 39.3 (1)%
Interim dividend (pence per share) 11.5 11.5 -
Adjusted EBITDA* (£m) 47.0 47.6 (1)%
Net debt excluding lease liabilities* (£m) 140.4 133.4 (5)%
Capital investment in rental fleet (£m) 38.5 27.8 39%
Statutory profit before tax (£m) 19.5 19.9 (2)%
Basic earnings per share (pence) 36.2 36.4 (1)%
* These measures are explained and reconciled in the Alternative Performance
Measures section in note 14 below.
· Robust performance despite challenges in some end markets
· Continued sector-leading return on average capital employed (ROACE*)
at 14.7%
· Increased investment in rental fleet to support growth and transition
towards greener solutions with £39m fleet capex in the period
· Robust balance sheet with leverage* expected to be c.1.5x at end of
the year, well within stated target
· Interim dividend of 11.5 pence per share, continuing 30+ years of
uninterrupted track record
Strategy update and operational highlights
· Good progress on refreshed operating model:
o Transition towards centralisation of rehire operations, management of key
strategic customers and procurement activities to drive growth and operational
efficiencies
o Investment in the leadership of Technology, Health & Safety and
Sustainability, and Procurement
· Ongoing review of end market sectors and improved divisional
collaboration to maximise customer opportunities:
o Launch of Vp Rail, an integrated rail solution providing customers with
direct access to all the Group's rail specialisms
· Acquisition of Charleville Hire & Platform Ltd ('CPH') in early
October, one of Ireland's leading specialist powered access companies,
progressing M&A strategy and providing a platform for growth in the
buoyant Republic of Ireland market
Current trading and outlook
The Group continues to make good progress on delivering its refreshed
strategy.
Vp continues to trade strongly in its Infrastructure and Energy markets, where
positive momentum and market opportunity provide confidence. Headwinds and
challenging conditions continue to impact General Construction and
Housebuilding, which are expected to remain subdued over the short term.
We note the upcoming changes to National Insurance and National Minimum Wage
which, before mitigating actions, will have an impact of c£4m on the Group in
the next financial year.
The Group remains in a strong financial position with an excellent track
record of delivery and further opportunity to drive performance from increased
collaboration across its specialist divisions.
We expect performance for the full year to be in line with market
expectations.
Commenting on the Interim Results, Anna Bielby, Chief Executive of Vp plc,
said:
"Due to its specialist businesses and diversified revenue streams, the Group
has delivered a robust performance in the first half of the year, despite
challenging conditions in some end markets.
"In parallel, Vp is progressing well with its refreshed strategy; centralising
operations and investing in people. While market headwinds persist in the
short-term, management remains encouraged by market opportunities,
particularly in areas such as Rail, Water and Transmission.
"These opportunities, alongside strategic progress, a strong financial
position and increased investment in the rental fleet, position the Group well
for the future."
Analyst Briefing: 9.30am GMT Today, Tuesday 26 November 2024
A live briefing for sell-side analysts will be hosted at the offices of Sodali
& Co, The Leadenhall Building, 122 Leadenhall Street, London, EC3V 4AB, at
9.30am GMT today. After the briefing has finished, an audio webcast of the
presentation will be made available for retail investors on the Group's
Investor Relations website here (https://www.vpplc.com/investors) .
Presentation with Equity Development: 11am GMT, Thursday 28 November 2024
Vp management will host an online presentation for retail investors via Equity
Development at 11am GMT on Thursday 28 November. The session is open to all
existing and potential shareholders, and registration is free. Questions can
be submitted during the presentation and will be addressed at the end. To
register for the event, please click here
(https://www.equitydevelopment.co.uk/news-and-events/vp-interim-investor-presentation-28november2024)
. A recording will be available shortly after the event on Equity
Development's website here
(https://www.equitydevelopment.co.uk/research/tag/vp) and Vp's website here
(https://www.vpplc.com/investors) .
Investor Meet Company Presentation: 11am GMT, Friday 29 November 2024
Vp management will host a live online presentation and Q&A at 11am GMT on
Friday 29 November on the Investor Meet Company ("IMC") platform. The
presentation is open to all existing and potential shareholders. Questions can
be submitted pre-event on the IMC dashboard up until 9am GMT on the day before
the meeting, or at any time during the live presentation. Investors can sign
up to IMC and register to meet Vp via:
https://www.investormeetcompany.com/vp-plc/register-investor
(https://www.investormeetcompany.com/vp-plc/register-investor) . Investors who
already follow Vp on the IMC platform will automatically be invited.
- ENDS -
For further information:
Vp plc
Anna Bielby, Chief Executive Tel: +44 (0) 1423 533 400
Keith Winstanley, Chief Financial Officer www.vpplc.com (http://www.vpplc.com)
Media enquiries:
Justin Griffiths/Nick Johnson/Amy Gibson Tel: +44 (0) 2071 006 451
vp@client.sodali.com
(https://vpplc-my.sharepoint.com/personal/lmansf_vpplc_com/Documents/vp@client.sodali.com)
Notes to Editors
Vp plc is a specialist equipment rental business providing equipment, people,
services and support for specialist projects. It focuses on niche sectors
principally in the Infrastructure, Construction, Housebuilding and Energy
markets in the UK and overseas. Businesses include: Groundforce, TPA, Torrent
Trackside, Brandon Hire Station, ESS, MEP Hire, CPH, UK Forks, Airpac Rentals
and Tech Rentals.
Our approach to environmental and social impact is guided by our core values
and responsible business framework, for more information go to:
www.vpplc.com/esg-and-governance/ (http://www.vpplc.com/esg-and-governance/)
Chief Executive's Review
Our specialist businesses and diversified revenue streams have enabled us to
deliver a robust performance in the first half of the year, despite
challenging conditions in some end markets.
While short-term headwinds exist, we remain encouraged by market
opportunities, particularly in Infrastructure.
In addition to external market factors, as part of our refreshed strategy, we
are progressing a number of changes and initiatives with a focus on delivering
growth and driving operational excellence.
These improvement measures, combined with a strong financial position and
increased investment in the rental fleet, position the Group well to take
advantage of the significant market opportunities which exist in the medium to
long-term, particularly in areas such as Rail, Water and Transmission.
Progress includes:
Divisional collaboration - Our specialist divisions are at the heart of Vp and
we are focused on improving their ability to work closely together to support
our major customers and projects. By collaborating more, we can maximise the
opportunities which exist in both external markets and with our customers. A
key enabler for this is our digital roadmap which is progressing well.
End market focus - In the period, and building on feedback from our customers,
we have commenced a group-wide review of end market sectors starting with the
creation of a dedicated Director of Vp Rail, to lead our rail offerings across
the Group. This provides a more joined-up approach, giving customers easier
access to our specialist capabilities and offerings.
Growth through M&A - We continue to pursue our M&A strategy, and were
pleased to complete the acquisition of CPH in early October. We see this
specialist business as a strong fit for the Group and are excited about our
ability to grow the business to take advantage of opportunities that exist in
the buoyant Republic of Ireland market. CPH also provides complementary
specialisms to our existing divisions. We continue to look at options to
rebalance the Group's offerings, including opportunities to divest any
business which does not fully align with our strategy.
Refreshed operating model - We have reviewed our operating model to ensure
that we use our scale to drive simplicity and efficiency in the way we work.
Where it makes sense to do so, we are in the process of centralising certain
functions, for example rehire operations, management of key strategic
customers and our procurement activities. This will drive efficiencies, new
opportunities and cost savings. The investment in our digital roadmap will
facilitate this, making it easier for our customers to work with us.
The right team - To deliver our strategy, we have made further additions to
the senior team including the leadership of Technology, Health & Safety
and Sustainability, and Procurement.
Financial Review
Revenue in the period was £192.5m, a 1% increase on the prior period (H1
2024: £190.9m). Adjusted profit* was slightly down at £21.0m (H1 2024:
£21.5m). Segmental analysis of the Group's results is shown in note 3.
Return on average capital employed (ROACE)* was 14.7% (H1 2024: 14.7%)
demonstrating the continued sustainable quality of the Group's earnings.
Adjusted basic earnings per share* has decreased slightly to 39.0 pence per
share (H1 2024: 39.3 pence per share).
Net debt excluding lease liabilities is £140.4m (30 September 2023: £133.4m,
31 March 2024: £125.2m). The increase is mainly due to increased capex, in
particular within the Transmission sector in Germany where we have taken
advantage of market opportunity. Our investment prioritises those areas with
the highest return and growth potential. Despite the increase in net debt, we
continue to operate with significant headroom and well within our previously
stated leverage target of less than 2x.
Despite continuing to operate in a challenging credit environment,
particularly in Construction, our focus in this area has resulted in a
reduction to both Days Sales Outstanding (57 days, 30 September 2023: 61 days)
and lower impairment of trade receivables.
Post period end, the Group's revolving credit facility (RCF) was extended for
a further year to November 2027. In addition, NatWest replaced Bank of Ireland
within our banking club. The Group is pleased to welcome NatWest to the club
and thanks Bank of Ireland for its support. The first date of any debt
maturity in the Group is now January 2027 when a tranche of private placement
matures.
*These measures are explained and reconciled in note 14. Return on Average
Capital Employed includes an increase of 0.6% due to impairments recorded in
H2 2024.
Operating Review
The Group has experienced varying conditions in its end markets with
Infrastructure and Energy generally supportive, and more challenging
conditions in Construction and Housebuilding.
Infrastructure
We have seen growth in Infrastructure, where prospects and external spending
commitments provide confidence and where we have continued to invest capex.
We have experienced good momentum in the Water and Transmission sectors in the
period. In Rail, we have seen lower revenue than H1 2024 due to the delay in
spend caused by the transition from Control Period 6 to Control Period 7.
Despite this slightly slower start, we remain positive about the sector and we
expect our dedicated Vp Rail offering to maximise opportunities and drive best
value by working together to support major projects and customers.
Construction
During the period, the Construction market continued to be challenging and we
experienced a slight reduction in revenue alongside a tough credit
environment.
Within Construction, we continue to be more successful in our most specialist
areas. In these areas, we have seen growth compared with H1 2024 and we have
invested in capex in the period.
In General Construction, market conditions continue to be challenging, linked
to wider economic headwinds. This has impacted the performance of Brandon Hire
Station. In Brandon Hire Station, whilst improvements in business performance
have been slower than anticipated, our recovery plan continues and the steps
we are taking leave us well positioned to capitalise on market recovery. The
recovery plan is centred on refocussing the division to have the optimal
physical footprint with a real focus on the customer. We are also making
control and process improvements, helped by data and system enhancements as
part of our digital roadmap.
In addition to refocussing the core business, as part of the Group's operating
model changes, we are transitioning certain activities from Brandon Hire
Station into the Group's centre. This will allow areas such as our rehire
operations and management of strategic customers to operate in a way which
best serves the wider Vp Group, and will allow Brandon Hire Station to
concentrate on its core business and recovery plan. As a result of these
changes, we expect to incur exceptional costs in H2 FY25 and the year ending
31 March 2026.
Energy
The Energy market remains positive, with growth, strong demand and a good
level of project activity. During the period, we also benefitted from our
involvement in a number of industrial shutdown projects where our specialist
divisions have had the opportunity to work closely together to support
significant and highly specialised customer projects. We invested capex in the
period to take advantage of these supportive markets.
Housebuilding
We are encouraged by the UK Government's focus on Housebuilding, including
targets and progress in planning reform. Despite this, we continue to find
market conditions challenging with a decrease in revenue compared with H1
2024. We are adjusting our capex accordingly and managing our cost base as
tightly as possible.
Board update
After over ten years with the Group as a Non-Executive Director, Phil White
has advised the Board that he will retire and step down from the Board on 30
June 2025. Phil's extensive plc experience has been of great benefit to the
Group and the recruitment process for a successor has commenced.
Dividend
The Board is declaring an interim dividend of 11.5 pence per share (H1 2024:
11.5 pence per share) payable on 15 January 2025 to shareholders on the
register as at 6 December 2024. As previously stated, our target dividend
cover is 2x over the cycle and the interim dividend announced today maintains
the Group's 30+ year uninterrupted dividend track record.
Outlook
The Group continues to make good progress on delivering its refreshed
strategy.
Vp continues to trade strongly in its Infrastructure and Energy markets, where
positive momentum and market opportunity provide confidence. Headwinds and
challenging conditions continue to impact General Construction and
Housebuilding, which are expected to remain subdued over the short term.
We note the upcoming changes to National Insurance and National Minimum Wage
which, before mitigating actions, will have an impact of c£4m on the Group in
the next financial year.
The Group remains in a strong financial position with an excellent track
record of delivery and further opportunity to drive performance from increased
collaboration across its specialist divisions. We expect performance for the
full year to be in line with market expectations.
Anna Bielby
Chief Executive Officer
Condensed Consolidated Income Statement
For the period ended 30 September 2024
Six months to Six months to Full year to
30 Sept 2024 30 Sept 2023 31 Mar 2024
Note £000 £000 £000
Revenue 3 192,457 190,920 368,691
Cost of sales (141,508) (141,318) (275,703)
Gross profit 50,949 49,602 92,988
Administrative expenses (25,983) (22,977) (48,644)
Impairment losses on trade receivables (605) (1,828) (3,743)
Impairment of intangible assets - - (28,120)
Operating profit before amortisation and impairment of goodwill, trade names 25,865 26,370 49,496
and customer relationships and exceptional items
Amortisation and impairment of goodwill, trade names and customer (1,504) (1,573) (31,198)
relationships
Exceptional items 4 - - (5,817)
Operating profit 3 24,361 24,797 12,481
Net financial expense (4,816) (4,901) (9,635)
Profit before amortisation and impairment of goodwill, trade names and 21,049 21,469 39,861
customer relationships and exceptional items
Amortisation and impairment of goodwill, trade names and customer (1,504) (1,573) (31,198)
relationships
Exceptional items 4 - - (5,817)
Profit before taxation 19,545 19,896 2,846
Taxation 5 (5,271) (5,513) (8,137)
Profit/(loss) after tax 14,274 14,383 (5,291)
Pence Pence Pence
Basic earnings/(loss) per share 7 36.16 36.43 (13.41)
Diluted earnings/(loss) per share 7 36.03 36.12 (13.41)
Dividend per share 8 11.50 11.50 39.00
Condensed Consolidated Statement of Comprehensive Income
For the period ended 30 September 2024
Six months to Six months to Full year to
30 Sept 2024 30 Sept 2023 31 Mar 2024
£000 £000 £000
Profit/(loss) for the period 14,274 14,383 (5,291)
Other comprehensive (expense)/income:
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit pension scheme - - (391)
Tax on items taken to other comprehensive income - - 248
Items that may be subsequently reclassified to profit or loss
Foreign exchange translation difference (1,001) (772) (1,522)
Other comprehensive expense (1,001) (772) (1,665)
Total comprehensive income/(expense) for the period 13,273 13,611 (6,956)
Condensed Consolidated Statement of Changes in Equity
For the period ended 30 September 2024
Note Six months to Six months to Full year to
30 Sept 2024 30 Sept 2023 31 Mar 2024
£000 £000 £000
Profit/(loss) for the period 14,274 14,383 (5,291)
Other comprehensive expense (1,001) (772) (1,665)
Tax movements to equity 6 (12) (20)
Share based payments expense in the period 267 463 767
Net movement relating to shares held by Vp Employee Trust
(111) (698) (706)
Dividends to shareholders 8 (10,853) (10,460) (14,997)
Change in equity during the period 2,582 2,904 (21,912)
Equity at the start of the period 153,020 174,932 174,932
Equity at the end of the period 155,602 177,836 153,020
There were no movements in issued share capital, the capital redemption
reserve or share premium in the reported periods.
Condensed Consolidated Balance Sheet
At 30 September 2024
Note 30 Sept 2024 31 Mar 2024 30 Sept 2023
£000 £000 £000
Non-current assets
Property, plant and equipment 6 267,189 256,944 250,890
Intangible assets 26,904 28,572 56,970
Right of use assets 57,711 58,645 58,883
Employee benefits 1,778 1,853 2,240
Total non-current assets 353,582 346,014 368,983
Current assets
Inventories 9,600 9,548 9,321
Trade and other receivables 79,394 74,753 83,755
Income tax receivable 104 3,582 496
Cash and cash equivalents 9 9,034 6,061 9,214
Total current assets 98,132 93,944 102,786
Total assets 451,714 439,958 471,769
Current liabilities
Interest bearing loans and borrowings 9 - - (49,815)
Lease liabilities (16,177) (16,319) (16,056)
Overseas income tax payable (1,692) (1,501) -
Trade and other payables (64,455) (71,720) (70,135)
Total current liabilities (82,324) (89,540) (136,006)
Non-current liabilities
Interest bearing loans and borrowings 9 (149,465) (131,280) (92,786)
Lease liabilities (44,571) (45,642) (46,570)
Other payables - (667) -
Provisions (3,006) (3,160) (1,663)
Deferred tax liabilities (16,746) (16,649) (16,908)
Total non-current liabilities (213,788) (197,398) (157,927)
Total liabilities (296,112) (286,938) (293,933)
Net assets 155,602 153,020 177,836
Equity
Issued share capital
2,008 2,008 2,008
Capital redemption reserve 301 301 301
Share premium 16,192 16,192 16,192
Foreign currency translation reserve (3,041) (2,040) (1,290)
Retained earnings 140,142 136,559 160,625
Total equity 155,602 153,020 177,836
Condensed Consolidated Statement of Cash Flows
For the period ended 30 September 2024
Note Six months to Six months to Full year to
30 Sept 2024 30 Sept 2023 31 Mar 2024
£000 £000 £000
Cash flows from operating activities
Profit before taxation
19,545 19,896 2,846
Adjustment for:
Share based payment charges 267 463 767
Depreciation 6 22,442 22,664 44,138
Depreciation of right of use assets 8,659 8,367 16,488
Amortisation and impairment of intangibles 1,933 1,794 32,054
Financial expense 4,913 4,917 9,693
Financial income (97) (16) (58)
Profit on sale of property, plant and equipment (3,578) (4,350) (7,456)
Release of arrangement fees 185 93 427
Operating cash flow before changes in working capital and provisions 54,269 53,828 98,899
Increase in inventories (52) (406) (633)
(Increase)/decrease in trade and other receivables (4,641) (2,242) 6,760
(Decrease)/increase in trade and other payables (7,330) 484 2,082
(Decrease)/increase in provisions (154) 51 1,548
Cash generated from operations 42,092 51,715 108,656
Interest paid (3,183) (3,268) (6,521)
Interest element of lease liability payments (1,736) (1,634) (3,315)
Interest received 97 16 58
Income tax paid (1,502) (4,999) (9,233)
Net cash flows from operating activities 35,768 41,830 89,645
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
11,647 12,845 25,273
Purchase of property, plant and equipment (41,997) (33,840) (71,375)
Purchase of intangible assets (266) (176) (963)
Net cash flows used in investing activities (30,616) (21,171) (47,065)
Cash flows from financing activities
Purchase of own shares by Employee Trust (111) (698) (706)
Repayment of loans (5,000) (17,000) (76,000)
New loans 23,000 14,000 62,000
Arrangement fees - - (655)
Capital element of lease liability payments (8,942) (8,505) (17,275)
Dividends paid 8 (10,853) (10,460) (14,997)
Net cash flows used in financing activities (1,906) (22,663) (47,633)
Net increase/(decrease) in cash and cash equivalents 3,246 (2,004) (5,053)
Effect of exchange rate fluctuations on cash held (273) 78 (26)
Cash and cash equivalents at beginning of period 6,061 11,140 11,140
Cash and cash equivalents at end of period 9 9,034 9,214 6,061
Notes to the Condensed Financial Statements
1. Basis of Preparation
Vp plc (the "Company") is a company limited by shares, incorporated and
domiciled in the United Kingdom. Its registered office and principal place of
business is Central House, Beckwith Knowle, Otley Road, Harrogate, North
Yorkshire, HG3 1UD. Its shares are listed on the London Stock Exchange. The
Condensed Consolidated Interim Financial Statements of the Company for the
half year ended 30 September 2024 consolidate the financial information of the
Company and its subsidiaries (together referred to as the "Group").
The condensed interim financial statements have been prepared using accounting
policies set out in the Annual Report and Accounts 2024. They are unaudited
and have not been reviewed by the Company's auditor. This report has been
prepared in accordance with the UK-adopted International Accounting Standard
34 'Interim Financial Reporting' and the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct Authority.
The results for the year ended 31 March 2024 and the Consolidated Balance
Sheet as at that date are abridged from the Group's Annual Report and Accounts
2024 which have been delivered to the Registrar of Companies. The auditor's
report on those accounts was unqualified, did not draw attention to any
matters by way of emphasis and did not contain statements under sections 498
(2) or (3) of the Companies Act 2006.
The condensed interim financial statements do not constitute statutory
accounts within the meaning of Section 434 of the Companies Act 2006.
The interim announcement was approved by the Board of Directors on 25 November
2024.
The preparation of financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates. In preparing
these condensed consolidated interim financial statements, the significant
judgements made by management in applying the Group's accounting policies and
key sources of estimation uncertainty were the same as those that applied to
the consolidated financial statements for the year ended 31 March 2024.
The Group continues to be in a healthy financial position with total banking
facilities at the period end of £190.5 million, including an overdraft
facility. Since the year end, net debt excluding lease liabilities has
increased by £15.2 million to £140.4 million, which is £7.0 million higher
than 30 September 2023. The Board has evaluated the banking facilities and the
associated covenants on the basis of current forecasts, taking into account
the current economic climate. These forecasts have been subjected to
sensitivity analysis, involving the flexing of key assumptions reflecting
severe but plausible scenarios, including a downturn in economic activity.
Based on this assessment, the Directors have a reasonable expectation that the
Group will be able to continue in operation and meet its liabilities as they
fall due. Having reassessed the principal risks the Directors consider it
appropriate to adopt the going concern basis of accounting in preparing the
interim financial information.
2. Risks and Uncertainties
The principal risks and uncertainties facing the Group and the ways in which
they are mitigated are described on pages 52 to 55 of the 31 March 2024 Annual
Report and Accounts. As part of the interim reporting process, the Group's
Risk Committee conducted a comprehensive review of Vp's principal risks and
concluded that there had been no change to principal risks or risk levels. The
principal risks and uncertainties are: market and competition, people and
culture, fleet management and investment, health & safety, financial,
governance and legal/regulatory requirements, environmental, and technology
and IT resilience.
3. Summarised Segmental Analysis
Revenue Operating profit before amortisation and impairment of goodwill, trade names
and customer relationships and exceptional items
Restated Restated Restated Restated
Sept Sept Mar Sept Sept Mar
2024 2023 2024 2024 2023 2024
£000 £000 £000 £000 £000 £000
UK 162,629 165,573 318,685 21,368 22,073 40,875
International 29,828 25,347 50,006 4,497 4,297 8,621
192,457 190,920 368,691 25,865 26,370 49,496
Amortisation and impairment of goodwill, trade names and customer (1,504) (1,573) (31,198)
relationships
Exceptional items - - (5,817)
Operating profit 24,361 24,797 12,481
The segmental analysis is different from that presented in the annual
financial statements. Previously the segments were based on the historic
management location. Following a reorganisation of the internal reporting of
financial information, the UK segments now contain all divisions and
sub-divisions which are primarily operating in the UK. International segment
contains all divisions and sub-divisions which are primarily operating outside
the UK. Prior year balances have been restated into the new segmentation. A
full comparison of methodology will be included in the annual financial
statements for the year ending 31 March 2025.
Below is a summary of the disaggregation of revenue from contracts with
customers from the total revenue disclosed in the Condensed Consolidated
Income Statement:
Sept 2024 Sept 2023 Mar 2024
£000 £000 £000
Equipment hire 145,172 143,297 273,874
Services 34,656 32,666 61,966
Sales of goods 12,629 14,957 32,851
Total revenue 192,457 190,920 368,691
4. Exceptional Items
During the half year ended 30 September 2024, the Group incurred no
exceptional costs (H1 2024: £nil). In the year ended 31 March 2024, the Group
incurred restructuring and reorganisation costs relating to changes to the
Group's Board and senior leadership team of £1.6 million and branch closure
costs of £4.2 million. The net cash outflow from activities associated with
exceptional items in the half year ended 30 September 2024 is £1.2 million
(H1 2024: nil).
5. Income Tax
The effective tax rate is 27.0% in the half year ended 30 September 2024 (H1
2024: 27.7%). The effective rate for the period reflects the current standard
tax rate of 25% (H1 2024: 25%), as adjusted for estimated permanent
differences for tax purposes offset by gains covered by exemptions. The rate
includes the effect of higher statutory tax rates levied in Australia and
Germany.
6. Property, Plant and Equipment
Sept 2024 Mar 2024 Sept 2023
£000 £000 £000
Opening carrying amount 256,944 252,385 252,385
Additions 41,470 69,876 31,327
Depreciation (22,442) (44,138) (22,664)
Disposals (8,071) (17,815) (9,426)
Transfer to intangible assets - (2,072) -
Effect of movements in exchange rates (712) (1,292) (732)
Closing carrying amount 267,189 256,944 250,890
The value of capital commitments at 30 September 2024 was £8,554,000 (31
March 2024: £15,965,000).
7. Earnings per Share
Earnings per share have been calculated on 39,472,640 shares (H1 2024:
39,482,946 shares) being the weighted average number of shares in issue during
the period excluding those shares held by Vp Employee Trust. Diluted earnings
per share have been calculated on 39,613,501 shares (H1 2024: 39,820,019
shares) adjusted to reflect conversion of all potentially dilutive ordinary
shares. The calculation of diluted earnings per share does not assume
conversion, exercise, or other issue of potential ordinary shares that would
have an antidilutive effect on earnings per share.
Basic earnings per share before amortisation and impairment of goodwill, trade
names and customer relationships and exceptional items was 39.0 pence (H1
2024: 39.3 pence) ("Adjusted Basic EPS") and was based on an after-tax add
back of £1,128,000 (H1 2024: £1,124,000) in respect of the amortisation of
intangibles and exceptional items. Diluted earnings per share before
amortisation and impairment of goodwill, trade names and customer
relationships and exceptional items was 38.9 pence (H1 2024: 38.9 pence).
8. Dividends
The Directors have declared an interim dividend of 11.5 pence per share (H1
2024: 11.5 pence) payable on 15 January 2025 to shareholders on the register
as at 6 December 2024. The dividend declared will absorb an estimated £4.556
million (H1 2024: £4.537 million) of shareholders' funds.
The cost of dividends in the Statement of Changes in Equity is after
adjustments for the interim and final dividends waived by the Vp Employee
Trust in relation to the shares it holds for the Group's share option schemes.
9. Analysis of net debt
As at Cash Non-cash As at
1 Apr 2024 flow movements 30 Sept 2024
£000 £000 £000 £000
Cash and cash equivalents 6,061 2,973 - 9,034
Secured loans (132,000) (18,000) - (150,000)
Arrangement fees 720 - (185) 535
Net debt excluding lease liabilities (125,219) (15,027) (185) (140,431)
Lease liabilities (61,961) 10,678 (9,465) (60,748)
Net debt including lease liabilities (187,180) (4,349) (9,650) (201,179)
The Group has two private placements with PGIM Inc. for £65 million (maturing
in January 2027) and £28 million (maturing in April 2028). The Group also has
committed revolving credit facilities of £90 million which was refinanced in
November 2023. The Group also has overdraft facilities of
£7.5 million, leading to total available facilities of £190.5 million.
10. Related Party Transactions
Transactions between Group Companies, which are related parties, have been
eliminated on consolidation and therefore do not require disclosure. The Group
has not entered into any other related party transactions in the period which
require disclosure in this interim statement.
11. Contingent Liabilities
In an international group a variety of claims arise from time to time in the
normal course of business. Such claims may arise due to actions being taken
against group companies as a result of investigations by fiscal authorities or
under regulatory requirements. Provision has been made in these consolidated
financial statements against any claims which the directors consider likely to
result in significant liabilities.
12. Post balance sheet event
On 2 October 2024, the Group completed the acquisition of a majority interest
in Charleville Hire and Platform Ltd ('CPH'), a powered access business
incorporated in the Republic of Ireland.
Total consideration for the entire share capital of CPH includes an initial
cash consideration of
€12.1 million. 90% of the share capital was initially acquired, with the
remaining 10% to be acquired over a three-year period. Subject to continued
employment of the selling shareholders and business performance against
stretching EBITDA targets, a further maximum deferred and earn out payment of
€21.7 million may be payable across the second and third anniversaries of
the acquisition.
In November 2024, the Group extended its revolving credit facility, which now
matures in November 2027.
13. Forward Looking Statements
The Chief Executive's Statement includes 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. Statements in respect of the Group's
performance in the year to date are based upon unaudited management accounts
for the period 1 April 2024 to 30 September 2024. Nothing in this announcement
should be construed as a profit forecast.
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.
14. Alternative Performance Measures (APMs)
The Board monitors performance principally through adjusted and like-for-like
performance measures. Adjusted profit and earnings per share measures exclude
certain items including amortisation of intangible assets, goodwill impairment
charges and exceptional items.
The Board believes that such alternative measures are useful as they exclude
one-off (amortisation, impairment of intangible assets and exceptional items)
and non-cash (amortisation of intangible assets) items which are normally
disregarded by investors, analysts and brokers in gaining a clearer
understanding of the underlying performance of the Group from one year to the
next when making investment and other decisions. APMs in previous years have
excluded the net impact of IFRS 16. This adjustment has now been removed.
The key measures used as APMs are reconciled below:
Sept 2024 Sept 2023 Mar 2024
£000 £000 £000
Profit before tax as per Income Statement 19,545 19,896 2,846
Amortisation and impairment of goodwill, trade names and customer 1,504 1,573 31,198
relationships
Exceptional items - - 5,817
Adjusted profit before tax, amortisation and impairment of goodwill, trade 21,049 21,469 39,861
names and customer relationships and exceptional items APM (Adjusted profit)
Interest (excluding interest on lease liabilities) 3,084 3,271 6,319
Adjusted operating profit before tax, amortisation and impairment of goodwill, 24,133 24,740 46,180
trade names and customer relationships and exceptional items APM
Depreciation (excluding depreciation of right of use of assets) 22,442 22,664 44,138
Amortisation of software 429 221 856
Adjusted EBITDA APM 47,004 47,625 91,174
14. Alternative Performance Measures (continued)
Net margin of 10.9% (H1 2024: 11.2%) is calculated by dividing adjusted profit
before tax, amortisation and impairment of goodwill, trade names and customer
relationships and exceptional items by revenue.
Sept 2024 Sept 2023 Mar 2024
Pence Pence Pence
Basic earnings per share 36.2 36.4 (13.4)
Impact of amortisation and impairment of goodwill, trade names and customer 2.8 2.9 86.3
relationships and exceptional items after tax
Adjusted basic earnings per share APM 39.0 39.3 72.9
Sept 2024 Sept 2023 Mar 2024
£000 £000 £000
Net debt including lease liabilities 201,179 196,013 187,180
Lease liabilities (60,748) (62,626) (61,961)
Net debt excluding lease liabilities APM 140,431 133,387 125,219
Return on average capital employed (ROACE) is based on adjusted operating
profit before tax, amortisation and impairment of goodwill, trade names and
customer relationships and exceptional items as defined above divided by
average capital employed on a monthly basis using the management accounts
excluding IFRS16.
Leverage is defined as net debt divided by EBITDA using the management
accounts excluding IFRS16.
Responsibility statement of the directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
· the condensed consolidated set of interim financial statements has
been prepared in accordance with UK-adopted IAS 34 Interim Financial
Reporting;
· the interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication
of important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements;
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
By order of the Board
25 November 2024
The Board
The Directors who served during the six months to 30 September 2024 were:
Jeremy Pilkington (Chairman)
Anna Bielby (Chief Executive)
Keith Winstanley (Chief Financial Officer)
Phil White (Non-Executive Director)
Stuart Watson (Non-Executive Director)
Mark Bottomley (Non-Executive Director)
- Ends -
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