REG - Vp PLC - Interim Results
30/11/2021 07:00
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RNS Number : 9532T Vp PLC 30 November 2021
Press Release 30 November 2021
Vp plc
('Vp' or the 'Group')
Interim Results
'Strong trading performance across all businesses
with significant growth in revenues with market leading profit margins'
Vp plc, the equipment rental specialist, today announces its Interim Results
for the six months ended 30 September 2021 ('H1 2022' or the 'period').
Financial Highlights
H1 2022 H1 2021
Revenues (£m) 176.1 142.1
Profit before tax, amortisation and exceptional items (£m) 20.2 8.6
Return on average capital employed 13.5% 10.3%
Basic EPS pre-amortisation and exceptional items (pence) 37.7 17.4
Proposed interim dividend (pence per share) 10.5 Nil
EBITDA (£m) 44.5 34.1
Net debt (£m) 131.7 118.7
Capital investment in rental fleet (£m) 31.7 14.6
Statutory profit before taxation (£m) 18.6 (6.0)
Profit before tax, amortisation and exceptional items inclusive of IFRS 16
impact (£m)
20.2 8.5
Operational Highlights
· Market leading profit margins
· Strong recovery in trading created opportunities for profitable
reinvestment into the fleet
· UK Division delivered excellent performance driven by infrastructure
and buoyant house building
· Overall demand in commercial construction and civil engineering has
been solid
· International Division stable
· Substantial progress in ESG initiatives with new road map to net zero
o Focus of capital investment heavily focused towards eco-friendly solutions
o Signed up to the Science Based Targets Initiative to reach net-zero global
emissions by 2050
Outlook / Current H2 2022 Trading
· First strategic acquisition since COVID of M&S Hire
o Excellent addition to the successful MEP Hire business which complements
existing operations well
· UK and International divisions' prospects look positive with renewed
confidence
o Volumes in AMP7 and CP6 expected to pick up in H2 and will provide
significant upside potential for 2022
· Efficiently managing inflationary pressures and supply chain
constraints
· Solid trading expected to continue given the positive momentum being
seen across Infrastructure, Construction and Housebuilding
· Current trading is positive and in line with Board expectations for
the full year
Commenting on the Interim Results, Jeremy Pilkington, Chairman of Vp plc,
said: "I am pleased to report an excellent set of results for the period,
reflecting a strong and continuing recovery in all of our businesses and
delivery of market leading profit margins. Once again Vp has demonstrated the
resilience of our distinctive business model and the inherent strength of our
businesses.
"Very encouragingly, some of our businesses are already trading in line or
ahead of expectations. Where this is not the case, it is generally down to
factors such as the longer-term cyclical nature of some of our infrastructure
markets and localised supply chain constraints which are impacting elements of
the construction sector. We expect these markets will recover and this
remains an opportunity for further growth.
"In the light of these strong results and our confidence in the future
prospects of the Group, the Board is declaring an interim dividend of 10.5
pence per share, reinstating our progressive dividend policy. The
combination of our financial strength, unique market positions and exceptional
team of people will continue to deliver strong results for all stakeholders
and we look to the future with much optimism."
- Ends -
The information contained in this announcement is deemed by the Company to
constitute inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
For further information:
Vp plc Tel: +44 (0) 1423 533 400
Jeremy Pilkington, Chairman www.vpplc.com (http://www.vpplc.com)
Neil Stothard, Chief Executive
Allison Bainbridge, Group Finance Director
Media enquiries:
Buchanan
Henry Harrison‐Topham / Jamie Hooper / George Beale Tel: +44 (0) 20 7466 5000
Vp@buchanan.uk.com (mailto:Vp@buchanan.uk.com) www.buchanan.uk.com (http://www.buchanan.uk.com)
CHAIRMAN'S STATEMENT
I am pleased to report a very good set of results for the period, reflecting a
strong and continuing recovery in all of our businesses and delivery of market
leading profit margins.
We have, as expected, recovered strongly against the COVID impacted comparable
period last year, however we must look towards the previous trading year of
2019/2020 as a more appropriate reference period. Very encouragingly,
against this measure, some of our businesses are already trading in line or
ahead of these pre-Covid comparators. Where this is not the case, it is
generally a result of the longer-term cyclical nature of certain of our
infrastructure markets and localised supply chain constraints which are
impacting elements of the construction sector. We expect these markets will
recover through the second half of the year and beyond and remain an
opportunity for further growth.
In the six months to 30 September 2021, profits before tax, amortisation and
exceptional items rose to £20.2 million (H1 2021: £8.6 million) on revenues
strongly ahead at £176.1 million (H1 2021: £142.1 million). Statutory
profit before taxation was £18.6 million (H1 2021: £6.0 million loss).
Earnings per share pre-amortisation and exceptional items rose to 37.7 pence
per share (H1 2021: 17.4 pence per share) and EBITDA increased to £44.5
million (H1 2021: £34.1 million). Return on average capital employed was a
robust 13.5% (H1 2021: 10.3%), well ahead of Vp's cost of capital and again
demonstrating the high quality of Group earnings.
Capital investment in equipment was £31.7 million (H1 2021: £14.6 million)
as the strong recovery in trading created significant opportunities for
profitable re-investment into the Group's hire fleet. The focus has been
heavily focused towards eco-friendly, lower emissions solutions including
investment in the largest solar powered lighting fleet in the UK Rail sector
and significant substitution of equipment with battery / cordless models.
The increased level of demand across our businesses has also allowed us to
improve pricing on certain product lines and has encouraged us to place
substantial advance orders for H2 2022 to ensure that we have appropriate
capacity to meet future customer needs. Borrowings at the period end
increased to £131.7 million (H1 2021: £118.7 million) reflecting this
increased fleet investment. Against total facilities of £190.5 million,
this gives us generous further investment headroom.
In my last Chairman's Statement, I commented that over a number of years the
level of dividend distributions had drifted outside of our policy guidance.
The substantial increase in this year's interim dividend reflects a rebasing
of policy towards 2x cover and the reinstatement of a more balanced
interim/final split in line with our long term progressive dividend policy.
In the light of these results and our confidence in the future prospects of
the Group, the Board is therefore declaring an interim dividend of 10.5 pence
per share (H1 2021: Nil pence per share) payable on 11 January 2022 to
shareholders registered as at 10 December 2021. This represents a
substantial increase on the interim dividend for the year ended 31 March 2020
of 8.5 pence per share.
UK Division
The UK Division delivered a good first half as trading conditions recovered
with operating profits before amortisation and exceptional items more than
doubling to £21.8 million (H1 2021: £9.9 million) on revenues ahead 25% to
£160.8 million (H1 2021: £128.9 million). Statutory operating profit was
£23.3 million (H1 2021: £11.5 million).
Major infrastructure projects, such as HS2, remain key markets for us and have
been supported by very buoyant housebuilding activity. The AMP7 (Water) and
CP6 (Rail) infrastructure programmes have seen some delays in their
implementation but we anticipate that volumes will improve in the second half
and beyond.
Commercial construction and civil engineering activity has been a little
softer, primarily in the South East market, impacted to some extent by supply
chain issues and lingering Covid restrictions but overall demand and activity
has been solid.
We are pleased to have announced on the 17 November 2021, the acquisition of
the entire issued share capital of M&S Hire Limited ('M&S') for a cash
consideration of £2.8 million. M&S is a specialist rental business
engaged in the supply of access systems and working at height solutions to the
commercial fit out sector in the Greater London market. M&S will be
integrated into Vp's MEP Hire business and we are delighted to welcome the
team in what I am sure will be an excellent addition to our very successful
MEP Hire division.
International Division
Operating profits before amortisation and exceptional items reduced marginally
to £0.7 million (H1 2021: £0.9 million) on revenues of £15.3 million (H1
2021: £13.2 million). Statutory operating profit was £0.7 million (H1
2021: £0.9 million).
Our Australian based business TR Group, has seen recovery in most of its
markets despite the recurring and aggressive lockdown policies adopted in the
region, which are now gradually being relaxed.
In the period, our Airpac Bukom business has rebranded as Airpac Rentals -
Energy Industry Solutions to better reflect its re-orientation towards the
broader energy sector as a whole and away from its historic focus on oil and
gas. There have been some early encouraging signs of improvements in
workloads and future prospects and we have accordingly committed capital
investment into these opportunities.
ESG
The most important assets in our business are our people. We understand the
need to create a rewarding and enjoyable environment within which everyone can
thrive and make the fullest contribution. We continue to invest strongly in
the learning and development needs of our employees and our commitment to
apprentice training has been expanded to include not only engineering but also
sales and LGV driver recruits. Our successful graduate recruitment programme
has also seen a fresh intake this year.
We have made substantial progress in developing our corporate responsibility
framework which includes the development of strong ESG policies, and in
particular our commitment to sustainability as a business. We have committed
to reducing all of our emissions in line with the most ambitious target set by
the Paris Climate Agreement to limit global warming to 1.5°C.
We have signed up to the Science Based Targets Initiative to reach net-zero
global emissions by 2050 and will, over the next 24 months, set targets for
the Group in line with these commitments. This will form a key element of
our short term roadmap to net zero (2021 - 2025) for the Group.
We have increased our engagement with customers to help their own
sustainability ambitions and have worked closely with our supply chain to help
introduce more environmentally friendly products as greener alternatives to
historic solutions. This process has significant momentum and has been
received well by our clients.
Rental is an inherently more environmentally friendly business model than
ownership as the sunk carbon footprint of an asset can be optimised across
many users and through time. We are very pleased to be engaged in a business
activity with such significant green credentials.
Outlook
I am very pleased to be able to report that we have successfully emerged from
a period of great uncertainty. Although the circumstances have been unusual,
the business challenges that we have had to confront are very familiar. Our
recovery has once again demonstrated the resilience of our distinctive
business model and the inherent strength of our market leading businesses.
We have seen strong demand from repair and maintenance, housebuilding and
major projects such as HS2 and Hinkley Point but certain of our core markets
are still not operating at full capacity. Engineering groundworks and more
specifically the AMP7 (Water) and CP6 (Rail) long term infrastructure
programmes are still some way off peak activity. As these sectors ramp up
into 2022 and beyond, they will deliver further significant upside for the
Group.
Our commitment to investing in the recovery is demonstrated by a strong
capital investment in the period under review together with a resumption of
our M&A activity with the acquisition post period end of M&S Hire.
Trading for the Group continues in line with the Board's expectations for the
full year and we remain confident of a positive full year outcome.
Looking further ahead, we believe that the combination of our track record,
financial strength, exceptional team of people and unique market positions
will continue to deliver very satisfactory results for all stakeholders.
Jeremy Pilkington
Chairman
30 November 2021
Condensed Consolidated Income Statement
For the period ended 30 September 2021
Six months to Six months to Full year to
30 Sept 2021 30 Sept 2020 31 Mar 2021
Note £000 £000 £000
Revenue 3 176,103 142,089 307,997
Cost of sales (133,354) (117,423) (259,887)
Gross profit 42,749 24,666 48,110
Administrative expenses (20,409) (26,683) (42,427)
Operating profit before amortisation and exceptional items
5 23,988 12,417 30,928
Amortisation and impairment (1,648) (1,650) (10,373)
Exceptional items 4 - (12,784) (14,872)
Operating profit/(loss) 3 22,340 (2,017) 5,683
Net financial expense 5 (3,786) (4,140) (7,752)
Profit before taxation, amortisation and exceptional items
5 20,202 8,477 23,176
Amortisation and impairment (1,648) (1,650) (10,373)
Exceptional items 4 - (12,984) (15,072)
Profit/(loss) before taxation 5 18,554 (6,157) (2,269)
Taxation 6 (4,992) (1,115) (2,332)
Profit/(loss) attributable to owners of the parent 13,562 (7,272) (4,601)
Pence Pence Pence
Basic earnings per share 8 34.26 (18.31) (11.62)
Diluted earnings per share 8 33.90 (18.31) (11.62)
Dividend per share 9 10.50 - 25.00
IFRS 16 was adopted on 1 April 2019 for statutory reporting. As a result,
the primary statements are shown on IFRS 16 basis. Note 5(a) provides the
impact on the consolidated income statement for the periods ended 30 September
2021, including the £1.5 million positive impact on operating profit before
amortisation and exceptional items (£22.5 million pre-IFRS 16) and £1.5
million adverse impact on net financial expense (£2.3 million pre-IFRS 16).
Condensed Consolidated Statement of Comprehensive Income
For the period ended 30 September 2021
Six months to Six months to Full year to
30 Sept 2021 30 Sept 2020 31 Mar 2021
£000 £000 £000
Profit/(loss) for the period 13,562 (7,272) (4,601)
Other comprehensive income/(expense):
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit pension scheme - - (795)
Tax on items taken to other comprehensive income - - 56
Items that may be subsequently reclassified to profit or loss
Foreign exchange translation difference (58) 2,509 439
Effective portion of changes in fair value of cash flow hedges
221 212 584
Other comprehensive income 163 2,721 284
Total comprehensive income/(expense) for the period 13,725 (4,551) (4,317)
Condensed Consolidated Statement of Changes in Equity
For the period ended 30 September 2021
Note Six months to Six months to Full year to
30 Sept 2021 30 Sept 2020 31 Mar 2021
£000 £000 £000
Total comprehensive income/(expense) for the period
13,725 (4,551) (4,317)
Tax movements to equity 535 62 165
Share option charge in the period 899 543 1,098
Net movement relating to shares held by Vp Employee Trust
(721) (1,516) (5,076)
Dividends to shareholders 9 (9,897) - (8,674)
Change in equity during the period 4,541 (5,462) (16,804)
Equity at the start of the period 153,117 169,921 169,921
Equity at the end of the period 157,658 164,459 153,117
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 2021
Note 30 Sept 2021 31 Mar 2021 30 Sept 2020
£000 £000 £000
Non-current assets
Property, plant and equipment 7 240,783 233,912 237,472
Goodwill 43,740 43,815 50,906
Intangible assets 18,848 20,551 22,209
Right of use assets 51,823 53,311 60,071
Employee benefits 2,127 2,175 2,986
Total non-current assets 357,321 353,764 373,644
Current assets
Inventories 6,794 7,342 7,780
Trade and other receivables 79,041 66,546 66,331
Cash and cash equivalents 10 10,471 15,917 35,728
Income tax receivable - 817 752
Total current assets 96,306 90,622 110,591
Total assets 453,627 444,386 484,235
Current liabilities
Interest bearing loans and borrowings 10 (85) (73,009) (17,664)
Lease liabilities (14,521) (14,909) (16,490)
Trade and other payables (87,517) (86,163) (91,033)
Income tax payable (100)
Total current liabilities (102,223) (174,081) (125,187)
Non-current liabilities
Interest bearing loans and borrowings 10 (142,107) (64,814) (136,766)
Lease liabilities (40,609) (41,980) (46,995)
Deferred tax liabilities (11,030) (10,394) (10,828)
Total non-current liabilities (193,746) (117,188) (194,589)
Total liabilities (295,969) (291,269) (319,776)
Net assets 157,658 153,117 164,459
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 (1,444) (1,386) 684
Hedging reserve - (221) (593)
Retained earnings 140,574 136,196 145,840
Total equity attributable to equity 157,631 153,090 164,432
holders of parent
Non-controlling interest 27 27 27
Total equity 157,658 153,117 164,459
Condensed Consolidated Statement of Cash Flows
For the period ended 30 September 2021
Note Six months to Six months to Full year to
30 Sept 2021 30 Sept 2020 31 Mar 2021
£000 £000 £000
Cash flows from operating activities
Profit/(loss) before taxation
18,554 (6,157) (2,269)
Adjustment for:
Share based payment charges 899 543 1,098
Depreciation 7 22,036 23,279 44,980
Depreciation of right of use assets 8,497 11,748 20,752
Amortisation and impairment of intangibles 1,648 1,650 10,373
Net financial expense 3,786 4,140 7,752
Profit on sale of property, plant and equipment (3,368) (3,573) (4,263)
(Payment)/release of arrangement fees (591) - 215
Operating cash flow before changes in working capital and provisions 51,461 31,630 78,638
Decrease in inventories 548 1,293 1,731
(Increase)/decrease in trade and other receivables (12,495) 17,972 17,717
Increase in trade and other payables 2,778 18,484 14,450
Cash generated from operations 42,292 69,379 112,536
Interest paid (2,317) (2,301) (4,723)
Interest element of finance lease payments (5) (19) (38)
Interest received 1 10 7
Income tax paid (2,895) (1,152) (2,867)
Net cash flows from operating activities 37,076 65,917 104,915
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
8,241 8,492 17,536
Purchase of property, plant and equipment (34,918) (18,652) (46,582)
Net cash flows used in investing activities (26,677) (10,160) (29,046)
Cash flows from financing activities
Purchase of own shares by Employee Trust (721) (1,516) (5,076)
Repayment of loans (42,044) (37,000) (53,000)
New loans 47,044 - 17,000
Payment of lease liabilities (10,296) (13,524) (24,107)
Dividends paid 9 (9,897) - (8,674)
Net cash flows used in financing activities (15,914) (52,040) (73,857)
Net (decrease)/increase in cash and cash equivalents
(5,515) 3,717 2,012
Effect of exchange rate fluctuations on cash held 69 259 (242)
Cash and cash equivalents at beginning of period 15,917 14,147 14,147
Cash and cash equivalents at end of period 10 10,471 18,123 15,917
Notes to the Condensed Financial Statements
1. Basis of Preparation
Vp plc (the "Company") is incorporated and domiciled in the United Kingdom.
The Condensed Consolidated Interim Financial Statements of the Company for the
half year ended 30 September 2021 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 2021. They are unaudited
and have not been reviewed by the Company's auditor. They are in accordance
with IAS 34 Interim Financial Reporting. The results for the year ended 31
March 2021 and the Consolidated Balance Sheet as at that date are abridged
from the Group's Annual Report and Accounts 2021 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 30 November
2021.
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 2021.
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 has increased by £9.8 million to
£131.7 million, which is £13.0 million higher than 30 September 2020. 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 page 28 and 29 of the 31 March 2021 Annual
Report and Accounts. The principal risks and uncertainties are market,
competition, investment / product management, people, safety, financial,
contractual and legal and regulatory requirements, which remain the same for
this interim financial report.
3. Summarised Segmental Analysis
Revenue Operating Profit Before Amortisation and Exceptional Items
Sept Sept Mar Sept Sept Mar
2021 2020 2021 2021 2020 2021
£000 £000 £000 £000 £000 £000
UK 160,761 128,880 281,309 23,256 11,483 30,266
International 15,342 13,209 26,688 732 934 662
176,103 142,089 307,997 23,988 12,417 30,928
Amortisation and impairment (1,648) (1,650) (10,373)
Exceptional items - (12,784) (14,872)
Operating Profit/(Loss) 22,340 (2,017) 5,683
Assets Liabilities
Sept 2021 Mar 2021 Sept Sept 2021 Mar 2021 Sept 2020
2020
£000 £000 £000 £000 £000 £000
UK 414,744 407,184 444,407 285,425 280,411 310,005
International 38,883 37,202 39,828 10,544 10,858 9,771
453,627 444,386 484,235 295,969 291,269 319,776
Net Assets
Sept 2021 Mar 2021 Sept 2020
£000 £000 £000
UK 129,319 126,773 134,402
International 28,339 26,344 30,057
157,658 153,117 164,459
Below summarises the disaggregation of revenue from contracts with customers
from the total revenue disclosed in the Condensed Consolidated Income
Statement:
Sept 2021 Sept 2020 Mar 2021
£000 £000 £000
Equipment hire 134,607 103,650 231,558
Services 29,712 28,658 51,723
Sales of goods 11,784 9,781 24,716
Total revenue 176,103 142,089 307,997
4. Exceptional Items
During the period the Group incurred no exceptional costs.
The prior period costs are analysed as follows:
Sept 2021 Sept 2020 Mar 2021
£000 £000 £000
Regulatory review costs - 11,137 7,519
Restructuring costs - 1,647 7,353
Exceptional Items in Operating Profit - 12,784 14,872
Financing expense - 200 200
Exceptional Items in Net Financial Expense - 200 200
Total Exceptional Items - 12,984 15,072
During the year to 31 March 2021, the Group incurred £15.1 million of
exceptional costs in relation to regulatory review costs, restructuring costs
and Covid-19 covenant amendments. Of this, £13.0 million was incurred
during the six months to 30 September 2020.
The regulatory review costs related to an investigation by the Competition and
Markets Authority which was concluded in February 2021.
5. Income Statement Reporting
(a) Impact on reporting of IFRS 16
IFRS 16 Leases was adopted from 1 April 2019. For comparative purposes with
previous years, key reporting measures are also calculated using the previous
accounting methodology of IAS 17.
Basic earnings per share before the amortisation of intangibles and
exceptional items decreased by 0.03 pence for the period to 30 September 2021
as a result of IFRS 16, compared to the previous accounting methodology of IAS
17. The financial impact of the transition on the Group's Consolidated Income
Statement and EBITDA is set out below:
Sept 2021 Sept 2021 Sept 2021
Excluding IFRS 16 IFRS 16 Impact
Reported
£000 £000 £000
Operating profit before amortisation 22,510 1,478 23,988
Operating profit 20,862 1,478 22,340
EBITDA 44,546 9,975 54,521
Net financial expense (2,298) (1,488) (3,786)
Profit before taxation and amortisation 20,212 (10) 20,202
Profit before taxation 18,564 (10) 18,554
Operating profit before amortisation, segment assets and segment liabilities
all increased as a result of the change in accounting policy. The IFRS 16
adjustments that have been posted to each segment for the half year ending 30
September 2021 are as follows:
Operating Profit before Amortisation and Exceptional Items
Pre IFRS 16 Adjustment Per
IFRS 16 Note 3
£000 £000 £000
UK 21,810 1,446 23,256
International 700 32 732
22,510 1,478 23,988
Assets Liabilities
Pre IFRS 16 Adjustment Per Note 3 Pre IFRS 16 Adjustment Per Note 3
IFRS 16 IFRS 16
£000 £000 £000 £000 £000 £000
UK 365,595 49,149 414,744 257,742 52,263 310,005
International 36,209 2,674 38,883 6,904 2,867 9,771
401,804 51,823 453,627 264,646 55,130 319,776
(b) Government support during Covid-19 Pandemic
The Group ceased to receive furlough payments in October 2020. As such, no
such amounts have been received in the six months to 30 September 2021.
During the six months to 30 September 2020, furlough payments of £8.4 million
received from various Governments were passed through to employees. These
were treated as a credit against employee costs in the Income Statement.
6. Income Tax
The effective tax rate is 26.9% in the period to 30 September 2021 (H1 2021:
-18.1%). The effective rate for the period reflects the current standard tax
rate of 19% (H1 2021: 19%), 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. In
addition, the deferred tax element of the effective tax rate reflects the
future increase in the corporation tax rate to 25%, which will apply from 1
April 2023. The effective tax rate before amortisation and exceptional items
is 26.3% (H1 2021: 21.1%).
7. Property, Plant and Equipment
Sept 2021 Mar 2021 Sept 2020
£000 £000 £000
Opening carrying amount 233,912 247,761 247,761
Additions 33,866 44,204 16,183
Depreciation (22,036) (44,980) (23,279)
Disposals (4,959) (13,273) (4,919)
Effect of movements in exchange rates - 200 1,726
Closing carrying amount 240,783 233,912 237,472
The value of capital commitments at 30 September 2021 was £19,792,000 (31
March 2021 £15,676,000).
8. Earnings Per Share
Earnings per share have been calculated on 39,581,223 shares (H1 2021:
39,711,727 shares) being the weighted average number of shares in issue during
the period. Diluted earnings per share have been calculated on 40,004,585
shares (H1 2021: 40,419,282 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 the amortisation of intangibles and
exceptional items was 37.64 pence (H1 2021: 16.84 pence) and was based on an
after tax add back of £1,335,000 (H1 2021: £13,959,000) in respect of the
amortisation of intangibles and exceptional items. Diluted earnings per
share before amortisation of intangibles and exceptional items was 37.24 pence
(H1 2021: 16.54 pence).
9. Dividends
The Directors have declared an interim dividend of 10.5 pence per share
payable on 11 January 2022 to shareholders on the register at 10 December
2021. The dividend declared will absorb an estimated £4.15 million.
No interim dividend was paid in 2020.
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.
10. Analysis of Net Debt
As at Cash As at
1 Apr 2021 Flow 30 Sep 2021
£000 £000 £000
Cash and cash equivalents 15,917 (5,446) 10,471
Revolving credit facilities / loans (138,000) (5,000) (143,000)
Arrangement Fees 320 591 911
Finance leases excluded under IFRS 16 (143) 40 (103)
(121,906) (9,815) (131,721)
In April 2021, the Group drew down a new £28 million seven year private
placement under the existing agreement with PGIM Inc., in addition to the £65
million drawn down in January 2020. In June 2021, the Group also refinanced
its £135 million committed revolving credit facilities with a new £90
million facility. The Group also has overdraft facilities of £7.5 million,
leading to total available facilities of £190.5 million.
11. 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.
12. Post balance sheet events
On 16 November 2021, the Group purchased the entire issued share capital of
M&S Hire Limited for a cash consideration of £2.8 million.
13. 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 are
likely to result in significant liabilities.
14. Forward Looking Statements
The Chairman'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 2021 to 30 September 2021. 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.
15. Alternative Performance Measures
(i) All performance measures stated as before
amortisation are also before impairment of intangibles and exceptional items.
(ii) Basic earnings per share pre amortisation and
exceptional items is reconciled to basic earnings per share in note 8.
(iii) Profit before tax, amortisation and exceptional items
is reconciled to profit before tax in the Consolidated Income Statement.
(iv) Return on average capital employed is based on profit
before tax, interest, amortisation and exceptional items divided by average
capital employed on a monthly basis using the management accounts. Profit
before tax, interest, amortisation and exceptional items is reconciled to
profit before interest and tax in the Consolidated Income Statement.
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 IAS 34 Interim Financial Reporting as adopted
by the EU;
· 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
30 November 2021
The Board
The Directors who served during the six months to 30 September 2021 were:
Jeremy Pilkington (Chairman)
Neil Stothard (Chief Executive)
Allison Bainbridge (Group Finance Director)
Steve Rogers (Non-Executive Director)
Phil White (Non-Executive Director)
- Ends -
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