Transcript Vp plc

Vp plc
The Equipment Rental Specialist
Interim Results
For the six months ended
30 September 2005
Agenda
• Highlights :
– Jeremy Pilkington – Chairman
• Financial Review :
– Mike Holt – Group Finance Director
• Business Review :
– Neil Stothard – Group Managing Director
An Excellent Start
•
Underlying PBT +19% to £5.9m – entirely organic,
no contribution from acquisitions
•
Group PBT +11% to £5.5m
•
EPS +10% to 8.96p
•
ROCE increased to 17%
•
Interim dividend lifted 11% to 1.95p
An Excellent Start
• Hire Station in profit - £0.9m v p.y. £0.3m loss
• 3 significant acquisitions completed
:
Pivotal Services Group – July : £4.5m
:
TPA – November : £11.5m + 3 year earn-out
:
Dudley Vale – November : £3.5m
• New banking facilities
Financial Review
Mike Holt
Group Finance Director
Financial Highlights
Revenue
PBIT*
Operating margin*
PBT
ROCE
Net Debt
Gearing
H1
30 Sept 05
£47.4m
£6.0m
12.7%
£5.5m
17.3%
H1
30 Sept 04
£45.6m
£5.1m
11.2%
£4.9m
16.8%
£5.7m
10%
31 Mar 05
£2.4m
4%
+4%
+18%
+13%
+11%
+3%
*Pre Pivotal one-off costs
Earnings per share and Dividends
H1
H1
30 Sep 05 30 Sep 04
Full Year
31 Mar 05
Basic EPS
8.96p
8.14p
+10%
16.62p
Fully diluted EPS
8.66p
7.86p
+10%
16.09p
Dividend per share
1.95p
1.75p
+11%
5.75p
Revenue(£m)
Actuals
Brewin Forecast
120
102.3
100
80
66.8
75.5
83.5
90.0
60
40
20
0
2002
2003
2004
2005
2006
Profit Before Interest and Tax (£m)
Actuals
Brewin Forecast
11.4
12
10.3
10
8
8.4
9.0
7.2
6
4
2
0
2002
2003
2004
2005
2006
Restated for IFRS
Return on Capital Employed (%)
%
20
18
16
14
12
10
8
6
4
2
0
17.7
15.6
17.3
15.3
12.7
H1
2002
2003
2004
2005
2006
Restated for IFRS
Dividend / Earnings (pence per share)
Dividend
18
16
14
12
10
8
6
4
2
0
EPS
16.62
13.09
14.06
10.86
8.96
4.2
4.5
5.0
5.75
1.95
H1
H1
2002
2003
2004
2005
2006
Basic EPS
Balance Sheet
30 Sept 05
£m
51.3
9.8
61.1
31 Mar 05
£m
48.7
7.4
56.1
2.6
26.3
2.4
31.2
2.1
22.1
5.8
30.0
+24%
+19%
-59%
2.1
23.1
4.8
30.0
Current liabilities
(20.5)
(15.2)
+35%
(17.7)
Loans
Pension obligations
Deferred tax
Non current liabilities
(8.1)
(3.7)
(2.9)
(14.7)
(8.0)
(3.9)
(3.1)
(15.0)
+1%
-5%
-5%
(8.0)
(2.6)
(3.5)
(14.1)
57.1
55.9
+2%
53.5
Property, plant and equipment
Intangibles
Non current assets
Inventories
Receivables
Cash
Current assets
Net Assets
+5%
+32%
30 Sep 04
£m
47.9
7.4
55.3
Operating Cash Flow
+5%
Full Year
31 Mar 05
£m
10.3
11.0
(1.2)
20.1
182%
-5%
195%
22.3p
21.5p
+4%
46.5p
70
69
H1
30 Sept 05
£m
5.6
5.7
(1.0)
(0.6)
9.7
H1
30 Sept 04
£m
5.1
5.7
(0.4)
(1.1)
9.3
Cash to Profit Ratio
173%
Cash Flow per Share
Operating profit
Depreciation
Profit on sale of plant and equipment
Change in net working capital
Net Cash Inflow
Debtor days
+10%
69
Cash Flow
H1
30 Sept 05
£m
Operating cash flow
9.7
Gross capex
(8.3)
Disposals of plant and equipment
2.7
Interest
(0.1)
Tax
(1.4)
Free cash flow
2.6
Acquisitions
(4.7)
Dividends paid
Acquired debt
(0.1)
Purchase of own shares
(1.1)
Movement in net debt
(3.3)
Capex including leases
11.1
H1
Full Year
30 Sept 04
31 Mar 05
£m
£m
9.3
+5%
20.1
(6.3)
+33%
(15.1)
2.7
6.0
(0.2)
(0.3)
(1.5)
(3.3)
4.0
-35%
7.4
0.1
(0.2)
(2.2)
(0.1)
0.1
4.0
5.1
8.3
+34%
16.1
Acquisitions
Pivotal Services :
- initial cost £4.5m
- adjusted cost £3.9m
Trax Portable Access :
- initial cost £11.5m
- deferred £7.9m
Dudley Vale :
-cost £3.5m
Net Debt
Bank loans
Loan notes/leases
Cash
Net Debt
Gearing
30 Sept 05
£m
8.0
0.1
(2.4)
5.7
31 Mar 05
£m
8.0
0.2
(5.8)
2.4
30 Sep 04
£m
8.0
0.2
(4.8)
3.4
10%
4%
6%
Loan Facilities
• Existing loan facilities replaced by a new loan facility:
- Five year facility (previously 3 years)
- £45m facility (previously £8m)
- Club deal (previously single bank)
• New facility provides further leverage to fund future
acquisitions
Business Review
Neil Stothard
Group Managing Director
Segmental Analysis
Groundforce
UK Forks
Airpac Oilfield Services
Hire Station
Torrent Trackside
TOTAL
H1 Sales
30 Sept 05
30 Sept 04
£m
£m
11.5
12.7
7.5
6.4
2.2
2.2
20.0
17.4
6.2
6.9
47.4
45.6
H1 Profit
30 Sept 05
30 Sept 04
£m
£m
2.6
2.8
1.3
0.8
0.5
0.6
0.9*
(0.3)
0.8
1.3
6.0*
5.1
*Pre-Pivotal one-off costs
Groundforce
-Groundforce Shorco
-Piletec Dudley Vale
-Stopper Specialists
-Survey Technology
Excavation support systems and specialist products for the
water, civil engineering and construction industries
Groundforce
H1
30 Sept 05
H1
30 Sept 04
Sales
£11.5m
£12.7m
-9%
Profit
£2.6m
£2.8m
-7%
Margin
22.6%
22.1%
Fleet Capex
£1.2m
£1.2m
Groundforce
•
Market Leader in ground support systems
•
Core shoring demand remained good
•
AMP4 delay affecting specialist divisions
•
Acquisition of Dudley Vale - November 2005
•
Continuing fleet rationalisation programme
•
New products introduced e.g. Formwork
•
Division remains well placed to embrace AMP4 driven demand
UK Forks
Rough terrain material handling equipment for industry,
residential and general construction
UK Forks
H1
30 Sept 05
H1
30 Sept 04
Sales
£7.5m
£6.4m
+17%
Profit
£1.3m
£0.8m
+72%
Margin
16.9%
11.5%
Fleet Capex*
£4.8m
£2.5m
*Including new operating lease commitments
UK Forks
•
Unique service offering – attracting customers
•
Progress in housebuilding and general construction
•
Regional and national successes
•
Revenue growth has leveraged structure
•
Fleet growth to over 1,200 machines
•
ROCE continues to improve
•
Markets stable but remain very competitive
Airpac Oilfield Services
-Aberdeen
-Great Yarmouth
-Singapore
Equipment and service providers to the international oil and
gas exploration and development markets
Airpac Oilfield Services
H1
30 Sept 05
H1
30 Sept 04
Sales
£2.2m
£2.2m
+4%
Profit
£0.5m
£0.6m
-9%
Margin
22.5%
25.8%
Fleet Capex
£0.2m
£0.2m
Airpac Oilfield Services
•
Solid performance
•
Strong demand from North Sea – well testing and rig
maintenance
•
International project activity quieter but improving
•
Product expansion
•
Geographic growth opportunities remain
•
Market prospects remain positive
Hire Station
-Hire Station
-ESS Safeforce
-Lifting Point
Tools and specialist products for industry and construction
Hire Station
H1
30 Sept 05
H1
30 Sept 04
Sales
£20.0m
£17.4m
Profit
£0.9m*
£(0.3)m
Margin
4.0%
(2.0)%
Fleet Capex
£3.7m
£3.0m
+16%
*Pre Pivotal one-off costs £0.4m
Hire Station
• Substantial profit turnaround after prior year losses
• Management actions bear fruit
• Key account wins aid revenue growth
• Efficient cost structure in place
• Investment in core products
• One Call central hire desk complete
Hire Station
• Specialist Products further recovery
• Pivotal acquisition key development
• ESS Safeforce created – market leader
• Confined Space Entry training
• Potential remains for further improvement overall
Torrent Trackside
Portable rail infrastructure equipment, lighting and related
services for the railway renewals and maintenance industry
Torrent Trackside
H1
30 Sept 05
H1
30 Sept 04
Sales
£6.2m
£6.9m
-11%
Profit
£0.8m
£1.3m
-41%
Margin
12.6%
19.2%
Fleet Capex
£1.0m
£0.9m
Torrent Trackside
•
Remains a quality business
•
Network Rail maintenance plant contract impact
•
Maintenance activities continue as secondary
provider
•
Renewals remains stable
•
Further progress with LUL
•
Product expansions/further opportunities
•
Market remains flat
ACQUISITIONS
TPA
Portable roadway systems, bridging, fencing and barriers
TPA
• Acquired 4 November 2005
• Portable aluminium roadways
• Fencing and barriers
• Events, construction, rail and power transmissions
markets
• Experienced management team
• Market opportunities remain strong
• Business positioned for further growth
• Separate trading division of Vp
Pivotal Services Group
• Acquired July 2005 from Babcock
• Safety equipment rental sales and maintenance
• Confined Space Entry Training
• Integration with Safeforce, trading as ESS Safeforce
• Health & Safety and Management Development training
• Now trading as Pivotal Performance
Dudley Vale
• Acquired 25 November 2005 from GE
• Rental and sale of piling hammers and pile breakers
• Merged with Piletec division of Groundforce
• Trading as Piletec Dudley Vale
Summary
• Period of further profit improvement – all organic
• Business markets varied, but generally positive
• Delivering on growth strategy with acquisitions
• Further opportunities for growth will be pursued
• New banking facilities in place
• Finances remain in excellent shape
• Platform set for coming year
• Continuing to deliver value to shareholders
Total Shareholder Return
600.0
500.0
VP plc
FTSE Small Cap
400.0
300.0
200.0
100.0
0.0
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