Transcript Vp plc

Vp plc
Preliminary Results
Year Ended
31 March 2005
Jeremy Pilkington
Chairman
Neil Stothard
Group Managing Director
Mike Holt
Group Finance Director
Vp – an introduction
•
Specialist equipment rental
•
Breadth of sector exposure – earnings resilience
•
Market leading businesses
•
Core expertise in asset management
•
Excellent cash flow and strong balance sheet
•
Significant growth opportunities identified
Highlights
• 5 years of >10% earnings growth
• PBT increased by 14%* to £9.4m
• EPS increased by 14%* to 15.04 pence
• Return on capital employed increased to 17%
• Dividend increased 15% to 5.75 pence
* Excluding prior year exceptional property profit
Financial Review
Mike Holt
Group Finance Director
Financial Highlights
Turnover
PBT (pre-goodwill)
PBT (post-goodwill)
Operating Margin
EPS
Dividend
ROCE
Net Debt
Year Ended
31 March 2005
£m
£90.0m
£9.8m
£9.4m
10.8%
15.04p
5.75p
Year Ended
31 March 2004
£m
£83.5m
£8.6m*
£8.2m*
10.3%
13.19p*
5.00p
17%
£2.4m
16%**
£7.5m
+8%
+14%
+14%
+5%
+14%
+15%
* Excluding prior year exceptional property profit
** Restated for UITF 38
Balance Sheet
31 March 2005
£m
7.0
48.7
55.7
7.0
(4.0)
58.7
(2.4)
56.3
31 March 2004*
£m
7.1
49.9
57.0
6.6
(4.3)
59.3
(7.5)
51.8
Gearing
4%
14%
Net Assets Per Share (Pence)
122
112
Intangible Fixed Assets
Tangible Fixed Assets
Net Working Capital
Provisions
Capital Employed
Net Debt
Net Assets
* Restated for UITF 38
Operating Cash Flow
Year Ended
Year Ended
31 March 2005 31 March 2004
£m
£m
Operating Profit
9.7
8.7
Depreciation
11.5
11.6
Profit on Sale of Fixed Assets
(1.2)
(1.2)
Change in Net Working Capital
0.1
(2.3)
Net Cash Inflow
20.1
16.8
Cash to Profit Ratio
208%
194%
Cash Flow per Share
46.5p
38.7p
+12%
+20%
+20%
Cash Flow
Year Ended
Year Ended
31 March 2005 31 March 2004
£m
£m
Operating Cash Flow
20.1
16.8
Net Capital Expenditure
(9.0)
(6.5)
Net Interest
(0.3)
(0.4)
Tax
(3.3)
(2.4)
Free Cash Flow
7.5
7.5
Acquisitions and Disposals
(0.2)
(6.5)
Equity Dividends Paid
(2.2)
(2.0)
Cash Inflow (Outflow)
5.1
(1.0)
Acquired Net Debt
(0.3)
Movement in Net Debt
5.1
(1.3)
International Financial
Reporting Standards
Impact
P&L
B/S
Pensions
Low
Med
Share Schemes
Med
Med
Deferred Tax
Low
Low
Goodwill impairment
Financial Instruments
Low
Low
Low
Low
Impact through reserves of circa £4m on net assets of £56m
Operational Review
Neil Stothard
Group Managing Director
Segmental Analysis
Sales
Operating Profit
31 Mar 05 31 Mar 04
31 Mar 05 31 Mar 04
£m
£m
£m
£m
Groundforce
24.6
19.3
5.7
5.3
+7%
UK Forks
12.8
12.4
1.4
1.3
+11%
Airpac Oilfield Services
4.5
3.7
1.1
0.5
+114%
Hire Station
34.8
36.5
(0.7)
(0.4)
Torrent Trackside
13.3
11.6
2.5
2.3
+8%
TOTAL
90.0
83.5
10.1
9.0
+12%
-
Breadth of Markets – Earnings Resilience
12%
19%
24%
15%
5%
25%
Residential
Non-residential
Water and Civils
Oil and Gas
Rail
RMI
Groundforce
Excavation support systems and
specialist products for the water, civil
engineering
and
construction
industries
Groundforce
31 March 2005 31 March 2004
£m
£m
Sales
24.6
19.3
+27%
Profit
5.7
5.3
+7%
23.2%
27.5%
2.6
1.8
Margin
Fleet Capex
Groundforce
•
Market Leader in ground support systems
•
Good demand from AMP3/major projects
•
Successful integration of 03/04 acquisitions
•
Shoring hire fleet rationalisation
•
Improved national coverage – Piletec, Stoppers,
Survey
•
Product extension opportunities
•
Well positioned for future AMP4 activity when
commenced
UK Forks
Rough
terrain
material
handling
equipment
for
industry,
residential
and
general construction
UK Forks
31 March 2005 31 March 2004
£m
£m
Sales
12.8
12.4
+3%
Profit
1.4
1.3
+11%
11.0%
10.5%
3.1
2.5
Margin
Fleet Capex
UK Forks
•
Profit and return on capital growth
•
Focused product investment
– 10% ‘net’ growth in fleet
•
Further progress with major house-builders
•
Customer appetite for unique offering to the market
•
Housebuilding/Construction markets relatively
supportive
Airpac Oilfield Services
Equipment
and
service
providers to the international
oil and gas exploration and
development markets
Airpac Oilfield Services
31 March 2005 31 March 2004
£m
£m
Sales
4.5
3.7
+22%
Profit
1.1
0.5
+114%
24.4%
13.5%
0.5
0.5
Margin
Fleet Capex
Airpac Oilfield Services
•
Excellent performance
•
Strong demand from North Sea and South East
Asia
•
International project activity good
•
New competences being developed
•
Geographic growth opportunities
•
Market remains busy, with supportive crude oil
price
Hire Station
Tools
and
specialist
products for industry
and construction
Hire Station
31 March 2005 31 March 2004
£m
£m
Sales
34.8
36.5
Loss
(0.7)
(0.4)
-
-
5.7
4.2
Margin
Fleet Capex
(5%)
Hire Station
• Disappointing results
• Turnover reflects exit in prior year of surplus
locations
• Lifting Point responsible for majority of losses
• Tool hire profitable after a difficult 1st Quarter
• Repositioning year restoring stability
Hire Station
• Focus on core product lines and guaranteed
availability
• Launch of regional hire desk structure
• Lower cost network supporting local, regional and
national customers
• Specialist Products Division created December
2004
• Hire Station commenced New Year in line with
plan
Torrent Trackside
Portable
rail
infrastructure
equipment, lighting and related
services for the railway renewals
and maintenance industry.
Torrent Trackside
31 March 2005 31 March 2004
£m
£m
Sales
13.3
11.6
+15%
Profit
2.5
2.3
+8%
18.8%
19.8%
1.5
1.8
Margin
Fleet Capex
Torrent Trackside
•
Strong performance in challenging year
•
Renewals business – further expansion
•
Maintenance business steady but in transition
•
Network Rail maintenance plant tender
•
London Underground – new area for growth
•
Prospects positive overall in competitive
market
Summary
• A further year of excellent progress
• Profitability underpinned by cash generation and
strong balance sheet
• Hire Station well positioned to deliver recovery in
coming year
• Management appetite for growth and incentivised
accordingly
• Top quality teams across all divisions
• Opportunities to accelerate pace of growth within
core expertise of asset management
Overview and Outlook
Jeremy Pilkington
Chairman
Turnover (£m)
100
95
90
85
80
75
70
65
60
55
50
83.5
90.0
75.5
59.8
2001
66.8
2002
2003
2004
2005
Profit Before Tax (pre goodwill) (£m)
10
9
8
7
6
5
4
3
2
1
0
6.5
7.8
*
8.6
9.8
2004
2005
3.3
2001
2002
2003
*excluding prior year exceptional property profit
Return on Capital Employed (%)
%
18
16
14
12
10
8
6
4
2
0
12.4
14.8
15.7
16.5
2003
2004
2005
7.4
2001
2002
Restated UITF38
Dividend (pence per share)
6
5.5
5
4.5
5.75
4
3.5
5.0
4.05
4.2
2001
2002
4.5
3
2003
2004
2005
Earnings per share (pence)
16
14
12
10
8
6
10.23
4
2
*
15.04
12.36
13.19
2003
2004
2005
5.03
0
2001
2002
*excluding prior year exceptional property profit
Total Shareholder Return
Groundforce
•
Market leader position strengthened
•
Excellent acquisition identification and
integration track record
•
AMP4 – expect delays but very positive
UK Forks
•
Market leader - unique service offering
•
Converting larger users
•
Housebuilding remains firm; prospects good
•
Operational efficiency consistently driving up
ROCE
-
2002 : 10.5%
2005 : 14.4%
Airpac Oilfield Services
•
Market Leader
•
Excellent year – strategy bearing fruit
•
Oil industry activity strong
•
International growth opportunities
•
Small but vital role in oilfield supply chain
Hire Station
•
Very disappointing year, behind management
expectation
•
Improving trend established within tools
•
Reorganisation and refocus at Specialist Products
•
Recovery plan back on track but behind schedule
Torrent Trackside
•
Clear market leader
•
Another excellent year against background of
industry change
•
Challenge to replace NR maintenance plant
volumes
•
Renewals programme workload strong
•
Significant opportunities within LUL but will
take time
Group Outlook
•
Overall outlook for the Group very positive
-
UK infrastructure spend set to continue
-
Safety and regulatory regimes supporting
growth
•
Breadth of markets gives earnings resilience
•
Strength of balance sheet and cash flow gives
significant investment capacity
•
Growth opportunities, organic and acquisition,
identified in all markets
Group Outlook
•
Board committed to leveraging up
•
All levels of management strongly incentivised
to deliver earnings growth in their business
•
Strengthened senior management team