Transcript Slide 1

Vp plc
Presentation
Final Results
toforCarillion
the year ended
9th June
2010 2010
31 March
The Equipment Rental Specialists
The Equipment Rental Specialists
Summary
Profit before tax, amortisation and
exceptional items
Revenue
£16.0m
£134.2m
Earnings per share pre amortisation
27.57p
Dividend per share
10.8p
Operational review
Highly satisfactory outcome
 Difficult trading conditions in most markets
 Explicitly profitable
 Early cost actions to mitigate fall in demand
 Strong operational cash flows
 Working capital benefit of £5.2m
 Fleet sales generated £8.5m, at a profit
 Cash conserved, borrowings reduced by £17.5m
 Net assets increased by £7m
 Quality, breadth and resilience demonstrated
Revenue and Operating Profit trends
Operating Profit (£m)
Revenue (£m)
180
160
25.4
149.3
134.2
140
23.3
25
121.6
120
100
30
157.5
90.0
18.6
20
99.4
16.3
15
80
10.2
11.5
10
60
40
5
20
0
0
2005
2006
2007
2008
2009
2010
2005
2006
2007
2008
2009
2010
Group structure
The Equipment Rental Specialists
Divisional overview
 Divisions impacted by recession to varying degrees
 All divisions profitable
 All divisions cash generative
 Cost actions across all businesses
 Investment in sales and marketing
 Improved co-ordination between divisional sales teams
 Harbray acquisition post year end
Business performance
Revenues
PBITA
2010
2009
2010
2009
£m
£m
£m
£m
Groundforce
32.9
40.6
-19%
9.2
11.0
-16%
Hire Station
50.1
55.7
-10%
3.2
6.4
-50%
Airpac Bukom
15.7
14.7
+7%
3.9
3.9
0%
UK Forks
10.6
16.9
-37%
0.0
1.2
-100%
TPA
14.2
15.6
-9%
2.2
1.7
+29%
Torrent Trackside
10.6
14.0
-24%
0.2
1.2
-83%
TOTAL
134.2
157.5
-15%
18.6
25.4
-27%
13.9%
16.1%
Operating Margin
Capital expenditure
2010
2009
£m
£m
Groundforce
3.6
7.3
Hire Station
4.8
9.5
Airpac Bukom
4.7
6.6
UK Forks
0.1
1.4
TPA
0.6
4.5
Torrent Trackside
0.9
1.2
Group
0.4
0.5
Total
15.1
31.0
Disposal Proceeds
8.7
10.8
Net expenditure
6.4
20.2
Rebranding
Divisions rebranded to better reflect association with Vp whilst explicitly
maintaining the specialist focus that customers value
Strength through diversity
Construction
Mix
33%
Historic
Difficult
Future
Stable/difficult
Civil Engineering
23%
Stable
Weakening
Oil & Gas
13%
Improving
Improving
Rail
9%
Very weak
Weak/improving
Housebuilding
6%
Minor improvement
Gradual recovery
Transmission
4%
Good
Good
Events
3%
Good
Good
Other
TOTAL
9%
100%
Stable
Stable
Overseas Revenue
as % of Total
Overseas growth
20
18
16
14
12
10
8
6
4
2
0
15%
10%
8%
5%
1%
Mar 06
Mar 07
Mar 08
Year
 Overseas activities growing as proportion of Group revenues
 Airpac Bukom, plus TPA, Groundforce and Hire Station
Mar 09
Mar 10
Oil and Gas – global support network
North Sea
Middle East
Americas
Singapore
Africa
Australia
Overseas hubs
established 2002- 2008
Operational outlook

Anticipate overall stability with areas of volatility

Breadth of markets will remain a key asset

Maintain strong balance sheet but ….. suitable opportunities
will be pursued

In excellent financial shape to sustain the development
of the Group over the longer term
Financial review
Financial highlights
2010
2009
Revenue
£134.2m
£157.5m
-15%
PBITA
£18.6m
£25.4m
-27%
Profit before tax and amortisation
£16.0m
£21.7m
-26%
Net margin
11.9%
13.8%
ROCE
13.3%
17.0%
NB: Prior year restated for IAS16
Components of pre-tax profit
(14.4)
1.1
(0.3)
7.9
16.0
21.7
2009
PBTA
Volume/
Margin
Cost
Saving
Measures
Profit on
Disposal
Financing
Cost
2010
PBTA
Cost saving measures (fixed costs)
Annualised
Current Year
Savings
Benefit
£m
£m
Actions taken in Q4/FY09
4.6
3.7%
3.8
Actions taken in FY10
5.5
4.4%
4.1
10.1
8.1%
7.9
31 Mar 10
Employees
1,358
31 Mar 09
-8%
1,474
Earnings and dividend per share
2010
2009
Basic EPS
27.57p
37.99p
-27%
Diluted EPS
27.21p
36.83p
-26%
10.8p
10.8p
2.6x
3.5x
28.6%
27.4%
Dividend per share
Dividend cover
Tax rate
+4%
NB: EPS based on pre amortisation of intangibles and exceptional items
Robust balance sheet
2010
2009
£m
£m
Property, plant and equipment
98.6
107.9
Intangible assets
39.8
41.2
Non current assets
138.4
149.1
Net working capital
5.4
5.6
Pension obligations
(1.1)
(3.2)
Deferred tax
(10.2)
(8.4)
-
(0.1)
Capital employed
132.5
143.0
Net debt
(48.3)
(65.8)
84.2
77.2
69
75
Deferred consideration
Net assets
Debtor Days
Operating cash flow
Operating profits
Depreciation
EBITDA
Changes in working capital
Share option awards
Profit on asset disposals
Gross capex
Proceeds from disposals
Exceptional items
Operating cash flow
2010
£m
18.6
18.9
37.5
5.2
0.4
(3.4)
(16.7)
8.7
(0.3)
31.4
2009
£m
25.4
19.0
44.4
(5.6)
0.4
(3.8)
(34.2)
10.8
12.0
Total cash flow
2010
2009
£m
£m
Operating cash flow
31.4
12.0
Interest
(2.6)
(3.9)
Tax
(4.5)
(6.0)
Free cash flow
24.3
2.1
Pensions
(2.2)
(0.2)
-
(6.6)
Dividends
(4.5)
(4.5)
Purchase of own shares
(0.1)
(3.2)
Change in net debt
17.5
(12.4)
Acquisitions
Modest gearing, comfortably within covenants
Net debt
Underlying gearing
-17%
-12%
-23%
70
60
50
70%
65.8
69%
60%
64.7
54.8
40
48.3
50%
66%
53%
40%
30
44%
30%
20
20%
10
10%
0
0%
Sep '08
Mar '09
Sep '09
Mar '10
Interest cover (12 months)
Sep '08
Mar '09
Sep '09
-7%
7.1
7.14
7
1.46
1.48
1.37
6.9
6.7
-6%
1.5
1.4
6.9
6.94
Mar '10
Net debt / EBITDA (12 months)
7.2
6.8
-17%
80%
1.3
6.77
6.6
1.29
1.2
6.5
Sep '08
Mar '09
Sep '09
Mar '10
H1 09
FY 09
H1 10
FY 10
Bank facilities being refreshed
June
31 March
31 March
2010
2010
2009
£m
£m
£m
Due to expire Nov '10
-
50
50
Due to expire Sept '11
20
20
20
Due to expire June '13
35
-
-
55
70
70
Overdraft facilities
10
10
10
Total facilities
65
80
80
Step-up option
15
-
-
Committed facilities
Conclusion
Long term shareholder value enhancement
Highly satisfactory results in a challenging market
environment
 Prudent financial management
 Double digit margins, double digit ROCE
 No asset write downs
 No bank restructuring
 No equity funding required
 Balance sheet strengthened organically
 Maintained dividend
 £17.5m cash – all units cash positive
Quality returns
Operating Margin (%)
20
15.6
15
11.5
Return on Average Capital Employed (%)
24
16.1
13.9
13.4
20
16
10
12
5
8
19.1
15.4
16.5
2006
2007
17.0
13.3
4
0
0
2006
2007
2008
2009
2010
Earnings per share (pence)
36.6
40
30
20
2009
2010
Dividend per share (pence)
38.0
12.0
27.6
24.0
2008
10.0
8.0
18.3
10.5
10.8
10.8
2008
2009
2010
8.25
6.6
6.0
4.0
10
2.0
0
0.0
2006
2007
2008
2009
2010
2006
2007
Outlook

UK more stable but public sector funding challenges ahead

Overseas contribution growing – adds further market
diversification

Quality opportunities scarce but will continue to be pursued

Product and market mix provides downside resilience and upside
opportunity
Vp plc
Presentation
Final Results
toforCarillion
the year ended
9th June
2010 2010
31 March
The Equipment Rental Specialists
The Equipment Rental Specialists
Supplementary schedules
Net working capital
Inventories
Trade debtors
Prepayments and other debtors
Current assets
Trade creditors
Accruals, other creditors and tax
Net working capital
Debtor Days
2010
£m
3.8
24.1
3.2
31.1
(11.4)
(14.3)
5.4
2009
£m
5.5
29.5
3.3
38.3
(12.6)
(20.1)
5.6
69
75
Shareholder value
£m
Per
Share
31/3/09
77.2
167p
31/3/10
84.2
182p
Increase in balance sheet equity
7.0
Dividends paid
4.5
Value delivered
11.5
Balance sheet equity
15%
9%
Effective rate of tax
March
2010
%
March
2009
%
Standard rate
28.0
28.0
Permanent disallowables
0.5
0.6
(1.8)
(1.8)
Share schemes - current tax
-
(0.1)
Share schemes - deferred tax
-
2.1
Prior year adjustments
0.9
(2.0)
Other
1.0
0.6
Effective rate
28.6
27.4
Chattels
Shareholder return
250.0
200.0
150.0
100.0
50.0
0.0
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
Vp Plc
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10