Transcript Slide 1

Vp plc
Presentation
Final Results
toforCarillion
the year ended
9th June
2010 2012
31 March
The Equipment Rental Specialists
The Equipment Rental Specialists
Agenda
● Results Summary
● Operational Review
● Financial Review
● Conclusion
1
Results summary
2
2012
2011
Profit before tax and amortisation
£16.0m
£13.8m
+16%
Revenue
£163.6m
£141.0m
+16%
30.8p
26.1p
+18%
11.35p
10.8p
+5%
13%
12%
Earnings per share pre amortisation
Total dividend per share
Return on Capital Employed
Highlights
●
Impressive trading performance - ahead of market
expectations
●
No improvement in overall market conditions
●
Organic revenue growth, double digit margins maintained
●
Strong cash generation
●
Borrowings unchanged
●
Increased fleet investment to £32.1m (+33%) - ROCE
improved
●
Successful share tender offer in March 2012
●
Service and market specialisation continues to deliver
results
3
Revenue and operating profit trends
Revenue
(£m)
Operating profit
(£m)
Record revenues
Positive profit trend
4
Operational review
5
Effective market re-alignment
6
Events
£4.4m
£14.3m
Proportion of total Group revenue 2012
43%
24%
13%
8%
3%
9%
Proportion of total Group revenue 2011
37%
31%
13%
7%
3%
9%
Segmental % of Total Group Revenues
Other
Housebuilding
£13.1m
Oil and Gas
£21.3m
Total revenue in FY12 - £163.6m
Construction
£39.2m
Infrastructure
£71.3m
Market Segments
Group structure
7
Divisional overview
● All divisions profitable and growing
● Positives:
●
●
–
reputation for quality of service and equipment is delivering
success across the divisions
–
appetite and opportunity for fleet investment is growing
–
divisional initiatives for continuing service improvement
–
rail, housebuild, oil and gas and utility markets supportive
Challenges:
–
macro economic position tests market confidence,
–
general construction sector remains subdued
–
price inflation in transport, capital equipment and spares
Potential for further progress
8
Business performance
9
Revenues
PBITA
2012
2011
2012
2011
£m
£m
£m
£m
UK Forks
13.2
10.8
1.5
1.1
Maintained progress
Groundforce
33.7
30.3
6.7
6.7
Specialist sub-sectors
Airpac Bukom
19.5
17.5
3.6
2.7
LNG demand
Hire Station
60.3
53.5
3.3
3.0
Safety services
TPA
14.7
14.0
1.2
1.4
Operational challenge
Torrent Trackside
22.1
14.9
2.2
1.6
Widespread demand
163.6
141.0
18.5
16.5
+12%
11.3%
11.7%
TOTAL
Operating Margin
+16%
Capital investment in fleet
10
2012
2011
£m
£m
UK Forks
8.6
4.4
High utilisation
Groundforce
5.6
3.8
Specialist investment
Airpac Bukom
2.0
1.3
New products
Hire Station
8.1
10.3
Tool hire fleet re-alignment
TPA
5.1
1.5
Pitch cover, overseas fleet
Torrent Trackside
2.9
2.9
Maintained demand
Total fleet capex
32.1
24.2
Disposal Proceeds
(7.4)
(7.2)
Net expenditure
24.7
17.0
Operational outlook
●
New financial year has started well
●
We will maintain our focus to improve the quality of earnings in
our existing businesses
●
Uncertainty in domestic and European markets remains a factor
but.......
●
Our established strength in specialist sectors across a breadth
of markets will provide opportunity and.....
●
Our excellent, long established, track record demonstrates we
have the ideas, the ambition and the ability to deliver further
business improvement
11
Financial review
12
Financial highlights – excellent performance
13
2012
2011
Revenue
£163.6m
£141.0m
+16%
EBITDA
£38.7m
£35.0m
+11%
EBITA
£18.5m
£16.5m
+12%
Profit before tax and amortisation
£16.0m
£13.8m
+16%
Net margin
9.8%
9.8%
ROACE
13.0%
12.3%
Earnings per share
14
2012
2011
Basic EPS
29.63p
23.42p
+27%
Basic EPS (pre amortisation & exceptionals)
30.76p
26.09p
+18%
Net profit for year
£12.2m
£9.8m
+25%
Amortisation/exceptionals after tax
£0.5m
£1.1m
Weighted average number shares
41.3m
41.8m
Tax rate
20.2%
20.0%
Dividend per share
15
2012
2011
Basic EPS
29.63p
23.42p
Dividend per share
11.35p
10.80p
2.6x
2.2x
Dividend cover
Pence per share
Dividend per share (pence)
●
Maintained strong performance in second half 
●
Confident in ability to deliver in future

●
Macro economic challenges stable
?
Tender offer
●
Share buy back of 3.1m shares at 254 pence per share
●
£7.8m returned to shareholders
●
Earnings per share enhancing
●
Tender offer oversubscribed
●
Successfully completed on 4 April 2012 at nominal expense
●
Balance sheet liability of £7.8m at 31 March 2012
16
Robust ROACE - improved
ROACE
Average Capital Employed £m
17
Average Capital
Employed £m
ROACE
Significant investment for organic growth
18
£m
100
99.7
96.4
90.9
88.2
80
60
Able to invest into customer demand
• Fleet asset lives 3 to 10 years
•
40
32.1
28.4
24.2
20
16.9
13.9
16.9
6.9
18.2
16.6
5.2
5.1
4.9
0
2009
2010
Fleet NBV
Fleet Depreciation
2011
2012
Fleet Capex
NBV Fleet Disposals
Strong balance sheet
19
2012
2011
£m
£m
Property, plant and equipment
110.7
101.3
Intangible assets
39.0
39.6
Non current assets
149.7
140.9
Net working capital
(9.4)
0.6
Pension/deferred tax
(8.8)
(9.5)
Capital employed
131.5
132.0
Net debt
(40.4)
(40.5)
Net assets
91.1
91.5
Gearing
44%
44%
63
65
0.9%
0.9%
Debtor days
Bad debt write off as % turnover
90% fleet
Includes tender
offer
Low level gearing
Further improvement
Cash flow – significant capex net debt maintained
2012
2011
£m
£m
Operating profits
18.5
16.5
Depreciation
20.2
18.5
EBITDA
38.7
35.0
Changes in working capital
1.3
1.4
(34.6)
(21.9)
Proceeds from disposals
7.4
7.2
Profit on asset disposals
(2.2)
(2.3)
Interest
(2.5)
(2.7)
Tax
(3.5)
(3.1)
Dividends
(4.5)
(4.5)
Other (acquisitions and exceptionals)
-
(1.3)
Cash movement (change in net debt)
0.1
7.8
Gross capex
21
20
Growth in EBITDA
Capex growth
Net debt maintained
21
Bank facilities and headroom
21
31 March
31 March
2012
2011
£m
£m
3 year facility to Sep '11
-
20
3 year facility to Jun '13
35
35
4 year facility to Aug '15
30
-
65
55
5
10
70
65
Net debt
40.4
40.5
Headroom against facilities
29.6
24.5
Revolving credit
Overdraft facility
Total facilities
24
Comfortably within covenants
22
Greater than 3 times
Less than 2.5 times
•
•
Net debt reduced by £25m since 2009
Considerable headroom
Conclusion
23
Conclusion
24
Financial
Strengths
●
●
●
●
●
Strong balance sheet - financial gearing 18% - risk mitigation and capacity to fund opportunities
Strong cash flow
£56m investment in rental fleet in last two years - reduction in debt
Strong working capital management
Further progress on debtors - 63 days
Business
Strengths
●
●
●
●
●
Diverse, specialist, high value added services
Broad spread of end markets
Market leading positions
Continuous innovation of products and services
Growing importance of international exposure
Management
Strengths
●
●
●
●
●
Consistent, long term focus on shareholder value creation
Stable management team
Change positive culture
Integrity
Track record of successful acquisitions - opportunities may arise in the future
Performance
Strengths
●
●
●
●
●
Highest ever revenues - £164m
Highest ever NBV rental assets - £100m
Double digit operating margins - 11%
ROCE growth - 13%
Profit growth - 16% to £16m
Supplementary schedules
24
25
Effective rate of tax
26
Mar 2012
Mar 2011
%
%
Standard rate
26.0
28.0
Impact of tax rate change
(5.0)
(6.4)
Permanent disallowables
0.4
0.8
(1.8)
(1.8)
Share option schemes
-
(1.4)
Prior year adjustments
(0.3)
(0.8)
Non qualifying depreciation
0.8
1.6
Other
0.1
-
Effective rate
20.2
20.0
Chattels
Net working capital
27
2012
2011
£m
£m
Inventories
4.8
5.4
Trade debtors
30.0
28.7
Prepayments and other debtors
5.0
4.6
Current assets
39.8
38.7
Trade creditors
(18.2)
(18.8)
Accruals, other creditors and tax
(31.0)*
(19.3)
(9.4)
0.6
Net working capital
*includes £7.8m tender offer credit
Group history – 1954 to date
28
2002-2004
Shoring expansion
through acquisition
of Mechplant,
Trenchshore &
Eve Shorco
1954
Vibratory Roller & Plant Hire
(Northern) Limited founded
2011
Mainland Europe Groundforce
2006
Acquisition of Bukom
Oilfield Services
(Airpac Bukom formed)
2001
Hire Station formed
through merger of
5 regional tool
businesses
1980
Shoring division
established
2012
1996
Tool Hire:
Cannon Tool Hire
acquired in 1996
1973
Floated on main market
Vibroplant plc
2006
2005
TPA and ESS
acquired
1982
US powered access
business established
2010
Geographical expansion:
Global (Airpac Bukom).
Eire (Groundforce),
Germany (TPA)
2001
Renamed Vp plc
1954
1973
1980
1975
First move into
specialist
1990
1980Groundforce
acquired from
SGB
2007 - 2009
Continuing growth in
specialist areas via
acquisitions of MEP and
U Mole
2000
UK Forks
division
created
1990
1997
Rail: Torrent
Trackside
acquired
1996
Exit from USA;
UK specialist businesses
expanded
Turnover
1970: £2m
1980: £14m
1990: £70m
2000: £55m
2010: £134m
2012: £164m
Group Thumbnail
●
Rental specialist serving diverse, niche end
markets
●
6 operating divisions
●
Established for over 50 years
●
Mainly UK based with growing European
exposure (Groundforce/TPA)
and global
1980
presence (Airpac Bukom Oilfield Services)
●
1500+ employees; £100m asset base; £160m+
revenues
29
TPA
30
Europe’s market leader in portable roadways:
•
Operations in UK, Republic of Ireland
and Germany
•
Skilled installation of bespoke roadway and
fencing solutions
Markets:
•
Transmission, outdoor events, rail,
construction - UK and Europe
Opportunities:
•
1980
Regulated transmission programme, new
products and European growth
UK Forks
31
National hire of telescopic handlers/rough
terrain forklifts:
• Only UK national telehandler specialist
• Fleet of c.1200 machines
• Strategically located distribution network
Markets:
• General construction, housebuild and industry
1980
Opportunities:
• Housebuilding improvement, market share growth
Hire station
Tool hire and specialist equipment for
construction and industry:
• Local tool hire branches supported by national call
centre
• Plus, specialist products and services
° ESS Safeforce – safety equipment and
confined space training
° MEP – press fitting and electrofusion
equipment
° Climate Hire – heating and cooling products
° Virtual Hire – ‘white label’ partnerships, e.g.
Homebase, Garden
Centre Group
1980
Markets:
• Construction, industry, civil engineering,
housebuild, DIY
Opportunities:
• Specialist products, market share growth
32
Groundforce
33
UK market leaders in the rental and sale of
Shoring Products and Solutions:
•
•
Groundforce has the largest excavation support fleet
in the UK and Ireland
Plus, specialist products and services
°
Piletec – piling equipment
°
Stopper Specialists – pipeline pressure testing
°
Shorflo – pumps
°
‘U’ Mole – trenchless technology
1980
Markets:
• Civil engineering (including regulated AMP
programme), construction and housebuilding
Opportunities:
• AMP 5, European growth
Torrent Trackside
Provision of rail specific light plant, trackside
lighting and skilled trackside personnel:
•
Genuine 24/7 x 365 national support
•
The widest range of specialist portable rail
equipment in the UK
•
Significant safety and compliance barriers to
entry in a regulated market
Markets:
• Maintenance and
1980renewals projects on
national rail network, London Underground
and Network Rail maintenance contract
Opportunities:
• LUL, Crossrail, increased renewal activity
34
Airpac Bukom
International rental of high pressure air
compressors, steam generators and specialist
equipment supported by skilled engineers:
•
Global network of six service and distribution
facilities located in the UK (Aberdeen and Great
Yarmouth), Singapore, Australia, Middle East
and Latin America
•
Rental assignments in more than 60 countries
Markets:
• Well testing, rig1980
maintenance, gas transfer,
LNG
Opportunities:
• Recovery in well test market, new
applications and greater penetration of
under represented geographic regions
35