'Performing well'' as rivals stumble
​Vp is a specialist rental business providing equipment and services to a wide range of markets including civil engineering, rail, oil and gas exploration, construction, outdoor events and industry, primarily within the UK, but also overseas. What should investors do as volatility picks up? Rather than take exposure to economic and political uncertainties, we would prefer to stick with quality stocks that are generating high returns on investment and benefiting from long-term tailwinds. Such as Vp, which last year posted a 29.7% rise in adjusted EPS to 54.4p and a 16.2% RO(adj)CE. Indeed, despite some of its contemporaries recently releasing profit warnings, Vp said yesterday that it had made a "solid start" to FY16. Chairman Jeremy Pilkington adding the "Group's key markets are generally performing well, with construction and housebuilding remaining positive''. Naturally Bukom's oil/gas interests have been affected by the lower crude price, yet overall results are still ticking along nicely - thus illustrating once again the resilience of the Group's business model. We make no change to our 800p/share target price or financial forecasts, and the stock at 770p is still trading at a discount to the equipment rental sector on 12.4x adjusted EBITA and 13.4x PER.
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