Solid as a rock
Vp – a specialist equipment rental firm - indicated last Tuesday that it remained on track to meet FY’23 expectations, despite also having to manage the ‘Formal Sale Process (FSP) over the past 4 months. Demand was said to be “good” across the infrastructure and housebuilding sectors, in addition to “encouraging activity levels’ both in the UK and Internationally in spite of ongoing input cost inflation and supply chain” pressures.We think this is a creditable performance, and further evidence that Vp is a high-quality group enjoying strong defensible positions in its chosen secular growth markets.
The FSP began on 28th April 2022, and while it received a “good level of interest throughout, none of the proposals submitted met [the Board’s] objectives” – so the process was concluded.
Elsewhere our FY’23 profit forecasts remain unchanged - anticipating adjusted PBTA of £41.4m on revenues up 4.2% to £365m, with net debt (pre IFRS 16) closing Mar’23 at £130m (ie flat YoY), equivalent to a comfortable 1.4x EBITDA.
Likewise, we have prudently held the £11.30/share valuation, but plan to revisit these at the October trading update.
Vp is involved in rental business. Co. provides products and services to range of end markets including infrastructure, construction, housebuilding and oil and gas. Co. comprises a U.K. and an International Division. Co.'s U.K. division comprised of: Hire Station, which provides tools for industry, construction, and DIY; Torrent Trackside, which is engaged in railway plant; Groundforce, which is engaged in construction solutions; TPA, which is engaged in portable roadways; and U.K. Forks, which is engaged in material handeling. Co.'s International division compsrised of: Airpac Bukom, which is engaged in oildfield services; and TR Group, which is engaged in technical equipment rental.
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