"Solid progress" in H1 drives PBTA upgrade
| Vp plc has today reported a robust H1 performance (for the 6 months to end September), with profit before tax and amortisation up 6% at £17.2 million, EPS up 7% at 35.14p and the Interim Dividend also increased 7% to 5.35p. Very impressively Return on Capital Employed climbed by 1.5% to 16.1% - significantly above Vp's cost of capital and marginally higher than the Board's "through-cycle" target of 15%. These results were slightly ahead of our expectations, and are in sharp contrast to news from others in the sector since the UK general election, including Speedy Hire, Lavendon and HSS, all of which have warned on subdued trading conditions (and depressed profits) in their primary UK markets over the 2015 summer. In terms of divisional performance, Vp's star performers were UK Forks, (profits up 25% at £2.9m), driven by good demand from the housebuilding sector; Hire Station (profits up 27% at £6.1m) , with all three elements of the business - Tools, ESS Safeforce and MEP, all contributing to this excellent result; and Torrent Trackside (Rail - profits up from £1.3m to £1.7m), where the acquisition from Balfour Beatty Rail in August 2014 has been successfully integrated and has made a useful contribution. For the full year we are nudging up our adjusted PBT (pre amortisation) forecast to £28.4m, which would result in EPS of 58.2p (up 7% year on year). Our target price stays at 800p, leaving decent upside against the overnight share price of 730p. |
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