Download 31 Mar 2008

Vp plc - The Equipment Rental Specialist
Preliminary Results 2008
Jeremy Pilkington - Chairman
Neil Stothard – Group Managing Director
Mike Holt – Group Finance Director
Performance summary
Revenue
£149.3m
+23%
Profit before tax
and amortisation
£20.2m
+39%
Earnings per share
36.1p
+48%
Dividend per share
10.5p
+27%
Operational Review
Operational highlights
•
•
•
•
•
•
•
•
Operating profits 41% up at a margin of 15.6%
Excellent organic profit growth (82%)
Strong capital investment - £43m on rental fleet
8 acquisitions - £11m
Strong remediation demand in summer
AMP4 buoyant
Weak rail market
International expansion
Strength through diversity
Mix
Experience in 07/08
Current Status/View
Construction
39%
Stable
Stable
Civil Engineering
14%
Strong
Stable
Rail
11%
Weak
Improving
Housebuilding
10%
Strong
Weakening
Oil & Gas
9%
Strong
Strong
Facilities Management
5%
Strong
Strong
Events
4%
Strong
Strong
Transmission
3%
Weak
Improving
Other
5%
Stable
Stable
TOTAL
100%
Business performance
Revenues
PBITA
2008
2007
2008
2007
£m
£m
£m
£m
Groundforce
35.0
28.1
+25%
8.7
6.4
+36%
Hire Station
57.1
44.9
+27%
5.9
3.1
+90%
Airpac Bukom
13.1
10.0
+31%
3.3
2.4
+38%
UK Forks
16.1
13.9
+16%
3.2
1.4
+128%
TPA
14.0
11.4
+23%
1.2
1.0
+20%
Torrent Trackside
14.0
13.1
+7%
0.9
2.0
-55%
-
-
-
0.2
149.3
121.6
23.2
16.5
15.6%
13.6%
Group
TOTAL
Operating Margin
+23%
+41%
Investing for future growth
• Groundforce
–
–
–
Acquisition of ‘U’ Mole trenchless systems business
Expansion into Ireland including acquisition of USS and PTA
Acquisition of Redding Hire
• Hire Station
–
–
–
–
9 new locations for tools including acquisition of ET Hire and DJ Tool Hire
Development of ‘virtual hire’ concept
Growth of Climate Hire business and Arcotherm acquisition
Acquisition of NSS and Able safety businesses
• Airpac Bukom
–
International hub expansion and capital investment programme
Investing for future growth
• UK Forks
–
Fleet expansion (+13%) to meet growing demand in general construction and
reducing reliance on housebuilding sector
• TPA
–
–
Development of MD40 lightweight roll out roadway
Further penetration /investment in Germany
• Torrent
–
Acquisition of First Engineering rail plant fleet with 3 year supply agreement
Investing for future growth
2008
2007
£m
£m
Groundforce
8.3
5.9
Hire Station
13.0
8.9
Airpac Bukom
9.9
2.5
UK Forks
7.9
3.4
TPA
3.8
4.9
Torrent Trackside
1.9
3.3
Group
0.5
0.5
TOTAL
45.3
29.4
Disposal proceeds
10.3
9.0
Capital Expenditure
Growth strategy progressing well
• Continued organic growth
– Significant net capital investment (2 x depreciation)
– Increasing ‘share of wallet’
• Complementary/bolt on acquisitions
– New products (U-Mole)
– New markets (Cool Customers, Arcotherm, NSS, PTA, USS)
– Consolidations (ET Hire, DJ, Redding, Able, FEL)
• International expansion
– Oil and gas hubs (Sharjah, Curaçao and Perth)
– Ireland (Groundforce and Hire Station)
– Germany (TPA)
Financial Review
Financial highlights
2008
2007
Revenue
£149.3m £121.6m +23%
EBITA
£23.3m
£16.5m +41%
Operating margins
15.6%
13.6% +15%
PBT (pre amortisation)
£20.2m
£14.5m +39%
Net margin
13.5%
11.9% +13%
ROCE (pre amortisation)
19.1%
16.5%
7.5x
8.1x
Interest Cover
Earnings and dividend per share
2008
2007
Pre-intangibles amortisation
36.64p
24.56p
+49%
Basic
36.09p
24.40p
+48%
Fully diluted
34.26p
23.24p
+47%
10.50p
8.25p
+27%
3.5x
3.0x
22.5%
27.6%
Earnings per share
Dividend
Dividend per share
Dividend cover
Tax rate
Components of profit growth (39%)
3.0
(1.1)
-8%
(0.3)
-2%
+21%
3.0
20.2
1.0
+21%
+7%
14.5
2007
PBTA
Acq'ns
Organic
Growth
Margin
Improvement
Finance
Costs
Prior Year
Property
Profit
2008
PBTA
Robust balance sheet
2008
2007
£m
£m
Intangible assets
41.2
36.3
Property, plant and equipment
100.9
76.8
Non current assets
142.1
113.1
Net working capital
(1.1)
4.1
Pension obligations
(1.4)
(2.0)
Deferred tax
(7.8)
(6.4)
Deferred consideration
(4.6)
(6.6)
Capital employed
127.2
102.2
Net debt
(53.4)
(36.6)
73.8
65.6
Net assets
Strong cash flow and re-investment
2008
2007
£m
£m
Operating cash flow
43.1
30.3
Interest
(3.1)
(2.0)
Tax
(3.6)
(2.9)
Underlying free cash flow
36.4
25.4
+43%
(45.5)
(26.8)
+70%
Asset disposals
10.3
9.0
+14%
Free cash flow
1.2
7.6
Pensions
(1.0)
(0.4)
Acquisitions
(10.0)
(4.6)
Dividends
(3.8)
(2.9)
Purchase of own shares
(3.5)
(3.7)
0.2
-
(16.8)
(4.0)
Gross capex
Exchange Rate Differences
Change in net debt
+42%
Increased net debt but modest gearing
2008
2007
Net debt
£53.4m
£36.6m
Bank facilities
£85.0m
£55.0m
Interest cost
£3.1m
£2.0m
Interest cover
7.5x
8.1x
Net debt/EBITDA
1.3x
1.2x
Headline gearing
72%
56%
Underlying gearing
51%
41%
Quality returns
Operating Margin (%)
Earnings per share (pence)
CAGR = 26%
Return on Average Capital Employed (%)
Dividend per share (pence)
CAGR = 20%
Financial summary
• Pre tax profit growth
+39%
• Operating margins
15.6%
• Operating cash flows
+42%
Summary
Resilient business model
•
•
•
•
•
•
•
•
Strong and growing market positions
Diverse offering provides resilience to individual market fluctuations
Adding value through products, services and operating efficiency
Prior year initiatives and acquisitions provide continuing momentum
Balance sheet strong - capacity as required
Acquisitions will continue where value is identified
Continued profitable growth despite challenges
Current year has started well
Excellent business momentum and consistency
Operating Profit (£m)
Revenue (£m)
CAGR = 15.6%
CAGR = 26.8%
Shareholder return
Vp Total Shareholder Return
Vp plc - The Equipment Rental Specialist
Preliminary Results 2008