VP plc reports softening markets

Vp plc said its Torrent Trackside business could benefit from the decision to stop the HS2 line at Birmingham. (Photo: VP plc)

UK-based equipment rental specialist VP plc has posted a 2.4% increase in revenue in its half-year results, despite reporting a softening in general construction activity and “subdued housebuilding activity.”

The company posted revenue of £190 million in the six months up to September 2023, up from £186 million.

Adjusted EBITDA remained unchanged at £42 million, while the company also confirmed that it has secured a Revolving Credit Facility of £90 million. 

VP said the increase in revenue was the result of a strong first half across all metrics, in particular in infrastructure with continued demand from rail, transmission and water sectors.

It added that although it notes subdued housebuilding activity, it remains “positive over the medium term and current activity is stable” despite being marginally below prior year levels.

It said its Brandon Hire Station and UK Forks businesses in particular have been impacted by the softening in general construction and housebuilding activity respectively and are below prior levels.

As such, the company has resized the UK Forks fleet to reflect market demand and remains optimistic that targeted revenue and cost initiatives will significantly improve profitability for Brandon Hire.

At the same time, it said that it doesn’t expect the recent announcment that the HS2 line will not go beyond Birmingham to significantly impact the business. 

Describing the decision as “not unexpected”, the company said it is hopeful activity from alternative rail initiatives that will replace HS2 will provide opportunities for its TPA UK and Groundforce businesses.

VP added that its Torrent Trackside business could benefit from the decision “if promised investment elsewhere in the network is delivered.”

Meanwhile, the company is continuing its investment in a sustainable fleet, with around two thirds of £27 million capex going towards either zero emissions at point of use or the transition towards lower emission technologies.

Jeremy Pilkington, chairman of Vp plc, said the results reflect the strength of its offering; “Having multiple sector exposure diversifies our revenue streams and has contributed to the robust performance in the period, with infrastructure demand remaining supportive, and whilst there are immediate challenges within general construction, I am confident that the actions taken will be of benefit in the medium term.

“The Group continues to produce strong operating cash flows and maintains a solid financial base, having refinanced our RCF in November on similar terms for a further three years, and we are well positioned for growth.”