VP plc restructures Brandon Hire business

Photo: Brandon Hire Station

UK-headquartered rental company VP plc has restructured its Brandon Hire Station business following the impact of mixed and challenging markets on the business.

The company said ongoing challenges in construction and housebuilding have particularly impacted Brandon Hire Station, as well as ESS and UK Forks divisions.

VP said it had implemented a new leadership team into the business, with the aim of refining the strategy following “disappointing performance and lower activity levels” than last year.

That saw it close a number of its branches in the UK throughout the year to optimise its branch network, while VP has also taken a £27.7 million non-cash impairment charge, including goodwill, against intangible assets.

Anna Bielby, chief executive of VP plc, said, “The high operational gearing of this division means that market challenges impact financial performance quickly and significantly.

“Fleet investment in this division reduced during the year to match activity levels. Under a new management team, a review of the business was undertaken midway through the year.

“The new team is focused on a number of initiatives around pricing, cost control and process. In addition, the division is refocusing the business to better serve target customers.”

The announcement was made in its annual report for the 2024 financial year, which revealed a significant hit to pre-tax profit, which went down to £2.8 million from the £30.7 million it posted in 2023.

Revenues remained flat at £368.7 million (down from £371.5 million in 2023). EBITDA was also down to £91 million from the 2023 figure of £92.9 million, while fleet investment for the year was up to £62.8 million, a 4% increase.

Jeremy Pilkington, chair of VP plc, said, “Whilst it is never pleasurable to report a reduction in profitability, we believe that under the circumstances, this represents a good result, demonstrating once again the ability of our diversified business exposure to deliver resilient profit in spite of localised challenges.

“Reflecting the challenges faced by the UK general construction market, we have taken a £27.7 million non-cash impairment charge against intangible assets, including goodwill, in the Brandon Hire Station business.”

Despite the conditions for Brandon Tool Hire, Bielby said the Group as a whole has delivered “sector-leading returns,” led by a strong performance in infrastructure.

She added that despite economic uncertainty, the company remains confident in its ability to react to changes in end markets and take advantage of economic improvements.

“We have made considerable progress in FY24 with new leadership and a refreshed strategy,” she said. “We are excited about the future and have confidence in our ability to both grow the business and drive value through simplifying the way we work.”