Final Results
Vp PLC
08 June 2006
Vp plc
Central House, Beckwith Knowle, Otley Road,
Harrogate, North Yorkshire, HG3 1UD.
Tel : 01423 533400 Fax : 01423 565657
www.vpplc.com
Press Release 8 June 2006
Vp plc
('Vp' or 'the Group')
Preliminary Results
Vp plc, the equipment rental specialist, today announces its preliminary results
for the year ended 31 March 2006.
Highlights
• Revenue up 10% to £99.4 million (2005: £90.0 million)
• Operating profit up 17% to £12.0 million (2005: £10.2 million)*
• Profit before tax up 13% to £11.2 million (2005: £9.9 million)*
• Earnings per share improved 7% to 17.5 pence (2005: 16.3 pence)
• Total dividend increased by 15% to 6.60 pence (2005: 5.75 pence) based
on recommended final dividend of 4.65 pence per share
• Return on average capital employed was 15.4% (2005: 16.3%)
• Net debt increased to £32.6 million due to acquisitions and increased
capital investment (31 March 2005: £2.4 million), representing gearing
of 54%
• Interest cover 14.5 times (2005: 33.1 times)
*Before one-off costs of £0.5 million associated with the acquisition of Pivotal
Services
Jeremy Pilkington, Chairman commented:
'This time last year the Board signalled its intention to utilise the financial
strength of the Group more positively. We are pleased that in the period we
have been able to deliver both organic growth and acquisition derived
opportunities in support of our longer term growth aspirations.
The main challenge for us as we enter the new financial year is to deliver the
promise offered by the businesses we acquired in 2005/2006, whilst of course not
neglecting the continuing profit contribution from our existing businesses.
The economic and competitive environment, as always, presents a number of
challenges but we are cautiously optimistic of our ability to deliver further
progress in the year ahead.'
For further information please contact:
Vp plc
Neil Stothard, Group Managing Director Tel: +44 (0) 1423 533 445
neil.stothard@vpplc.com www.vpplc.com
Mike Holt, Group Finance Director
mike.holt@vpplc.com
Abchurch
Sarah Hollins / Justin Heath / Louise Thornhill Tel: +44 (0) 20 7398 7700
sarah.hollins@abchurch-group.com www.abchurch-group.com
CHAIRMAN'S STATEMENT
Results
I am pleased to report another year of very satisfactory progress for the Group.
Profits before tax rose 13% to £11.2 million (before the £0.5 million
restructuring charge associated with the Pivotal acquisition). Prior year
profits restated under adopted IFRS were £9.9 million. Revenue rose 10% to
£99.4 million.
Earnings per share increased 7% to 17.49 pence (2005: 16.31 pence restated under
adopted IRFSs).
The Board is recommending a final dividend of 4.65 pence per share making a
total for the year of 6.60 pence (2005: 5.75 pence), an increase of 15%. The
dividend is payable on 2 October 2006 to shareholders registered as at 8
September 2006.
Highlights of the year include the profit turnaround at Hire Station, the
excellent profit growth at UK Forks and the very significant level of
acquisition activity with £36 million spent on acquisitions during the period.
We discuss these in more detail below and in the business review. In addition,
£16.9 million was invested in organic fleet expansion and renewal. Net debt at
31 March 2006 stood at £32.6 million (2005: £2.4 million), representing gearing
of 54%. Strong interest cover of 14.5 times (2005: 33.1 times) supports our
ability to pursue future growth opportunities.
UK Forks
UK Forks had an excellent year with profits rising 44% to £2.1 million on
revenues ahead 11% at £14.3 million.
Further good progress was made during the year within the housebuilding market,
although we did experience some softening in activity towards the end of the
period. Demand from general construction and other sectors remained firm.
Given the capital intensive nature of this business, we were very pleased to see
further improvement in the UK Forks return on capital employed to 16% in the
period.
Groundforce
As we had expected, infrastructure investment by the water utilities sector
slowed during the year as they transitioned to their new AMP4 five year asset
management programme. Demand in other areas remained firm but was not
sufficient to fully compensate for the reduction in water related work.
Revenues fell by 4% to £23.5 million and profits reduced 9% to £5.3 million.
We are now starting to see contracts released under the AMP4 programme and as
this process gathers pace it will help to under-pin business progress later this
year and further into the future.
At the end of November we acquired, for £3.5 million, the business and assets of
Dudley Vale, a leading provider of piling equipment to the construction, civil
engineering and utilities markets. Dudley Vale's activities have been
integrated into Piletec, Groundforce's existing piling equipment rental and
sales activity. The business now trades as Piletec Dudley Vale. The
combination of these businesses gives us market leadership in this sector and
puts us in a strong position to take full advantage of recovering workloads.
Airpac Bukom Oilfield Services
After a doubling of profits last year, Airpac made further progress in growing
profits by 10% to £1.2 million on revenues ahead 12% at £5.0 million. In March,
Airpac acquired one of its leading competitors, Bukom Oilfield Services, for
£5.7 million plus assumed debt of £3.0 million. The combined business now
trades as Airpac Bukom Oilfield Services and has doubled our market share in
this specialised sector.
Bukom offers a similar range of services to Airpac but with a broader geographic
exposure, particularly in the expanding markets of Africa, Australia and South
America and some enhanced product capabilities.
The oilfield services sector is currently enjoying robust health on the back of
strong oil prices. The scale of the combined business should enable us to
better take advantage of the attractive growth opportunities in this market. We
expect to make further significant capital investment in this business.
Hire Station
Hire Station has made a very pleasing recovery to profitability in the year.
Profits of £1.9 million, before one off restructuring costs of £0.5m associated
with the Pivotal acquisition, compared with a prior year loss of £0.7 million.
Revenue improved 21% to £41.9 million.
The core tools business contributed a very solid profit performance and progress
was also achieved within the Lifting Point activity.
In July, Hire Station acquired the ESS Safety Services and Pivotal Training
business from Babcock International Group plc. ESS offers a very similar range
of rental, service and sales products to our own Safeforce activity. The
businesses have been merged and, trading as ESS Safeforce, have a strong market
position in a specialist field where regulatory pressure is a significant driver
to growth. Following this acquisition, Lifting Point has been repositioned
within the general tools rental business where it will benefit from cost
synergies and greater market exposure, as we expand the number of locations
offering lifting equipment.
Pivotal Performance provides a range of management development, health and
safety and construction and operative skills training. Restructuring costs of
£0.5 million were incurred in respect of rationalising and repositioning the
Pivotal training business which now benefits from a more appropriate operating
cost base.
The management of Hire Station is to be congratulated for their significant
achievement in delivering this first stage in Hire Station's recovery.
Torrent Trackside
As we anticipated at the beginning of this financial year, a changing rail
market and in particular the loss of the Network Rail plant maintenance contract
did have a significant negative impact on revenues and profitability at Torrent.
Revenues fell to £12.1 million (2005: £13.3 million) and profits reduced to
£1.7 million (2005: £2.5 million).
Torrent has responded to the loss of this important contract through cost
reduction and restructuring measures and has achieved useful success in
replacing these lost volumes with new customer wins.
Supply chain relationships now appear to have stabilised, at least for the
immediate term, and with a very significant repair and upgrade workload
programme ahead, Torrent is cautiously optimistic regarding the current year.
TPA
In November we acquired Trax Portable Access Limited (TPA) for an initial
consideration of £11.5 million; further additional consideration of up to £7.9
million may be payable dependent upon the financial performance of the company
in each of the three years commencing 1 January 2006, 2007 and 2008.
TPA is a leading supplier of portable roadways, bridging, fencing and barrier
systems to the power transmission, telecommunications, construction, defence and
rail markets. TPA operates in the UK, with satellite activities in the Republic
of Ireland, France and Germany.
TPA represents a new product area for the Group and will operate as a separate
business unit led by the retained management team. TPA occupies the same strong
market position and employs the same core skills of asset management that are
common to all Vp businesses. We believe that TPA represents an ideal sixth
business stream to supplement the Group's longer-standing businesses.
Trading performance in the initial period since acquisition encompassed the slow
winter period and was below expectations with a reported loss of £0.3 million on
revenues of £2.5 million.
Since the beginning of the new financial year activity has picked up
significantly and we expect a satisfactory first full year contribution.
Outlook
This time last year the Board signalled its intention to utilise the financial
strength of the Group more positively. We are pleased that in the period we
have been able to deliver both organic growth and acquisition derived
opportunities in support of our longer term growth aspirations.
The main challenge for us as we enter the new financial year is to deliver the
promise offered by the businesses we acquired in 2005/2006, whilst of course not
neglecting the continuing profit contribution from our existing businesses.
The economic and competitive environment, as always, presents a number of
challenges but we are cautiously optimistic of our ability to deliver further
progress in the year ahead.
Jeremy Pilkington
Chairman
8 June 2006
BUSINESS REVIEW
The year ended 31 March 2006 has seen significant developments and acquisition
activity in support of the continuing growth aspirations of the Group. In the
year under review we have added a sixth division, TPA, acquired two market
leading niche businesses, Dudley Vale and ESS (via the Pivotal acquisition), and
latterly acquired Bukom Oilfield Services, doubling the size of our successful
Airpac Oilfield Services activity.
Profits before tax grew to £10.7 million. This represents a 13% increase in
profits before the £0.5 million restructuring charge arising from the Pivotal
Group acquisition. Revenues grew by 10% to £99.4 million.
Net debt increased by £30.2 million to £32.6 million after taking into account
total cash consideration and assumed debt in the acquisitions of £36.1 million.
Gearing increased to 54% after gross capital expenditure of £18.1 million.
Interest cover was 14.5 times (2005: 33.1 times).
Markets were generally supportive in oil and gas, housebuilding, and general
construction, but the water and rail sectors provided a reduced level of demand
for our services in the year.
UK Forks
Rough terrain material handling equipment for industry, residential and general
construction.
Revenue £14.3m (2005: £12.8m)
Operating Profit £2.1m (2005: £1.4m)
Investment in Rental Fleet £3.1m (2005: £3.1m)
UK Forks produced excellent results in the year, profits increasing by 44%
driven in part by a 11% improvement in revenue. The business continued to
improve return on capital employed.
Revenue growth was sustained over the course of the year mainly driven by
success with a number of national housebuilding and construction businesses.
Whilst site activity was at healthy levels for the majority of the year, we did
experience some slow down in the final quarter. We anticipate that growth in
the current year will reflect a more muted market outlook.
In the housebuilding sector pressure increased on the supply chain to take cost
out of the system creating an appetite for national supply agreements. It was
in support of these requirements that UK Forks were able to offer their unique
offering of telehandlers on a national basis. In addition, supply chain
agreements were secured with a number of large general construction customers,
particularly in the specialist areas of roofing and cladding.
Investment in the fleet was driven by the needs of the market. With the density
of housebuilding sites increasing, developments are taller than ever before -
flats and apartments now account for over 40% of domestic build. Whilst this
led to a requirement for larger telehandlers it also meant that sites were
tighter, fuelling the need for the more specialist rotational products. New
fleet consequently covered all applications - the smallest being the 4 metre
products designed for operating in height restricted areas with the largest
being the versatile 25 metre rotational telehandler. The current range of over
1,200 machines therefore reflects an evolving market place where health and
safety issues are ever more prevalent.
In the year ended 31 March 2006, UK Forks enjoyed the benefits of investing in
long term relationships with key customers. This philosophy continues into the
New Year with further investment planned to consolidate our key customer
support.
Groundforce
Excavation support systems and specialist products for the water, civil
engineering and construction industries, including Piletec Dudley Vale - pile
driving and breaking; Stopper Specialists - pipe integrity testing; Survey
Technology - surveying and water flow measurement.
Revenue £23.5m (2005: £24.6m)
Operating Profit £5.3m (2005: £5.8m)
Investment in Rental Fleet £2.2m (2005: £2.5m)
Groundforce maintained its market leading position during the year but as
anticipated, revenues were held back by the time delay in the water industry
asset management programmes (AMP), the end of AMP3 and the commencement of AMP4.
Revenues reduced by £1.1 million to £23.5 million and profits of £5.3 million
were 9% down on prior year.
Shoring
The shoring business performed very satisfactorily in spite of the delay to
AMP4. Revenue was also adversely impacted by the finalisation of our
involvement in key construction contracts, such as Heathrow T5 and CTRL.
Generation of revenue therefore relied on the traditional civil engineering and
housing sectors, which remained buoyant. Overseas activity also contributed,
with business enjoyed from Ireland, France and the USA.
The streamlining of the operational base that commenced in 2004 was
substantially completed early in the year and the benefit was evident in the
profit line. Automation of a number of operational processes ensured that the
business further increased its efficiency. Ongoing projects continued to ensure
that the fleet holding was optimised and aligned to future demand. New products
were also introduced throughout the year as we continued to provide innovative
solutions to our customer base.
We anticipate that more substantive demand will commence from AMP4 during the
coming year and Groundforce Shorco is positioned to meet that demand which would
deliver incremental revenue growth.
Piletec Dudley Vale, Stoppers and Survey
Piletec's revenues were adversely affected by the lack of AMP4 work in
particular, resulting in a quieter year. However, towards the end of the
period, signs of improvement were evident and during that time, the business and
assets of Dudley Vale, a competitor of Piletec, were acquired from GE Capital to
form Piletec Dudley Vale. The integration was substantially complete by the
year end and the combined business is in excellent shape to benefit from the
increase in demand from the water sector and the planned flood alleviation
projects.
Stoppers performed to expectation and consolidated its business with a new
location in the North which was profitable in its first year of operation.
Survey progressed throughout the year, finessing the revenue, rationalising the
fleet holding and creating a central hire and sale desk, a concept well
established in other Vp businesses. Towards the end of the year, the survey
assets of Birse plc were acquired together with an ongoing rental agreement.
The consolidated survey business is now well placed to grow organically with
limited increase in the cost base.
Airpac Bukom Oilfield Services
Equipment and service providers to the international oil and gas exploration and
development markets.
Revenue £5.0m (2005: £4.5m)
Operating Profit £1.2m (2005: £1.1m)
Investment in Rental Fleet £0.8m (2005: £0.5m)
Airpac benefited from an active oilfield services sector across most of its
markets and produced another very satisfactory result. Profits at £1.2 million
were 10% ahead on improved revenue of £5.0 million, up 12%. This was an
important year for Airpac with the acquisition of Bukom Oilfield Services in
March 2006 for a consideration of £5.7 million. Bukom Oilfield Services,
similar in size to Airpac, doubled the size of the division in a single step.
The results incorporate three weeks' revenues of the expanded business, now
renamed Airpac Bukom Oilfield Services.
The continued strength of the oil price encouraged ongoing healthy levels of
global oil company spending. This in turn created high demand for oilfield
support services with Airpac's equipment fleet well placed to benefit from
serving a wide variety of oilfield segments and applications.
The well testing market in both the North Sea and Asia Pacific, where we provide
operated air compressor and steam generator packages, was buoyed by high
drilling rig utilisation in support of exploration and production activities.
Our Singapore operation continued to expand its support to customers in this and
other markets throughout the region.
Similarly, we enjoyed high demand for our specialist compressors from large
contractors supporting repair, maintenance and modification works on the
offshore platform infrastructure, particularly in the North Sea.
Bukom Oilfield Services has historically been focussed on supporting
international well testing operations. Geographically this provides us with
access into new markets in Africa, North and South America and the Middle East
whilst at the same time strengthening our position in Asia Pacific. The
business now has a truly international dimension supporting activities in more
than 50 countries. The addition of new products to the fleet via the
acquisition such as steam exchangers, sand filters and coflexip hoses enables us
to provide wider package solutions for our well testing clients whilst
complementing our existing air and steam offering to that market.
The fundamentals of our markets remain strong and with our expanded fleet
capacity, geographic coverage and product range, combined with a much stronger
international focus the business is well positioned to benefit from the many
opportunities that the oil and gas market will offer.
Hire Station
Small tools and equipment for industry and construction, including the
specialist ESS Safeforce (safety and environmental products) and Lifting Point
(material handling and lifting gear hire activities).
Revenue £41.9m (2005: £34.8m)
Operating Profit*/(Loss) £1.9m (2005: £(0.7)m)
Investment in Rental Fleet £7.3m (2005: £5.7m)
*before Pivotal Group restructuring costs
Hire Station, after a year of repositioning in 2005, delivered an excellent
turnaround back to profit in the year.
Revenue grew by 21% including a part year contribution from the ESS acquisition.
Encouragingly, organic revenue improved by almost 10%, buoyed by some strong
key account wins.
Tool Hire
The tools business has made solid progress and we have continued to invest in
high demand core product rental assets through the branch network. The strong
availability of these assets has been a key factor in growing the number of
trading accounts.
We have also invested in our National Hire Desk in Manchester, which now
transacts almost 40% of annual tool hire revenues. A significant number of our
major customers deal through the central desk taking advantage of the
streamlined call handling and administrative process.
The introduction of a real time extranet facility has given our customers the
most up to date management information in the market place.
The product range was expanded during the year and amongst the many new products
launched, Hire Station were first to market with two new products, 'Towermatic'
and 'Pop Up Scissor', both manufactured in response to the new working at height
regulations.
We enjoyed very successful trading with our seasonal products - heating and
cooling revenues particularly were well up on prior year.
The introduction during the year of the new Hand Arm Vibration (HAV) regulations
and erection guidelines on tower were welcomed by our business. Operationally,
we responded quickly and in the case of alloy tower, we invested heavily in new
components to ensure all branches could meet the new guidelines.
During the year, we have expanded the National account sales team and plan to
increase this further in 2007 on the back of some very positive results.
The specialist lifting business, Lifting Point, had an improved year and in
November we added a further 13 satellite locations to the current network.
These satellites supported by the main hubs offer the higher return and higher
demand product lines. Plans are in place to extend this in the new financial
year as we seek to build distribution across all tool locations.
Overall the business enters the new financial year in good shape with the
restructuring of 2005 beginning to pay dividends and translating into real
profit growth. We plan to add a further 8 to 10 locations to our branch
network, which we believe will give us the optimum geographical infrastructure
of c.80 branches for our service offering.
ESS Safeforce
The specialist safety rental business Safeforce was boosted during the year
through the acquisition of ESS Safety Services, (via the Pivotal Services
acquisition), one of the longest established businesses in the safety equipment
market. We rebranded the two businesses as ESS Safeforce which is now
positioned as the market leading specialist rental, hire, sales and service
business for safety equipment in the UK.
ESS Safeforce has adopted the successful Vp model of centralising transactions
through a national hire desk based in Wellingborough, and is supported by a
national distribution infrastructure. In addition to its strong asset base, ESS
Safeforce also offers a range of confined space training courses to its national
customer base. In the year ending 31 March 2006, around 20,000 delegates passed
through its training venues.
The integration of the two safety businesses is now complete, and with the
prospects for good demand for safety equipment particularly as AMP4 commences,
ESS Safeforce is well placed to capitalise on any market upturn.
Pivotal Performance
Following the acquisition of the Pivotal Group, the training business Pivotal
Performance was significantly restructured to aid the elimination of losses
which had plagued the business pre-acquisition. The division finished the year
with a small trading loss before restructuring costs. The focus of the business
going forward is on the delivery of behavioural safety training, management
development and consultancy.
Torrent Trackside
Infrastructure equipment and services for the railway renewals and maintenance
industry.
Revenue £12.1m (2005: £13.3m)
Operating Profit £1.7m (2005: £2.5m)
Investment in Rental Fleet £2.4m (2005: £1.5m)
This has been a year of change and consolidation in the rail industry. However,
Torrent have retained their number one status in the market of rail portable
plant, assisted by considerable growth in London Underground activity. As
anticipated activity levels dropped in the year with revenue reduced by 9% to
£12.1 million and operating profits of £1.7 million, down £0.8 million on prior
year.
Torrent are now established as a major support supplier for Network Rail's plant
maintenance work, having lost out on the main plant supply contract. Although
margins have been depressed this revenue stream has assisted in maintaining
activity levels in a market where many suppliers have encountered considerable
reductions in demand.
Our status as the major portable rail plant supplier has been further
strengthened with the recent inclusion of additional specialist rail plant,
broadening our product portfolio. These new products also offer additional
revenue potential as they can be supplied with operators to increase reliability
and customer productivity.
Torrent's compliance and IT standards have been taken to a new level during the
year and whilst adding to our overheads, we see this support service as an
important part of our offering, and highlighting our commitment to providing a
quality service to all of our customers.
Network Rail are determined to increase punctuality, reliability and ride
quality for passengers. Major contractors' workloads are already in place and
we are well positioned in the new financial year to satisfy demand for top
quality plant and associated services in support of this workload.
Whilst Torrent experienced a quieter year, this excellent business remains at
the top of its market and is well positioned to remain a key supplier to the
rail maintenance and renewal market in the future, notwithstanding our
expectation of further volatility in the market going forward.
TPA
TPA is a leading supplier of portable roadways, fencing, barriers, bridges and
pedestrian ground access systems, primarily in the UK but also in Ireland and
mainland Europe. The markets served by TPA include the European events market,
rail, construction, telecommunications and power transmission.
The acquisition of TPA in November 2005 marked the addition of a new division to
Vp. A relatively young business and the fastest growing in its sector, we
identified a rare opportunity to invest in a business of such quality. The
revenue in the period since November was £2.5 million, delivering a small
operating loss of £0.3 million. We have invested £1.1m in the rental fleet since
acquisition. The winter represents their quietest trading period, and this was
accentuated by a combination of exceptionally dry weather conditions and slow
construction demand. We anticipate that the highly experienced management team
will drive TPA to clear market leadership in the near term. The company's
excellent commitment to customer service was underlined by TPA winning a
prestigious Queens Award for Enterprise in the product innovation category
during 2005.
Activity levels since the start of the new financial year have been very good
and further significant investment in portable roadways and barriers has been
made in support of this demand. TPA recently opened their new satellite depot
in Scotland. Prospects for this business remain excellent.
Prospects
We are well placed as we enter the new financial year to capitalise on the
potential created from the substantial investments made in the latter half of
the year, and believe that the markets which we serve will be broadly supportive
in the coming year. We remain focussed on delivering further growth and
opportunities for further relevant expansion will be pursued as appropriate.
Neil Stothard
Group Managing Director
8 June 2006
Financial Highlights
Consolidated Income Statement
For the year ended 31 March 2006
Note 2006 2005
£000 £000
Revenue 1 99,396 90,044
Cost of sales (72,092) (64,551)
Gross profit 27,304 25,493
Administrative expenses (15,842) (15,297)
Operating profit 1 11,462 10,196
Financial income 188 135
Financial expense (978) (443)
Profit before taxation 10,672 9,888
Taxation 5 (3,070) (2,815)
Profit for the year 7,602 7,073
Pence Pence
Earnings per 5p ordinary share 2 17.49 16.31
Diluted earnings per 5p ordinary share 2 16.83 15.79
Dividend per 5p ordinary share paid and 6 6.60 5.75
proposed
Consolidated Statement of Recognised Income and Expense
For the year ended 31 March 2006
Note 2006 2005
£000 £000
Actuarial gains/(losses) on defined benefit pension schemes 231 (1,310)
Tax on items taken directly to equity (67) 393
Effective portion of changes in fair value of cash flow
hedges (89) -
Foreign exchange translation difference - 4
Net income recognised direct to equity 75 (913)
Profit for the year 7,602 7,073
Total recognised income and expense for the year 3 7,677 6,160
Consolidated Balance Sheet
As at 31 March 2006
Note 2006 2005
£000 £000
ASSETS
Non-current assets
Intangible assets 33,637 7,468
Property, plant and equipment 66,054 48,676
Total non-current assets 99,691 56,144
Current assets
Inventories 3,119 2,136
Income tax receivable 34 140
Trade and other receivables 28,177 21,929
Cash and cash equivalents 4 5,587 5,755
Total current assets 36,917 29,960
Total assets 136,608 86,104
LIABILITIES
Current liabilities
Interest bearing loans and borrowings 4 (2,148) (159)
Trade and other payables (21,793) (13,925)
Income tax payable (1,235) (1,628)
Total current liabilities (25,176) (15,712)
Non-current liabilities
Interest bearing loans and borrowings 4 (36,062) (8,033)
Employee benefits (2,894) (3,916)
Other payables (7,930) -
Deferred tax liabilities (4,223) (3,013)
Total non-current liabilities (51,109) (14,962)
Total liabilities (76,285) (30,674)
Net assets 60,323 55,430
EQUITY
Issued share capital 2,309 2,309
Share premium account 16,192 16,192
Hedging reserve (89) -
Retained earnings 41,884 36,902
Total equity attributable to equity holders of the parent 60,296 55,403
Minority interests 27 27
Total equity 3 60,323 55,430
Consolidated Cash Flow Statement
For the year ended 31 March 2006
2006 2005
£000 £000
Cash flow from operating activities
Profit before taxation 10,672 9,888
Pension fund contributions (above) / below service cost (791) 12
Share based payment charge 292 206
Financial income (188) (135)
Financial expense 978 443
Intangible amortisation 4 -
Depreciation 12,224 11,045
Profit on disposal of property, plant and equipment (2,275) (1,190)
Operating profit before changes in working capital 20,916 20,269
Increase in inventories (559) (94)
Increase in trade and other receivables (579) (251)
Increase in trade and other payables 2,832 207
Cash generated from operations 22,610 20,131
Interest element of finance lease rental payments (111) (6)
Interest received 188 135
Interest paid (710) (479)
Income tax paid (3,120) (3,277)
Net cash flow from operating activities 18,857 16,504
Cash flow from investing activities
Acquisition of businesses (28,955) (204)
Purchase of property, plant and equipment (15,506) (15,145)
Disposal of property, plant and equipment 6,181 5,957
Net cash flow from investing activities (38,280) (9,392)
Net cash flow before financing activities (19,423) 7,112
Cash flow from financing activities
(Repurchase)/sale of own shares (1,073) 153
Repayment of borrowings (8,000) (111)
Repayment of loan notes (125) (120)
Proceeds from new loans 33,500 -
Capital element of Hire Purchase Agreements (2,475) (156)
Dividends paid (2,572) (2,214)
Net cash flow from financing activities 19,255 (2,448)
(Decrease)/increase in cash and cash equivalents (168) 4,664
Cash and cash equivalents at the beginning of the year 5,755 1,087
Effect of exchange rate fluctuations on cash held - 4
Cash and cash equivalents at the end of the year 5,587 5,755
NOTES
The preliminary results have been prepared on the basis of the accounting
policies which are to be set out in Vp plc's annual report and accounts for the
year ended 31 March 2006.
EU Law (IAS Regulation EC1606/2002) requires that the consolidated accounts of
the group for the year ended 31 March 2006 be prepared in accordance with
International Financial Reporting Standards ('IFRS's') as adopted for use in the
EU ('adopted IFRS's').
The financial information set out above does not constitute the company's
statutory accounts for the years ended 31 March 2006 or 2005. The statutory
accounts for 2005 have been delivered to the registrar of companies and those
for 2006 will be delivered following the Company's Annual General Meeting. The
auditors have reported on these accounts; their reports were unqualified and did
not contain a statement under section 237 (2) or (3) of the Companies Act 1985.
Details of how the group's results and financial position are impacted by the
change to adopted IFRS's are set out in the group's IFRS restatement report
which was issued on 18 November 2005. Since the announcement a refinement of
the share option models for cash settled options has led to a further charge of
£144,000 for the year ended 31 March 2005 and an associated reduction in
deferred tax.
The preliminary results were approved by the board of directors on 7 June 2006.
1. Business Segments
Revenue Depreciation Operating profit (loss)
and amortisation
2006 2005 2006 2005 2006 2005
£000 £000 £000 £000 £000 £000
Groundforce 23,542 24,629 2,313 2,389 5,258 5,766
UK Forks 14,307 12,843 2,416 1,994 2,071 1,438
Airpac Bukom 4,997 4,480 757 671 1,242 1,131
Hire Station 41,937 34,787 4,531 4,158 1,433 (650)
Torrent Trackside 12,134 13,305 1,485 1,541 1,733 2,511
TPA 2,479 - 428 - (275) -
Group - - 298 292 - -
Total 99,396 90,044 12,228 11,045 11,462 10,196
Group costs have been allocated across the trading divisions and included above.
2. Earnings Per Share
Basic earnings per share is based on the profit after taxation of £7.6m (2005:
£7.1m) and the weighted average number of 5p ordinary shares in issue during the
year of 43,460,000 (2005: 43,374,000).
2006 Weighted 2005
Average Shares Weighted
Number 000's Average
Shares
Number 000's Earnings per
share pence
Earnings per
share
Earnings £000 Earnings
pence
£000
Basic earnings 7,602 43,460 17.49 7,073 43,374 16.31
Share options - 1,697 - - 1,423 -
Diluted earnings 7,602 45,157 16.83 7,073 44,797 15.79
3. Consolidated Statement of Changes in Equity
2006 2005
£000 £000
Total recognised income and expense for the year 7,677 6,160
Dividends paid (2,572) (2,214)
Net movement in shares held by Vp Employee Trust at cost (1,073) 153
Share option charge in the year 292 206
Gains/(losses) on disposal of shares 80 (12)
Tax movements on equity 489 241
Change in Equity 4,893 4,534
Equity at start of year 55,430 50,896
Equity at end of year 60,323 55,430
4. Analysis of Debt
At At
31 March 1 April
2006 2005
£000 £000
Cash and cash equivalents (5,587) (5,755)
Current debt 2,148 159
Non current debt 36,062 8,033
Net debt 32,623 2,437
Year end gearing (calculated as net debt expressed as a percentage of
shareholders' funds) stands at 54% (2005: 4%).
5. Taxation
The charge for taxation for the year represents an effective tax rate of 28.8%
(2005: 28.5%). The effective tax rate excluding adjustments in respect of prior
years is 29.6% (2005: 31.0%).
6. Dividend
The Board has proposed a final dividend of 4.65 pence per share to be paid on 2
October 2006 to shareholders on the register at 8 September 2006. This,
together with the interim dividend of 1.95 pence per share paid on 6 January
2006 makes a total dividend for the year of 6.60 pence per share.
7. Annual Report and Accounts
The Annual Report and Accounts for the year ended March 2006 will be posted to
shareholders on or about 28 July 2006.
This information is provided by RNS
The company news service from the London Stock Exchange
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