Vp beats oil and gas sector woes to report another record year

Chief executive Neil Stothard said that the construction market was a positive growth area for Vp.
Chief executive Neil Stothard said that the construction market was a positive growth area for Vp.

Vp, the equipment rental ​firm,​ reported an 11 per cent improvement in annual profits despite the challenging oil and gas sector.

The Harrogate-based firm said good growth in its other three core areas - infrastructure, housebuilding and construction - outweighed the woes in oil and gas.

Chief executive Neil Stothard said: "I think if you look beneath the divisional split, we have a good performance in three of our four areas, but the oil and gas market, not surprisingly, has been very tough. Whilst we remained profitable in oil and gas, we lost £5m year on year of revenue."

Vp reported pre-tax profits of £30m in the year to March 231, up from £27m the year before.

This was despite a modest 2 per cent increase in revenue to £209m.

Analyst James Tetley at N+1 Singer said: "Vp has reported a strong conclusion to a very busy year. Pre-tax profit increased by 11 per cent to £29.8m, 5 per cent ahead of forecast, as margins strengthened further.

"2016 was therefore another record year for the group with a positive growth outlook for 2017/18, underpinned by the recent acquisitions of Higher Access in March and TR Pty in April. The UK businesses continue to outperform peers in supportive markets and we nudge our pre-tax profit forecasts up despite ongoing headwinds for Airpac Bukom."

Vp has been busy on the acquisition trail and Mr Stothard said the group is very pleased with its recent deals.

"We've got an eye open for further acquisitions if they fit the bill. We don't want to overpay for them," he said.

"We'll be looking to develop our business in Asia Pacific, but we could also look in Europe of the UK."

He said that the construction market was a positive growth area for the group.

"We've seen good activity in the repair and maintenance side and we've been busy on fit out work on large office buildings," he said.

"Housebuilding was steady and positive and while infrastructure didn't grow, it's still a core area for us and makes up 50 per cent of group revenue. We've seen a reasonably strong rail market, but the first year of AMP pricing in the water industry creates slower trading."