VP maintains performance although telehandler division hit hard
By Murray Pollok05 June 2009
An 18% fall in its UK Fork division - which rents telehandlers to housebuilders and the construction sector - and a modest 2.5% revenue decrease it its largest division, tool hire business Hire Station, was offset by growth in three of its other rental divisions: Groundforce (up 8%), Airpac Bukom Oilfield Services (up 12%) and TPA (up 11.4%). Its railway equipment division, Torrent Trackside, saw revenues unchanged at £14 million (€16 million) although operating profit before amortisation actually rose by a third.
Vp's chairman, Jeremy Pilkington, said the results were "very satisfactory" under the current economic circumstances and forecast a satisfactory financial year 2009, "although we expect the new financial year to be more challenging." He said VP was partially protected from the downturn by its business in regulated industries and niche construction markets, and by management having taken timely actions.
He said 2009 would be challenging, with Government spending likely to be constrained and the likelihood of delays in some oil and gas related activity that would impact on its Airpac Bukom business.
The company's most profitable division was Groundforce, which provides trenching and trenchless technology equipment. It reported operating profits before amortisation of £11.0 million (€12.5 million) on revenues of £37.8 million (€43.1 million).
The largest division, Hire Station, which is a tool hire business, saw operating profits of £6.4 million (€7.3 million) on sales of £55.7 million (€63.5 million).
The Airpac Bukom business rents equipment to the oil and gas market worldwide - and has operations in the UK, Western Australia, the Middle East and South America - and reported sales up 12% to £14.7 million (€16.7 million), with operating profit before amortisation of £3.9 million (€4.4 million).
Trading at the telehandler business UK Forks was described as "extremely challenging", and resulted in profits falling 62% to £1.2 million (€1.4 million) on sales of £13.2 million (€15 million).
Neil Stothard, group managing director, said the company anticipated a general trend for markets to slow down; "The focus of the Group in the near term is to conserve cash, by significantly reducing rental fleet expenditure, tightening working capital management and by negotiating better supply chain arrangements."