VP profit falls as Brandon Hire Station and housebuilding woes drag on results
Full-year profit and revenue at the equipment rental specialist VP has tumbled amid challenges in its housebuilding and construction segments.
Pre-tax profit and adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) both fell two per cent, to £39.7m and £91m respectively, in the 12 months to April.
On a statutory basis, pre-tax profit tumbled 90.9 per cent to just £2.8m, in large part down to the impact of £27.7m of non-cash impairment at its construction subsidiary, Brandon Hire Station.
Revenue slipped marginally by 0.8 per cent to £368.7m.
Anna Bielby, Chief Executive of Vp plc, said: “The group has again delivered sector-leading returns, led by a strong performance in Infrastructure.
“Whilst some economic uncertainty remains, particularly in Construction and Housebuilding, we remain confident in our ability to react to changes in end markets and take advantage of economic improvements.”
A “subdued” housing market has led to reduced customer volumes in VP’s housebuilding segment UK Forks.
Meanwhile, Brandon Hire Station, which hires tools and other products for the construction sector, experienced “challenging trading conditions throughout the year, leading to a disappointing performance and lower activity levels than last year.”
After a top brass shake-up, which saw M Group’s Mark Hamilton join as managing director in September, a review into the subsidiary, which remains a significant part of VP’s total revenue, was undertaken. Some £27.7m in assets were written off throughout the year as a result of Brandon Hire Station’s subpar performance.
Shares in VP are broadly level so far in 2023 but dropped around 2 per cent in early trading on Wednesday.
Looking ahead, the company said that while “some economic uncertainty” remained, it had made a solid start to the financial year and expects results to be in line with expectations.
“We have made considerable progress in FY24 with new leadership and a refreshed strategy. 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,” Bielby said.