For the year ended 31st March 2024 VP made a pre-tax profit of just £2.8m, down from £30.7m the previous year, on revenue broadly flat at £368.7m (2023: £371.5m).
After tax, the bottom line was a loss of £5.3m (2023: £30.7m profit).
However, these results include £31.2m of amortisation and impairment of goodwill, trade names and customer relationships plus £5.8m of exceptional items, mainly relating to its Brandon Hire Station division.
Adjusted profit before tax, amortisation, impairment of intangible assets and exceptional items was down only marginally, at £39.7m (2023: £40.5m).
Chair Jeremy Pilkington 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.”
In September 2023, after 26 years with the company and 19 years as managing director and CEO, Neil Stothard retired from the Board at the end of September 2023. He was succeeded as CEO by Anna Bielby, who stepped up from chief financial officer (CFO) after just nine months with the company.
Vp’s tool hire business, in particular, had a difficult year, as the new chief executive explained: “Brandon Hire Station experienced challenging trading conditions throughout the year, leading to a disappointing performance and lower activity levels than last year. 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. As a result of the division's performance, intangible assets, including goodwill, of £27.7m have been written off during the year.”
A new management team was put in at Brandon Hire Station [see previous report here], which undertook a review of the business, focusing on pricing, cost control and process. Actions in the year also included reviewing and optimising the branch network, leading to further closures and consolidations, and significant restructuring costs.
The £5.8m of exceptional items comprised £1.6m of costs from changes to the group's board and senior leadership team alongside branch closure costs of £4.2m, mainly in relation to Brandon Hire Station.
The downturn in house-building and construction also impacted other divisions, such as ESS and UK Forks.
It was not all bad news, however. In the railways sector, Torrent Trackside saw growth despite ongoing disruption caused by UK-wide industrial action, which led to the cancellation of several track projects. Notable projects include the TransPennine route upgrade programme, covering on-track activities for both the East and West legs, and the Core Valley Lines project led by Transport for Wales.
Groundforce, the shoring and propping business, also saw strong year-on-year growth, supporting projects across rail, utilities and electricity transmission. It supported HS2 on more than 30 sites during the year, with involvement in larger projects relating to sewer and utility diversions in London.
Capital investment in the rental fleet was maintained at £62.8m (2023: £59.9m), with an ongoing emphasis on transitioning towards more environmentally friendly solutions.
Chief executive Anna Bielby summed up the results by saying: "The group has again delivered sector-leading returns, led by a strong performance in infrastructure. Whilst some economic uncertainty remains, particularly in construction and house-building, we remain confident in our 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. 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."
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