Slide 1: Results for the year ended 31 March 2020
Results for the year ended 31 March 2020 The Equipment Rental Specialist
Slide 2: Agenda
Agenda Strategic Aim and Highlights 1. Strategic Aim and Highlights 2. Market and Trading Review Market and Trading Review 3. Financial Review Financial Review Vp plc | The Equipment Rental Specialist | 2
Slide 3: Strategic Aim and Highlights
Strategic Aim and Highlights
Slide 4: Our aim is to create sustainable value
Our aim is to create sustainable value Strategic Aim and Highlights Resilient and First class proven model asset management Market and Trading Review UK & International Building on Financial Review Specialist Rental core attributes Vp plc | The Equipment Rental Specialist | 4
Slide 5: Very satisfactory performance against a difficult backdrop
Very satisfactory performance against a difficult backdrop Strategic Aim and Highlights • Revenues held Profits Operating Margins back by UK + 1% Construction + 6% downturn Profits maintained despite Market and Trading Review Improvement March covid-19 impact • Final month of Rental Fleet Return on
Slide 6: Best in sector profit performance
Best in sector profit performance Strategic Aim and Highlights Revenue Profit before tax, amortisation and exceptional items 12% compound growth over 5 years 10% compound growth over 5 years 450 50 46.8 47.1 400 382.8 45 Market and Trading Review 362.9 40.6 350 40 303.6 34.9 300 35 29.8 248.7 30 250
Slide 7: Market and Trading Review
Market and Trading Review
Slide 8: Key markets
Key markets Strategic Aim and Highlights Market and Trading Review Infrastructure Construction Housebuilding Oil & Gas Financial Review Vp plc | The Equipment Rental Specialist | 8
Slide 9: Market dynamics
Market dynamics Strategic Aim and Highlights Revenue Growth on 2020 (£m) 2019 (£m) prior year Market segment Infrastructure* 139.2 137.3 + 1% Construction 143.9 159.0 - 9% Market and Trading Review Housebuilding 34.2 35.0 - 2% Oil & Gas 25.2 32.2 - 22% Other 20.4 19.3 + 5% Total 362.9 382.8 - 5% * U
Slide 10: Business performance – Group
Business performance – Group Strategic Aim and Highlights 2020 (£m) 2019 (£m) Revenue 362.9 382.8 - 5% PBITA 51.9 51.6 +1% Market and Trading Review Operating margin 14.3% 13.5% UK Construction Improved Margins Resilient Profits Weaker Financial Review Vp plc | The Equipment Rental Specialist | 10
Slide 11: Business performance – UK
Business performance – UK Strategic Aim and Highlights 2020 (£m) 2019 (£m) Revenue 331.0 350.3 -6% PBITA 50.2 49.9 +1% Market and Trading Review Operating margin 15.2% 14.2% Cost efficiencies European growth AMP6 final year Stable - Groundforce/TPA Construction helped protected housebuilding Netherl
Slide 12: Business performance – International
Business performance – International Strategic Aim and Highlights 2020 (£m) 2019 (£m) Revenue 31.9 32.5 - 2% PBITA 1.7 1.7 -1% Market and Trading Review Operating margin 5.4% 5.3% Airpac Bukom - Europe / Asia improved Solid progress in TR - Australia weak Financial Review Vp plc | The Equipment Rent
Slide 13: Rental fleet investment
Rental fleet investment Strategic Aim and Highlights 2020 (£m) 2019 (£m) UK 41.0 57.4 International 8.1 6.4 Total fleet investment 49.1 63.8 Market and Trading Review Disposal proceeds (21.4) (20.0) Net expenditure on fleet 27.7 43.0 Overall fleet investment reduced Capital investment maintained Fle
Slide 14: Covid-19 Response
Covid-19 Response Post lockdown during March, Group revenues reduced severely to c.55% of normal levels We continued to provide support to essential service providers April was the low point in activity Housebuilding and construction returned in May – revenues continuing to grow in June Ro
Slide 15: Outlook
Outlook Strategic Aim and Highlights Slow, incremental recovery over the coming Recovery is to a degree, dependent on months markets re-opening Severe revenue reduction in April Strong experienced senior management to steer through the crisis Market and Trading Review Maintained focus on c
Slide 16: Financial Review
Financial Review
Slide 17: Financial highlights – satisfactory performance
Financial highlights – satisfactory performance Strategic Aim and Highlights 2020 (£m) 2019 (£m) Revenue 362.9 382.8 -5% EBITDA 98.1 101.4 -3% Depreciation (46.2) (49.8) -7% Market and Trading Review EBITA pre IFRS 16 51.9 51.6 +1% Interest excluding IFRS 16 (4.8) (4.8) PBTA (and exceptionals) 47.1
Slide 18: Earnings per share and dividends
Earnings per share and dividends Strategic Aim and Highlights Dividend per share (pence) 35 30.2 30 26.0 Market and Trading Review 25 22.0 2020 2019 20 16.5 EPS pre amortisation, 15 91.0p 95.1p +5% exceptionals and IFRS 16 10 8.5 Due to Covid 19 dividend decision delayed. 5 Interim dividend 8.45 pen
Slide 19: ROACE – robust
ROACE – robust Strategic Aim and Highlights 20 18 16.3% 16.0% 16 14.8% 14.5% 14.5% 14 Market and Trading Review 12 10 8 WACC 6 4 Financial Review 2 0 2016 2017 2018 2019 2020 Vp plc | The Equipment Specialist | 19
Slide 20: Balance sheet
Balance sheet Strategic Aim and Highlights 2020 (£m) 2019 (£m) Property, plant and equipment 247.8 248.7 Intangible assets/goodwill 74.3 89.7 Market and Trading Review Net working capital 19.1 3.9 Other (8.2) (5.7) Net debt (159.8) (167.7) Net assets pre IFRS 16 173.2 168.9 IFRS Right of use asset 6
Slide 21: Strong cash generation
Strong cash generation Strategic Aim and Highlights 2020 (£m) 2019 (£m) EBITDA (pre IFRS16) 98.1 101.4 Cash from operations (pre IFRS 16) 74.3 92.7 Net capital expenditure (33.3) (54.6) Market and Trading Review Interest (4.5) (4.9) Tax (10.7) (7.9) Acquisitions (3.3) - Dividends (12.1) (10.9) Other
Slide 22: Net debt and facilities - headroom
Net debt and facilities - headroom Strategic Aim and Highlights Facilities FY FY 2020 (£m) 2019 (£m) Private placement matures Jan 2027 65.0 - RCF matured May 2020 - 65.0 Market and Trading Review RCF matures December 2021 135.0 135.0 Total RCF 200.0 200.0 Overdraft 7.5 7.5 Actual borrowing net debt
Slide 23: Headroom against covenants
Headroom against covenants Strategic Aim and Highlights EBITA Interest Cover > 3 times Net Debt / EBITDA < 2.5 times 20.0 3.0 18.0 Market and Trading Review 2.5 16.0 15.24 14.0 13.00 1.89 2.0 12.0 11.35 11.21 1.65 10.58 1.62 10.0 1.5 1.45 1.39 8.0 1.0 6.0 4.0 0.5 Financial Review 2.0 0.0 0.0 FY 16 F
Slide 24: Covid-19 amended covenants agreed
Covid-19 amended covenants agreed June 20 Sep 20 Dec 20 Mar 21 June 21 Quarter ended Net debt to EBITDA 2.50 3.25 3.50 3.75 2.50 < existing 2.5x Interest cover 3.00 2.25 0.50 (1.0) 3.00 > existing 3x Stress scenarios considered (material revenue reductions on conservative budget) All scenarios b
Slide 25: COVID-19 - actions
COVID-19 - actions Deferral annual pay review Participation in Job Retention Scheme Frozen non essential capex and recruitment Senior management voluntary salary reductions Rent payment holidays Rates and tax relief utilised Vp plc | The Equipment Rental Specialist | 25
Slide 26: Supplementary Schedules
Vp plc Supplementary Schedules
Slide 27: Effective rate of tax reconciliation
Effective rate of tax reconciliation 2020 (%) 2019 (%) Standard rate 19.0 19.0 Impact of tax rate changes 4.1 0.3 Permanent disallowables 1.0 3.1 Chattels (1.4) (1.2) Prior year adjustments 1.3 (0.6) Non-qualifying depreciation and amoritsation 1.4 1.2 Overseas tax rate 1.3 0.9 Impairment of intangi
Slide 28: Group history – 1954 to date
Group history – 1954 to date 2019 Acquisition of 2016 Sandhurst Acquisition of Higher Access 2014 and TR Pty 2007 Vp celebrates (Australia) MEP 60 years acquired 2005 2000 TPA and ESS UK Forks acquired 1996 division Cannon created Tool Hire acquired 2017 1982 Exit from Acquisition US powered USA of
Slide 29: Divisions
Divisions UK Rough terrain material handling equipment and tracked access platforms Excavation support systems and specialist products Portable roadway and temporary access solutions Tool and equipment hire Specialist safety, survey, communications and test measurement Mechanical, electrical and low
Slide 30: Central House, Beckwith Knowle, Harrogate
Central House, Beckwith Knowle Otley Road, Harrogate North Yorkshire, HG3 1UD T 01423 533400 www.vpplc.com Vp plc Company Number 481833