VP plc · LSE:VP.
VP — FY2017 Earnings Presentation
29 slides from VP's earnings presentation, June 2017
Slide 1: Results for the year ended 31 March 2017
1 DRAFT #3 (24 Nov) Presentation Theto Carillion Equipment Rental Specialist 9th June 2010 Results for the year ended 31 March 2017 The Equipment Rental Specialists The Equipment Rental Specialists
Slide 2: Strategy and Highlights, Operational Review, Financial Review
2 Strategy and Highlights Operational Review Financial Review
Slide 3: Strategy and Highlights
Strategy and Highlights ; mn | UNIAN ii —
Slide 4: Our aim is to create sustainable value
4 Our aim is to create sustainable value Resilient & proven model First class asset management Specialist equipment rental Buy quality products at competitive prices Market leading positions in niche sectors Maintain assets through rental life cycles Diverse markets in the UK and Overseas Use strong
Slide 5: A year of substantial progress
5 A year of substantial progress ● Strong profits – PBTA increase of 17% ● Revenue growth of 19% ● Strong investment in rental fleet – up 25% to £57.6m ● Acquisitions delivered: TR Pty and Tech Rentals New Zealand JMS and Zenith Survey (post year end) ● High quality return on capital at 16% ● Fo
Slide 6: Positive long term momentum
6 Positive long term momentum Revenue Profit before tax and amortisation (£m) (£m) 34.9 35 248.7 250 29.8 208.7 30 205.6 26.8 200 183.1 25 167.0 20.1 150 20 17.4 15 100 10 50 5 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Revenue growth, aided by acquisitions Profits doubled in 4 years
Slide 7: Operational Review
7 Operational Review
Slide 8: Key markets
8 Key markets Infrastructure Housebuild Oil & Gas Construction
Slide 9: Market dynamics
9 Market dynamics Revenue Growth/ decline 2017 2016 Market segment on £m £m prior year Infrastructure* 105.0 92.1 +14% Construction 66.2 60.0 +10% Housebuilding 31.5 25.7 +23% Oil & Gas 21.5 19.7 +9% Other (inc. Events & Defence) 24.5 11.2 +119% Total 248.7 208.7 +19% *Utilities, Rail, Transmission
Slide 10: Business performance - Group
10 Business performance - Group 2017 2016 £m £m Revenue 248.7 208.7 +19% PBITA 37.8 31.9 +18% Operating margin 15.2% 15.3% o Excellent UK performance o Strong profit growth o Core markets very supportive, bar offshore oil & gas o Post year end acquisitions
Slide 11: Business performance - UK
11 Business performance - UK 2017 2016 £m £m Revenue 220.0 193.6 +14% PBITA 35.9 30.7 +17% Operating margin 16.3% 15.9% o Infrastructure growth – Groundforce o Construction opportunity – buoyant trading in Hire Station o Stable housebuild market – UK Forks o Busy rail sector – Torrent Trackside o Ma
Slide 12: Business performance - International
12 Business performance - International 2017 2016 £m £m Revenue 28.7 15.2 +89% PBITA 1.9 1.2 +53% Operating margin 6.6% 8.1% o Maiden, part year contribution from TR Group in Australia o TR Group integrating well into Vp o Global offshore oil & gas remains challenging for Airpac Bukom, though early
Slide 13: Fleet investment
13 Fleet investment 2017 2016 £m £m UK 53.9 44.5 International 3.7 1.4 Total fleet investment 57.6 45.9 Disposal proceeds (16.7) (17.2) Net expenditure on fleet 40.9 28.7 o Strong fleet capex in UK o Growth investment into Hire Station/Groundforce/TPA o International fleet capex – TR Group
Slide 14: Acquisitions
14 Acquisitions April 2016 – TR Group Pty – Australia, Malaysia, New Zealand ○ test & measurement, communications and audio visual rental ○ consideration A$17.4m plus A$6.6m debt November 2016 – TechRentals New Zealand ○ test & measurement and calibration services ○ consideration NZ$2.6m Post Year E
Slide 15: Outlook
15 Outlook ● Good momentum into new financial year ● Market sectors continue to be broadly supportive ● Infrastructure, housebuild and construction provide solid base ● Offshore oil & gas recovery expected in medium term ● Long term objective is to deliver growth in specialist rental markets in the
Slide 16: Financial Review
16 Financial Review
Slide 17: Financial highlights – significant growth
Financial highlights – significant growth 17 2017 2016 £m £m Revenue 248.7 208.7 +19% EBITDA 71.2 59.3 +20% Depreciation (33.5) (27.4) +22% EBITA 37.8 31.9 +18% Interest (2.9) (2.1) Profit before tax and amortisation 34.9 29.8 +17% Net margin 14.0% 14.3%
Slide 18: Earnings per share
18 Earnings per share 2017 2016 69.5p 62.2p +12% Basic EPS (pre amortisation) £34.9m £29.8m +17% Profit before tax and amortisation 39.2m 38.9m Weighted average number of shares 22.0% 18.6% Effective tax rate
Slide 19: Full year dividend – 17% increase
Full year dividend – 17% increase 19 2017 2016 Full year dividend per share 22.0p 18.9p +17% Dividend cover 3.2x 3.3x - EPS pre amortisation 69.5p 62.2p +12% Dividend per share (pence) 24 22.0 22 20 18.9 18 16.5 16 14.0 14 12.3 12 11.4 10 8 6 2012 2013 2014 2015 2016 2017
Slide 20: ROACE – very robust
ROACE – very robust 20 20 18 16.2% 16.2 16.3% 16.3 16.0% 16.0 16 13.3% 13.3 13.5% 13.5 14 12 10 8 6 4 2 0 2013 2014 2015 2016 2017
Slide 21: Solid balance sheet
21 Solid balance sheet 2017 2016 £m £m Property, plant and equipment 195.6 167.2 Intangible assets/goodwill 47.5 46.4 Net working capital (1.9) (2.3) Other (5.0) (3.8) Net debt (98.9) (86.1) Net assets 137.3 121.4
Slide 22: Strong cash generation
22 Strong cash generation 2017 2016 £m £m EBITDA 71.2 59.3 +20% Cash from operations 69.9 47.9 Capital expenditure (64.7) (50.2) Proceeds from disposals 16.7 17.2 Interest and tax (7.4) (6.9) Acquisitions (10.0) (7.1) Dividends (7.6) (6.6) Other (5.8) (10.5) Debt acquired (3.9) (3.1) Change in net d
Slide 23: Net debt and facilities - headroom
23 Net debt and facilities - headroom Facilities Facilities Net Debt Net Debt 2017 2016 2017 2016 £m £m £m £m RCF expiring May 2020 65.0 45.0 RCF expiring December 2021 55.0 50.0 Total RCF 120.0 95.0 107.0 88.0 Overdraft 5.0 5.0 - - Bank balances (10.1) (4.5) Finance leases 2.0 2.6 2.0 2.6 Total 127
Slide 24: Significant headroom against covenants
24 Significant headroom against covenants 16.0 15.24 14.20 14.0 13.00 EBITA 12.0 Interest 10.0 Cover 8.0 6.0 4.0 2.0 FY 15 FY 16 FY 17 3.0 2.5 2.0 1.45 1.39 Net Debt / 1.5 1.24 EBITDA 1.0 0.5 0.0 FY 15 FY 16 FY 17
Slide 25: Any Questions?
25 Any Questions?
Slide 26: Supplementary Schedules
26 Supplementary Schedules
Slide 27: Effective rate of tax - reconciliation
27 Effective rate of tax - reconciliation 2017 2016 % % Standard rate 20.0 20.0 Impact of tax rate change - (1.3) Permanent disallowables 0.6 0.9 Chattels (1.4) (1.8) Prior year adjustments 0.5 0.1 Non qualifying depreciation 0.7 0.7 Overseas tax rate 0.1 0.1 Impairment of intangibles 1.6 - Other (0
Slide 28: Group history – 1954 to date
Group history – 1954 to date 28 2016 Acquisition of Higher Access and TR Pty Ltd (Australia) 2001 Hire Station f ormed through merger of 5 regional tool businesses 2017 1954 2005 2000 TPA and ESS Vibratory Roller & Plant Hire UK (Northern) Limited founded acquired 1990 Forks 2017 Groundforce divisio
Slide 29: UK division International division
29 UK division Rough terrain material handling equipment and tracked access platforms Excavation support systems and specialist products Tool hire, safety equipment, press fitting and low level access Infrastructure equipment and services to the railway renewals and maintenance sector Portable roadw