Slide 1: Final results for the year ended 31 March 2024
Final results for the year ended 31 March 2024 5 June 2024 Anna Bielby, Chief Executive Keith Winstanley, Chief Financial Officer
Slide 2: Compelling investment case
Compelling investment case Key differentiators Financial profile Specialist rental model Continued strong returns • Specialist assets, markets and delivery • Target ROACE of 15% • Market leading positions in niche sectors • Strong margins • Young, well-maintained fleet Underpinned by our strategy •
Slide 3: FY24 highlights
FY24 highlights • Solid overall performance, with revenue of £368.7m and adjusted profit of £39.7m • Strong Infrastructure demand from rail, transmission and water sectors. Construction more challenging, leading to non cash impairment of £28m in Brandon Hire Station • £63m fleet capex in the year, c
Slide 4: FY24 – a year of change for Vp
FY24 – a year of change for Vp Refreshed people • New Group leadership and formation of Executive Committee • Fresh talent and expertise added • Simplified management structure • New management team in Brandon Hire Station Refreshed strategy – building on our successful history • Exploiting opportun
Slide 5: Financial review
Financial review Keith Winstanley Leader in equipment rental
Slide 6: Financial highlights
Financial highlights FY24 (£m) FY23 (£m) • Resilient trading despite some end market Revenue 368.7 371.5 challenges EBITDA 91.0 92.9 • Key metrics broadly inline with prior year • Results include strong performances in Depreciation (45.0) (46.9) Infrastructure and Energy markets Interest (6.4) (5.6)
Slide 7: Robust balance sheet positions us well
Robust balance sheet positions us well FY24 (£m) FY23 (£m) • Strong balance sheet positions the Group Hire fleet 226.0 220.6 well for the future Other fixed assets 30.9 31.8 • Continued investment in fleet - £63m Intangible assets/goodwill 28.6 57.7 during the year IFRS16 net liabilities (3.3) (3.9)
Slide 8: Strong operating cash flows and disciplined capital allocation
Strong operating cash flows and disciplined capital allocation • Closing net debt of £125.2m – reduction of £9.2m • Strong operating cash flows • Continued investment in asset base • Debt continues to be well managed with disciplined capital allocation policy Excludes lease liabilities Leader in equ
Slide 9: Comfortably operating within facilities
Comfortably operating within facilities FY24 (£m) FY23 (£m) • £90m RCF refinanced during the year Private placement - Jan 2027 65.0 65.0 Private placement - Apr 2028 28.0 28.0 • c.75% of year end net debt relates to low cost, fixed rate private placements RCF - matures Nov 2026* 90.0 90.0 • Operatin
Slide 10: Significant investment in hire fleet – with environmental focus
Significant investment in hire fleet – with environmental focus FY24 (£m) FY23 (£m) • Young, well maintained fleet, with increased investment in year Total fleet investment 62.8 59.9 • Organic growth is a key part of Disposal proceeds (25.3) (24.9) strategy, focused on market opportunity and strong
Slide 11: Consistent return on capital and progressive dividends
Consistent return on capital and progressive dividends Historic ROACE 16.0% 14.8% 14.5% 14.5% 14.5% 14.5% 14.4% 14.0% • Consistent strong returns and progressive dividend contribute to 12.0% WACC compelling investment case 10.0% 9.2% 8.0% • Improvement in ROACE, just below 6.0% 15% target and well a
Slide 12: Strategy update
Strategy update Anna Bielby Leader in equipment rental
Slide 13: Our strategy has been refreshed
Our strategy has been refreshed Making Vp more straightforward and greater than the sum of its parts Delivering growth Driving operational excellence • Continued investment to drive organic growth, focus on returns • Driving simplicity and consistency through operating model, supported by digital ro
Slide 14: Our corporate development plans will drive growth
Our corporate development plans will drive growth Specialist assets, specialist markets and specialist solutions Organic growth Acquisitions Selective disposals • Capex to support divisional • Specialist with growth potential • Inadequate returns growth, focus on market • Provides access or extensio
Slide 15: Our updated digital roadmap supports our strategy
Our updated digital roadmap supports our strategy Building on what we already have and investing modestly • Facilitates improved cross divisional working Harmonising our • Improves our ability to provide cross divisional solutions and systems and processes propositions at Vp Group level • Simpler ef
Slide 16: Our approach to ESG is pragmatic – the financials must work
Our approach to ESG is pragmatic – the financials must work Embedded in the way we work - teams, customers and supply chain • Development of fleet make-up Working with • Providing data and helping customers achieve their targets customers and suppliers • Supply chain engagement • Emissions inventory
Slide 17: Operational review
Operational review Leader in equipment rental
Slide 18: Our specialist divisions align to four end markets
Our specialist divisions align to four end markets UK Forks Groundforce 5% 7% TPA Revenue by division 8% Brandon Hire Station 39% ESS MEP Hire Torrent Trackside Airpac Rentals 41% Revenue by end market Tech Rentals Infrastructure Construction Housebuilding Energy Other Leader in equipment rental Vp
Slide 19: Infrastructure – very strong year with progress made
Infrastructure – very strong year with progress made Revenue £143m Market conditions Our performance (FY2023: £135m) • Market output grew by 4.0% year on • Very strong performance and growth 39% year across our divisions, led by • Major Control Period 6 (CP6) Groundforce rail projects included HS2 a
Slide 20: Construction – some challenges, particularly in non-residential
Construction – some challenges, particularly in non-residential Revenue £153m Market conditions Our performance (FY2023: £162m) • Decline in non-residential • Challenging end markets affected 41% construction output of 1.7% construction activity across our divisions • Clear trend from new commercial
Slide 21: Housebuilding – subdued but satisfactory performance
Housebuilding – subdued but satisfactory performance Revenue £28m Market conditions Our performance (FY2023: £29m) • Decline in new housebuilding of • UK Forks impacted by market 8% 11.5% year on year conditions but responded well: • Inflationary cost pressures, • Rightsized its fleet and heightened
Slide 22: Energy – strong performance exploiting supportive markets
Energy – strong performance exploiting supportive markets Revenue £26m Market conditions Our performance (FY2023: £22m) • Significant growth in Global Oil and • Strong performance from Airpac, 7% Gas market led by high oil prices capitalising on supportive market conditions, which are expected to •
Slide 23: Summary and outlook
Summary and outlook • Solid performance in FY24 • Continue to perform strongly in our specialist markets, despite some challenges • New leadership is now in place • Focus on delivering refreshed strategy, building on the Group’s successful history: • Exploiting opportunities to work together better
Slide 24: Q&A
Q&A Leader in equipment rental
Slide 25: Appendices
Appendices Leader in equipment rental
Slide 26: Capital allocation strategy
Capital allocation strategy Net debt / EBITDA less than 2x • Capital investment in rental fleet Organic growth • Short term investment in strategic transformation projects • Progressive dividend with 2x target cover Ordinary dividends • Full year dividend split c.1/3 interim, 2/3 final • Investment
Slide 27: Exceptional items and impairment
Exceptional items and impairment FY24 (£m) FY23 (£m) Exceptional items Restructuring and reorganisations 5.8 3.3 Formal Sale Process costs - 1.7 Total exceptional items 5.8 5.0 Intangible asset impairment Intangible assets impairment related to Brandon acquisition 27.7 - Other intangible asset impai
Slide 28: Corporate development – focused and disciplined M&A
Corporate development – focused and disciplined M&A Example focus areas: Clear criteria Specialist asset types • Specialist in nature Electric / hybrid Test & Measurement Communications • Operating in growing, resilient sectors • No.1 or no.2 player Power generation Decontamination Mobile welfare •
Slide 29: Medium term environmental roadmap
Medium term environmental roadmap Leader in equipment rental Vp plc | 29
Slide 30: Our businesses
Our businesses UK Forks MEP Hire One of the UK's leading specialist hirers of telescopic handlers. The products and The UK's largest provider of mechanical and electrical press fittings and low level services are utilised by its customers to improve safety and productivity on access platforms to the
Slide 31: Disclaimer
Disclaimer This presentation has been prepared by or on behalf of Vp plc (‘Vp’). The information set out in this presentation is not intended to form the basis of any contract. By attending (whether in person, by telephone or webcast) this presentation or by reading the presentation slides, you agre
Slide 32: Leader in equipment rental
Leader in equipment rental