Slide 1: Interim results - 30 September 2023
Interim results - 30 September 2023 The Equipment Rental Specialist Jeremy Pilkington, Chairman Stephen Wells – Derby Groundforce depot Anna Bielby, CEO 1
Slide 2: 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 3: Our business – Specialist equipment rental
Our business – Specialist equipment rental Our markets Our divisions Infrastructure Construction 38% 41% Housebuilding Energy 8% 6% Other 7% Vp plc | The Equipment Rental Specialist | 3
Slide 4: Investment case
Investment case Key differentiators: Financial profile: Growth and operational excellence: Specialist rental model Continued strong returns People Market leading positions in niche Target ROACE of 15%, Strong Refreshed Board and leadership team. sectors. Young, well maintained margins Experienced ma
Slide 5: Highlights
Highlights Resilient performance across key metrics, ahead of prior period with an increase in ROACE Strong Infrastructure demand from rail, transmission and water sectors £28 million fleet Capex in the period Robust balance sheet – well within covenants Refinance of £90 million RCF secured Interim
Slide 6: Financial review
Financial review Kyle Allison Vp plc | The Equipment Rental Specialist | 6 TPA Worksop depot
Slide 7: Financial highlights
Financial Review Financial highlights • Revenue increase of 2% H1 2024 H1 2023 FY 2023 represents good progress against (£m) (£m) (£m) some market headwinds, particularly in Construction Revenue 190.9 186.5 371.5 Adjusted EBITDA* 47.8 47.8 92.9 • Growth in Adjusted PBTAE* of 2%, despite higher inter
Slide 8: ROACE - Long term quality of earnings
Financial Review ROACE - Long term quality of earnings 16.0% 14.8% 14.7% 14.5% 14.5% 14.5% 14.4% • Return on average 14.0% capital employed continues to be a key 12.0% measure 10.0% 9.2% WACC • Strong ROACE 8.0% maintained, well above WACC 6.0% 4.0% 2.0% 0.0% FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
Slide 9: Strong balance sheet
Financial Review Strong balance sheet Sept 2023 Sept 2022 Mar 2023 • Strong balance sheet positions (£m) (£m) (£m) the Group well for future Hire fleet 219.7 223.6 220.6 opportunity Other fixed assets 31.2 31.4 31.8 • Young, well-maintained fleet Intangible assets/goodwill 56.9 60.8 57.7 with £28m i
Slide 10: Net debt - Strong cash generation
Financial Review Net debt - Strong cash generation 145 • Net debt excluding lease 125 10.5 liabilities of £133.4m, a slight 9.9 decrease since year end 44.7 105 2.1 21.2 • Strong operating cashfows £m 85 134.4 133.4 • Continue to refresh our asset base, gross capex of £28m 65 offset by proceeds of £
Slide 11: Net debt and facilities
Financial Review Net debt and facilities Sept 2023 Sept 2022 Mar 2023 • £90m RCF refinancing recently (£m) (£m) (£m) completed with covenants unchanged Private placement - Jan 2027 65.0 65.0 65.0 • Two private placements provide £93m of fixed low cost debt over the Private placement - Apr 2028 28.0
Slide 12: Continued investment in hire fleet
Continued investment in hire fleet • Continued investment in the H1 2024 H1 2023 FY 2023 hire fleet, focussed on market (£m) (£m) (£m) opportunity and performance Total fleet investment 27.8 33.8 59.9 • Focus on cleaner, greener hire Disposal proceeds (12.8) (12.2) (24.9) fleet (c25% of capex on low
Slide 13: Uninterrupted dividend track record
Financial Review Uninterrupted dividend track record Dividend per share (pence) 40.0 • 30 year uninterrupted 37.5 36.0 dividend track record 35.0 30.2 30.5 • Interim dividend of 11.5p 30.0 represents continued 26.0 25.0 progression and sustainable 25.0 profitability over the long term 20.0 • Dividen
Slide 14: Strategy
Strategy Dean Ellor and Jessica Fox Vp plc | The Equipment Rental Specialist | 14 UK Forks Derby depot
Slide 15: Our strategy
Our strategy Delivering growth Driving operational excellence • Strong track record of growth in specialist markets • Operational excellence is at the heart of Vp • Continued organic growth through capex • An efficient operating model delivering specialist • Disciplined M&A strategy solutions to our
Slide 16: ESG focus
ESG focus Next steps SBTi* validation of our Science Based Targets • Focus on social value strategy • Further progress of the TNFD** framework • More frequent reporting of carbon values c25% of capex in H1 on greener, lower emission fleet • Carbon literacy in our workforce by end of 2024 Continued i
Slide 17: Digital journey - driving growth and efficiency
Digital journey - driving growth and efficiency • We have digital capability in the specialist rental sector and our digital Customer experience Operational Customer roadmap is an important process engagement part of our strategy • We are embracing rapidly • Frictionless customer • Digitally optimis
Slide 18: Operational review
Operational review Jay Topping Vp plc | The Equipment Rental Specialist | 18 Torrent Trackside Lichfield depot
Slide 19: Markets by division
Markets by division 90.0 • Infrastructure and 80.0 Construction make up the majority of our business 70.0 alongside notable activities 60.0 in Housebuilding and Energy Revenue £m 50.0 40.0 • “Other” mainly relates to events, defence and 30.0 aviation 20.0 • Strong diversity of markets 10.0 across th
Slide 20: Our markets
Our markets Infrastructure Construction Housebuilding Energy Supportive markets in AMP7 Challenging markets Subdued but stable Supportive markets CP6 and Transmission Revenue Revenue Revenue Revenue £73.0m £78.5m £15.5m £11.8m (2023: £70.1m) (2023: £78.0m) (2023: £15.8m) (2023: £10.2m) 38% 41% 8% 6%
Slide 21: Infrastructure
Infrastructure Market conditions* Our performance • Held up well in 2023 • Groundforce enjoyed support from AMP7, Transmission and other pre-established • Viable pipeline and growth driven by infrastructure projects transport and energy projects • TPA benefitted from a supportive • Output is forecas
Slide 22: Construction
Construction Market conditions* Our performance • Decline in construction output of 1.4%, • A soft market and high operational gearing further contraction of 2% expected in 2024 led to a challenging half for Brandon Hire Station. New management team now in • It will take until 2025 for a meaningful
Slide 23: Housebuilding Energy
Housebuilding Energy Market conditions* Market conditions • Private and public housing sectors continue • Market support from exploration, to face several headwinds due to increased distribution and infrastructure maintenance interest rates, elevated materials costs and alongside renewed activity in
Slide 24: Summary and outlook
Summary and outlook Strong H1 performance with progress in key metrics Continue to leverage opportunities in our specialist markets, despite some challenges Operational excellence remains a priority with increased focus on our digital roadmap Strong balance sheet and recent refinance positions us we
Slide 25: Q&A
Q&A Dean Wellington MEP Rainham branch Vp plc | The Equipment Rental Specialist | 25
Slide 26: Digital initiatives Excavation Support
Digital initiatives Excavation Support Self Serve Design Solution Excavation Support has to be designed by suitably qualified Civil Engineers to meet British Standards and EuroCodes. The time to produce accurate and fully compliant drawings is substantial and remains a bottleneck for the Industry. G
Slide 27: ESG/ digital initiatives
ESG/ digital initiatives Carbon Calculators built in our Customer Portal for self service 24/7 Recently launched the self serve calculators are proving to be a success with customers who need to share the information with their clients. Feedback has been nothing but positive Vp plc | The Equipment R
Slide 28: Medium Term Environmental Roadmap
Medium Term Environmental Roadmap MEDIUM TERM ROADMAP TO NET ZERO BY 2050 2023-2033 Vp plc | The Equipment Rental Specialist | 28
Slide 29: ESG - Conservation projects
ESG - Conservation projects Vp plc | The Equipment Rental Specialist | 29
Slide 30: Our businesses
Our businesses Groundforce A market leading rental and design provider of excavation support systems and specialist Our divisions products to the water, civil engineering and construction industries with operations in the UK, the Republic of Ireland and mainland Europe. TPA One of Europe's largest s
Slide 31: Market revenue
Market revenue 90 80 78.5 78.0 73.0 70.1 70 60 £m 50 Revenue 40 30 20 15.5 15.8 11.8 12.2 12.4 10.2 10 0 Infrastructure Construction Housebuilding Energy Other H1 2024 H1 2023 Vp plc | The Equipment Rental Specialist | 31
Slide 32: UK & International split
UK & International split Revenue Operating Profit before Amortisation and Exceptional Items H1 2024 H1 2023 FY 2023 H1 2024 H1 2023 FY 2023 (£m) (£m) (£m) (£m) (£m) (£m) UK 171.3 166.9 333.4 24.2 23.8 45.6 International 19.6 19.6 38.1 2.4 1.6 3.2 190.9 186.5 371.5 26.6 25.4 48.8 Amortisation and (1.
Slide 33: Central House Beckwith Knowle Otley Road
Central House Beckwith Knowle Otley Road Harrogate North Yorkshire HG3 1UD T 01423 533400 www.vpplc.com Vp plc Company Number 481833 Allan Smith & Michael Mathieson Vp plc | The Equipment Rental Specialist | 33 Airpac Rentals, Aberdeen