VP plc · LSE:VP.
VP — H1 2016 Earnings Presentation
32 slides from VP's earnings presentation, November 2015
Slide 1: Interim Results for the period ended 30 September 2015
Vp plc Interim Results for the period ended 30 September 2015 The TheEquipment Rental Specialists Equipment Rental Specialists 1
Slide 2: Agenda
AGENDA Results Operational Review Financial Review The Equipment Rental Specialists 2
Slide 3: Our strategy
Our strategy ● Aim - to generate sustainable value creation for shareholders ● How - utilising our expertise in asset management - exceeding customer expectations - maintaining and utilising our financial strength - retaining and attracting the best people ● Where - serving diverse markets in the UK
Slide 4: Results
Results The TheEquipment EquipmentRentalRental Specialists Specialists 4
Slide 5: Results summary
Results summary H1 H1 2016 2015 Profit before tax and amortisation £17.2m £16.2m +6% Revenue £105.1m £101.3m +4% Earnings per share pre amortisation 35.14p 32.81p +7% Interim dividend per share 5.35p 5.00p +7% Return on average capital employed 16.1% 14.9% The Equipment Rental Specialists 5
Slide 6: Highlights
Highlights ● Further positive progress - 6% growth in interim profits ● Operating margin increase to 17.3% ● Return on average capital employed improved to 16.1% ● Fleet investment at similar levels to prior year ● Weaker oil and gas and transmission markets ● Infrastructure and housebuild markets d
Slide 7: Revenue and profit profile
Revenue and profit profile Revenue Profit before tax and amortisation (£m) (£m) * * *N+1 Singer estimate *N+1 Singer estimate Revenues growing Progressive profit trend The Equipment Rental Specialists 7
Slide 8: Operational Review
Operational Review The Equipment Rental Specialists 8
Slide 9: Markets
Markets Revenue H1 H1 Growth/ Oil & Market 2016 2015 decline on Gas Segment £m £m prior year Rail Infrastructure* 46.8 44.6 +5% Transmission/Water House 28.8 Election ? Construction 27.6 +4% building Infrastructure Oil & Gas 10.2 12.2 -17% Oil price Housebuilding 13.3 10.2 +30% Market share Construc
Slide 10: Business performance
Business performance Revenues H1 PBITA H1 2016 2015 2016 2015 £m £m £m £m 9.8 9.1 2.9 2.3 Market share growth, housebuild 24.5 22.6 5.6 5.0 Major projects and construction 8.5 11.2 1.0 1.7 Oil & Gas price 39.2 36.1 6.1 4.8 Excellent performance in stable markets 15.7 13.0 1.7 1.3 CP5 / full year of
Slide 11: Fleet investment supporting growth
Fleet investment supporting growth H1 H1 2016 2015 £m £m 7.4 5.2 High utilisation, sustained demand 3.6 3.0 Replacement capex 0.4 3.9 Reduced demand 8.4 8.8 Supporting growth 1.7 2.4 Replacement capex 1.9 0.6 Fleet renewal Total fleet capex 23.4 23.9 Disposal proceeds (9.2) (5.8) Fleet renewal dispo
Slide 12: Operational outlook
Operational outlook ● Signs of confidence returning to construction market ● AMP6 not started, but anticipate into 2016 ● Transmission - expect improved 2016 ● Acquisition bedding in ● Quality of returns remains a key focus The Equipment Rental Specialists 12
Slide 13: Financial review
Financial review The Equipment Rental Specialists 13
Slide 14: Financial highlights – continuing progress
Financial highlights – continuing progress H1 H1 Full Year 2016 2015 2015 Revenue £105.1m £101.3m +4% £205.6m EBITDA £31.4m £29.2m +8% £53.8m Profit before tax and amortisation £17.2m £16.2m +6% £26.8m Net margin 16.4% 16.0% 13.0% ROACE 16.1% 14.9% 16.2% The Equipment Rental Specialists 14
Slide 15: Earnings per share – 7% increase
Earnings per share – 7% increase H1 H1 2016 2015 Basic EPS (pre amortisation) 35.14p 32.81p +7% Profit for period pre tax and amortisation £17.2m £16.2m +6% Weighted average number shares 38.9m 39.0m Tax rate 20.5% 21.2% The Equipment Rental Specialists 15
Slide 16: Dividend per share – 7% increase
Dividend per share – 7% increase H1 H1 FY 2016 2015 2015 Basic EPS 33.37p 31.36p +6% 51.03p Dividend per share 5.35p 5.00p +7% 16.5p Dividend cover 6.2x 6.3x 3.1x Dividend per share (pence) 16.5 Interim Dividend Full Year Dividend The Equipment Rental Specialists 16
Slide 17: Robust ROACE
Robust ROACE Average Capital Employed £m ROACE Average Capital ROACE Employed £m The Equipment Rental Specialists 17
Slide 18: Strong balance sheet
Strong balance sheet H1 FY H1 2016 2015 2015 £m £m £m Rental equipment (fleet) 137.2 131.6 123.5 Other property, plant and equipment 18.7 16.2 12.3 Goodwill and intangibles 42.5 43.4 44.4 Net working capital 0.9 (9.3) (1.7) Deferred tax/pension (3.1) (3.3) (3.2) Net debt (81.8) (66.8) (65.4) Net ass
Slide 19: Financial performance - strong cash generation
Financial performance - strong cash generation 17 Cash inflows EBITDA : £31.4m Cash outflows Working Tax / Dividends Other Net capex £20.6m Capital Interest £4.5m £10.9m £6.7m £3.7m Increase in net debt £15.0m The Equipment Rental Specialists 19
Slide 20: Bank facilities
Bank facilities 17 H1 May 2016 2015 £m £m Committed facilities Due to expire Oct '17 30 30 Due to expire Oct '17 20 20 Due to expire May '20 45 45 Overdraft facilities 5 5 Total facilities 100 100 Step up facility 20 20 30 Sep 31 Mar 2015 2015 £m £m Net debt 81.8 66.8 Headroom 18.2 33.2 The Equipmen
Slide 21: Headroom for growth
Headroom for growth 17 Greater than 3 times EBITA Interest Cover Lower interest costs higher EBITA Less than 2.5 times Net Debt / EBITDA Considerable headroom The Equipment Rental Specialists 21
Slide 22: Supplementary schedules
Supplementary schedules The Equipment Rental Specialists 22
Slide 23: Cash flow
Cash flow H1 H1 FY 17 2016 2015 2015 £m £m £m Operating profits 17.3 16.4 27.1 Depreciation / Amortisation 14.1 12.8 26.7 EBITDA 31.4 29.2 53.8 Changes in working capital (6.7) (3.0) 2.5 Gross capex (29.8) (24.3) (52.9) Asset disposal profit (3.1) (2.1) (3.3) Proceeds from disposals 9.2 5.7 12.0 Acq
Slide 24: Effective rate of tax
Effective rate of tax 17 H1 H1 2016 2015 % % Standard rate 20.0 21.0 Impact of tax rate change on deferred tax - - Permanent disallowables 0.3 0.4 Chattels (0.9) (0.7) Prior year adjustments - - Non qualifying depreciation 0.4 0.5 Overseas tax 0.7 - Effective rate 20.5 21.2 The Equipment Rental Spec
Slide 25: Net working capital
Net working capital 17 H1 FY H1 Cashflow Movement 2016 2015 2015 FY 2015 £m £M £m H1 2016 Inventories 5.0 6.5 5.7 1.5 Trade debtors 35.6 36.2 36.5 0.6 Prepayments and other debtors 8.4 4.9 7.9 (3.5) Trade creditors (16.8) (17.7) (14.9) (0.9) Accruals, other creditors and tax (31.3) (39.2) (36.9) (7.
Slide 26: Group history – 1954 to date
Group history – 1954 to date 2002-2004 2011 Shoring expansion Mainland Europe - through acquisition Groundforce of Mechplant, Trenchshore & 2006 Eve Shorco Acquisition of Bukom Oilfield Services (Airpac Bukom formed) 2001 1954 Hire Station formed Vibratory Roller & Plant Hire through merger of (Nort
Slide 27: UK Forks: national telehandler hire
National hire of telescopic handlers/rough terrain forklifts: • Only UK national telehandler specialist • Fleet of c.1700 machines • Strategically located distribution network Markets: • General construction, housebuild and industry Opportunities: • Housebuilding, construction recovery, new products
Slide 28: Groundforce: shoring and excavation support
UK market leaders in the rental and sale of shoring products and solutions: • Groundforce has the largest excavation support fleet in the UK and Ireland • Plus, specialist products and services ° Piletec & Mr Cropper – piling equipment ° Stopper Specialists – pipeline pressure testing ° ‘U’ Mole – t
Slide 29: Airpac Bukom: international compressor and steam rental
International rental of high pressure air compressors, steam generators and specialist equipment supported by skilled engineers: • Global network of six service and distribution facilities located in the UK (Aberdeen and Great Yarmouth), Singapore, Australia, Middle East and Latin America • Rental a
Slide 30: Tool hire and specialist equipment
Tool hire and specialist equipment for construction and industry: • Local tool hire branches supported by national call centre • Plus specialist products and services ° ESS Safeforce – safety equipment and confined space training ° MEP – press fitting, electrofusion and low level access Markets: • C
Slide 31: Railway light plant and trackside services
Provision of rail specific light plant, trackside lighting and skilled trackside personnel: • Genuine 24/7 x 365 national support • The widest range of specialist portable rail equipment in the UK • Significant safety and compliance barriers to entry in a regulated market Markets: • Maintenance and
Slide 32: Temporary access solutions
One of Europe’s largest suppliers of temporary access solutions: • Operations in UK, Republic of Ireland and Germany • Skilled installation of bespoke roadways and walkways Markets: • Transmission, construction, rail and outdoor events Opportunities: • Regulated transmission programme, new products