Slide 1: Interim results for the period ended 30 September 2024
Interim results for the period ended 30 September 2024 26 November 2024 Anna Bielby, Chief Executive Keith Winstanley, Chief Financial Officer Leader in equipment rental
Slide 2: Vp Group – a leader in equipment rental
Vp Group – a leader in equipment rental Expert provider of equipment, people, services and support for specialist projects Focussed on niche sectors, principally in Infrastructure, Construction, Housebuilding and Energy £267.2m Net book value of property, plant and equipment Resilient operating mode
Slide 3: Robust H1 performance
Robust H1 performance Robust financial performance Differing conditions across end markets • Revenue of £192.5m and Adjusted Profit of £21m • Strong Infrastructure demand from Water and Transmission, offsetting a slower start to CP7 in Rail • Strong ROACE at 14.7%*, demonstrating earnings quality •
Slide 4: Compelling investment case
Compelling investment case Key differentiators Financial profile Specialist rental model Continued strong returns Underpinned by our strategy • Specialist assets, markets and delivery • Target ROACE of 15% • Market leading positions in niche sectors • Strong margins • Young, well-maintained fleet •
Slide 5: Strategy update
Strategy update Leader in equipment rental
Slide 6: Good strategic progress in H1
Good strategic progress in H1 Making Vp more straightforward and greater than the sum of its parts . Delivering growth Driving operational excellence People Digital roadmap ESG focus ESG focus H1 Progress: Divisional collaboration End market focus Growth through M&A Refreshed op model The right team
Slide 7: Evolving our operating model to maximise opportunities
Evolving our operating model to maximise opportunities Infrastructure Construction Housebuilding Energy Focus on diverse end markets Rail Water Transmission Other General Specialist Simple access to all Groupwide approach to major End sector Rehire offering of Vp customers specialism Torrent Tracksi
Slide 8: Financial review
Financial review Keith Winstanley Leader in equipment rental
Slide 9: Robust financial performance
Robust financial performance H1 25 (£m) H1 24 (£m) FY24 (£m) • Robust performance despite end market Revenue 192.5 190.9 368.7 headwinds but strong support from Adjusted EBITDA 47.0 47.7 91.2 Infrastructure markets Depreciation (incl. software • Margin % includes impact of investment in (22.9) (22.9
Slide 10: Balance sheet positions us well
Balance sheet positions us well H1 25 (£m) FY24 (£m) H1 24 (£m) Hire fleet 236.4 226.0 219.7 • Strong balance sheet positions the Group well for the future Other fixed assets 30.8 30.9 31.2 Intangible assets 26.9 28.6 57.0 • Increased investment in fleet - £38.5m IFRS16 net liabilities (3.0) (3.3) (
Slide 11: Strong operating cash flows and disciplined capital allocation
Strong operating cash flows and disciplined capital allocation • H1 net debt of £140.4m • Strong operating cash flows • Continued investment in asset base • Working capital outflow expected to partially unwind in H2 • Debt continues to be well managed with disciplined capital allocation policy Exclu
Slide 12: Comfortably operating within stated leverage target
Comfortably operating within stated leverage target H1 25 (£m) H1 24 (£m) FY24 (£m) • c2/3 of net debt relates to low cost, Private placement - Jan 2027 65.0 65.0 65.0 fixed rate private placements Private placement - Apr 2028 28.0 28.0 28.0 • Facilities and headroom provide RCF - matures Nov 2027*
Slide 13: Investment in hire fleet focussed on market opportunity
Investment in hire fleet focussed on market opportunity H1 25 (£m) H1 24 (£m) FY24 (£m) • Young, well maintained fleet with Total fleet investment 38.5 27.7 62.8 increased investment Disposal proceeds (11.6) (12.8) (25.3) • Organic growth is a key part of Net expenditure on fleet 26.9 14.9 37.5 stra
Slide 14: Consistent return on capital and uninterrupted dividends
Consistent return on capital and uninterrupted dividends Historic ROACE 16.0% 14.5% 14.5% 14.5% 14.5% 14.7% 14.4% 14.0% • Consistent strong returns and 12.0% WACC progressive dividend contribute 10.0% 9.2% to compelling investment case 8.0% 6.0% • ROACE just below 15% target 4.0% and well above WACC
Slide 15: M&A – Driving growth and rebalancing the Group
M&A – Driving growth and rebalancing the Group Targeted acquisitions Selective divestment • Specialist with growth potential • Inadequate returns • Provides access or extension to geography, assets or sector • Limited growth potential • Meets strict financial hurdles, value accretive • Non-alignment
Slide 16: Operational review
Operational review Leader in equipment rental
Slide 17: Infrastructure
Infrastructure Infrastructure Market opportunity What we do H1 performance Rail Rail Our Infrastructure revenue increased 3% • CP7 (2024-2029) commitment of • Major projects compared with H1 2024: £45bn* • Track renewals and maintenance Revenue £74m • Slower H1 in Rail due to the change • Rapid rail
Slide 18: Infrastructure case study – Rail track enhancement
Infrastructure case study – Rail track enhancement Groupwide Vp Rail solution, leveraging divisional specialisms Multi-million pound track enhancement project All plant requirements for the track renewal phase of project • Rail plant and tools • Site lighting • Survey and environmental monitoring •
Slide 19: Infrastructure case study – Water treatment works upgrade
Infrastructure case study – Water treatment works upgrade £8 million Scottish Water upgrade by joint venture contractor ESD with Groundforce Upgrade to provide resilience and function of the plant and ensuring Customers continuous supply of fresh drinking water for the city of Aberdeen Temporary wor
Slide 20: Construction
Construction Construction Market opportunity What we do H1 performance • Total UK Construction output to General Construction • General Construction affected by contract by 1% in 2024* • Small plant, tools and equipment challenging market conditions (decline • Refurbishments and retrofits will • Bro
Slide 21: Specialist Construction case study – Overbury Canary Wharf
Specialist Construction case study – Overbury Canary Wharf One of Europe's largest re-fit projects • c.1,000 contracting staff on site • Access challenges – one loading bay, restricted transport access Customers Project commenced December 2022 and ongoing • Quick and convenient access to the safest,
Slide 22: Housebuilding and Energy
Housebuilding and Energy Housebuilding Market opportunity What we do H1 performance • Oil price remains supportive • Revenue increase of 52% compared with • Overall housing construction • Materials handling solutions • Continued headwinds in the period (decline • output expected to The International
Slide 23: Energy case study – Industrial shutdown
Energy case study – Industrial shutdown Major independent petroleum client Group approach: ESS, Brandon Hire Station, Airpac Rentals, UK Forks and MEP Customers On-site facility providing day-to-day operation and maintenance activities, with a one stop shop to keep projects productive and compliant
Slide 24: Summary and outlook
Summary and outlook • Robust first half performance, despite challenges in some of our end markets • Good strategic progress: • Improving divisional collaboration and end sector focus • Refreshing operating model • Progressing M&A strategy • Strong track record of navigating difficult markets • Conf
Slide 25: Q&A
Q&A Leader in equipment rental
Slide 26: Appendices
Appendices Leader in equipment rental
Slide 27: Digital roadmap
Digital roadmap We’ve built strong foundations to create and maintain momentum in delivering our pragmatic digital roadmap 1) Drive simplicity • Established organisation-wide change portfolio co-ordinating shared direction and consistency by • Mobilised team and implemented process toolkit; prioriti
Slide 28: ESG
ESG Refreshed ESG leadership to drive competitive advantage • Focus on customer- and end-market needs for competitive Working with advantage customers and suppliers • Providing robust data to help customers achieve their targets • Supply chain engagement • Consolidation of water and waste contracts,
Slide 29: Medium term environmental roadmap
Medium term environmental roadmap Leader in equipment rental Vp plc | 29
Slide 30: 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 31: 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 32: Our divisions
Our divisions Groundforce MEP Hire A market-leading rental and design provider of excavation support systems and The UK's largest provider of mechanical and electrical press fittings and low-level specialist products to the water, civil engineering and construction industries with access platforms t
Slide 33: Segmental analysis – UK and International
Segmental analysis – UK and International H1 25 (£m) H1 24 (£m) FY24 (£m) • Segments realigned this year following Revenue reorganisation of management of UK 162.7 165.6 318.7 divisions International 29.8 25.3 50.0 • Figure for H1 24 and FY 24 restated Total 192.5 190.9 368.7 Adjusted operating prof
Slide 34: 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 35: Leader in equipment rental
Leader in equipment rental