Vp Regulatory News (VP.)

4 Dec 2006 07:02

Vp PLC04 December 2006 Press Release 4 December 2006 Vp plc ("Vp" or "the Group") Interim Results Vp plc, the equipment rental specialist, today announces its interim results forthe six months ended 30 September 2006. Highlights • Revenues up by 29% to £61.3 million (2005: £47.4 million) • Operating profits grew 56% to £8.77 million (2005: £5.62 million) • Profit before tax up 42% to £7.80 million (2005: £5.49million) • Interim dividend of 2.25 pence per share, an increase of 15% (2005: 1.95 pence) • Net debt of £34.7 million (31 March 2006: £32.6 million), representing modest gearing of 57% Jeremy Pilkington, Chairman of Vp plc, commented: "These excellent interim results endorse our growth plan for the Group andmaintain our record of consistent performance. Organic capital investment hasbeen strong across all areas of our business, but in particular the resultsreflect the successful integration and further development of last year'sacquisitions and the continuing recovery in profitability at Hire Station. Over30% of the profit increase in the period came from organic growth. "Overall the markets we serve are in good health with strong growth prospectsover the short to medium term and we enjoy the human and financial resources totake advantage of expansion opportunities as they arise. Our strategy remainsto lead in our chosen markets." For further information please contact: Vp plc Jeremy Pilkington, Chairman Tel: +44 (0) 1423 533 405jeremypilkington@vpplc.com Neil Stothard, Group Managing Director Tel: +44 (0) 1423 533 445neil.stothard@vpplc.com Mike Holt, Group Finance Director Tel: +44 (0) 1423 533 445mike.holt@vpplc.com Abchurch Justin Heath / Louise Thornhill Tel: +44 (0) 20 7398 7700justin.heath@abchurch-group.com www.abchurch-group.com CHAIRMAN'S STATEMENT I am very pleased to report an excellent set of results for the Group for thesix month period to 30 September 2006. Operating profits grew 56% to £8.77 million (2005 : £5.62 million) on revenuesahead by 29% to £61.3 million (2005 : £47.4 million). These results build onour achievement of compound annual earnings growth in excess of 14% over theprevious four years. In recognition of this progress, your Board is declaringan interim dividend of 2.25 pence per share, an increase of 15%. The dividendis payable on 11 January 2007 to shareholders registered as of 15 December 2006. Net debt at 30 September 2006 stood at £34.7 million (31 March 2006: £32.6million), representing modest gearing of 57%. Business Review These excellent interim results endorse our growth plan for the Group andmaintain our record of consistent performance. Organic capital investment hasbeen strong across all areas of our business, but in particular the resultsreflect the successful integration and further development of last year'sacquisitions and the continuing recovery in profitability at Hire Station. Over30% of the profit increase in the period came from organic growth. Considering individual markets, the first six months has seen very buoyant oiland gas activity but, not altogether unsurprisingly, continued delays in theimplementation of the AMP4 water industry capital investment programme in theUK. The construction and housebuilding sectors have remained stable in theperiod. The acquisition of TPA last November gives us new exposure to the powertransmission and events sectors. Activity within TPA's key summer events marketproduces a significant seasonality in TPA's earnings and to a lesser extent, theGroup results. Groundforce produced a very satisfactory first half performance. The evolutionof new products and capabilities continues, including the recent introduction ofa new 250 tonne strutting system and the expansion into concrete formwork. TheDudley Vale business, acquired last year, has integrated well and has performedin line with expectations. As anticipated, UK Forks did not repeat last year's strong first halfperformance. The reduced activity levels seen in the final quarter of last yearremained both in the housebuilding and general construction sectors. The marketfor UK Forks is stable and we continue to see opportunities for the businessgoing forward. Airpac Bukom delivered significant growth in the period, benefiting from thefirst full six month contribution from the acquisition of Bukom OilfieldServices in March 2006. Airpac Bukom is now a leading supplier of itsspecialist services to the oil and gas exploration and development industry.Whilst oil prices have fallen back from their recent highs we are confident inthe future strength of this market as it seeks to meet rapidly expanding globaldemand, particularly from the developing economies. The merged business hasprogressed well and significant capital investment is planned as we embrace thebroadened geographical and product opportunities that our customer base offersto us. Hire Station delivered further substantial improvement in profits and margins.Both the tool hire business and safety equipment business, ESS Safeforce,performed well. During the period we sold the non-core Pivotal Performancebusiness, a provider of management development training, contained within theESS acquisition made last year, to management. Since the period end, HireStation has acquired, for a cash consideration of £3.3 million, MEP HireLimited, a Scottish based company specialising in the rental and sale of pipefitting equipment. We believe MEP's product range and expertise will fit wellalongside Hire Station's existing activities. Torrent Trackside had a very satisfactory first half performance havingresponded successfully to the challenges presented by the changes within therail industry. Further growth opportunities have been developed, including anincreasing demand from London Underground based work. TPA, acquired in November 2005, had a strong first half. TPA's earnings are, asexpected, significantly skewed by their Summer events programme althoughconstruction related activities, particularly transmission work, will continuethroughout the winter period. Outlook This period sees the first results of the Group's significant progress instrengthening and extending its portfolio of business activities through amixture of strong organic investment and selective acquisition activity. Overall the markets we serve are in good health with strong growth prospectsover the short to medium term and we enjoy the human and financial resources totake advantage of opportunities as they arise. Our strategy remains to lead inour chosen markets. The Group is well positioned to deliver a satisfactory result for the year as awhole. Jeremy PilkingtonChairman4 December 2006 Consolidated Income Statement As at 30 September 2006 Note Six months to 30 Six months to 30 Full year to Sep 2006 Sep 2005 31 Mar 2006 (unaudited) (unaudited) £000 £000 £000 Revenue 3 61,263 47,387 99,396 Cost of sales (42,159) (34,258) (72,092) Gross profit 19,104 13,129 27,304 Administrative expenses (10,333) (7,509) (15,842) Operating profit before financing costs 3 8,771 5,620 11,462 Financial income 58 115 188 Financial expenses (1,034) (249) (978) Profit before tax 7,795 5,486 10,672 Income tax expense 4 (2,339) (1,589) (3,070)Profit for the period attributable to equityholders of the parent 5,456 3,897 7,602 Earnings per 5p ordinary share 6 12.71p 8.96 p 17.49 p Diluted earnings per 5p ordinary share 6 12.16p 8.66 p 16.83 p Dividend per share 7 2.25p 1.95 p 6.60p Dividends paid and proposed (£000) 954 846 2,824 Consolidated Statement of Recognised Income and Expense As at 30 September 2006 Six months to Six months to Full year to 30 Sep 2006 30 Sep 2005 31 Mar 2006 (unaudited) (unaudited) £000 £000 £000 Tax on items taken direct to equity - (66) (67) Actuarial gains on defined benefit pension - - 231scheme Effective portion of changes in fair value ofcash flow hedges 130 - (89) Net income / (expense) recognised directly to 130 (66) 75equity Profit for the period 5,456 3,897 7,602 Total recognised income and expense for the 5,586 3,831 7,677period Consolidated Balance Sheet As at 30 September 2006 Note 30 Sep 2006 31 Mar 2006 30 Sep 2005 (unaudited) (unaudited) £000 £000 £000 Non-current assets Property, plant and equipment 69,584 66,054 51,285Intangible assets 33,848 33,637 9,845Total non-current assets 103,432 99,691 61,130 Current assets Inventories 3,372 3,119 2,580Income tax receivable - 34 34Trade and other receivables 30,034 28,177 26,226Cash and cash equivalents 4,988 5,587 2,395Assets classified as held for resale 217 - -Total current assets 38,611 36,917 31,235 Total assets 142,043 136,608 92,365 Current liabilities Interest bearing loans and borrowings (3,073) (2,148) (37)Income tax payable (2,213) (1,235) (1,876)Trade and other payables (23,702) (21,793) (19,126)Total current liabilities (28,988) (25,176) (21,039) Non-current liabilities Interest bearing loans and borrowings (36,616) (36,062) (8,051)Employee benefits (2,734) (2,894) (3,744)Other payables (7,930) (7,930) -Deferred tax liabilities (4,734) (4,223) (2,854)Total non-current liabilities (52,014) (51,109) (14,649) Total liabilities (81,002) (76,285) (35,688) Net assets 61,041 60,323 56,677 Equity Issued capital 2,309 2,309 2,309Share premium 16,192 16,192 16,192Hedging reserve 41 (89) -Retained earnings 42,472 41,884 38,149Total equity attributable to equity 61,014 60,296 56,650 holders of parent Minority interest 27 27 27 Total equity 5 61,041 60,323 56,677 Consolidated cash flow statement As at 30 September 2006 Note Six months to Six months to Full year to 30 Sep 2006 30 Sep 2005 31 Mar 2006 (unaudited) (unaudited) £000 £000 £000 Cash generated from operations 8 14,681 9,741 22,610 Interest paid (522) (226) (710)Interest element of finance lease rental (91) (5) (111)paymentsInterest received 58 115 188Income tax paid (894) (1,426) (3,120)Net cash from operating activities 13,232 8,199 18,857 Cash flows from investing activities Purchase of property, plant and equipment (15,052) (8,321) (15,506)Proceeds from sale of plant and equipment 3,267 2,687 6,181Acquisitions net of cash acquired (91) (4,647) (28,955)Net cash used in investing activities (11,876) (10,281) (38,280) Cash flows from financing activities (Repurchase) / sale of own shares (3,434) (1,123) (1,073)Repayment of borrowings - - (8,000)Repayment of loan notes (941) (125) (125)New loans 3,000 - 33,500Payment of finance lease liabilities (580) (30) (2,475)Dividends paid - - (2,572)Net cash used in financing activities (1,955) (1,278) 19,255 Net decrease in cash and cash equivalents (599) (3,360) (168)Cash and cash equivalents at beginning of 5,587 5,755 5,755periodCash and cash equivalents at end of period 4,988 2,395 5,587 Notes to the Interim Financial Statements 1. Basis of Preparation Vp plc (the "Company") is a company domiciled in the United Kingdom. TheConsolidated Interim Financial Statements of the Company for the half year ended30 September 2006 comprise the Company and its subsidiaries (together referredto as the "Group"). The Consolidated Interim Financial statements do not include all the informationrequired for full annual Financial Statements. 2. Accounting Policies Vp's accounting policies have been applied consistently to all periods presentedand are in line with those applied in the annual financial statements for theyear ended 31 March 2006. The preparation of financial statements in conformity with IFRS requiresmanagement to make judgements, estimates and assumptions that affect theapplication of policies and reported amounts of assets and liabilities, incomeand expenses. The estimates and associated assumptions are based on historicalexperience and various other factors that are believed to be reasonable underthe circumstances, the results of which form the basis of making the judgementsabout carrying values of assets and liabilities that are not readily apparentfrom other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.Revisions to accounting estimates are recognised in the period in which theestimate is revised if the revision affects only that period, or in the periodof the revision and future periods if the revision affects both current andfuture periods. 3. Summarised Segmental Analysis (unaudited) Revenue Operating Profit Sept 2006 Sept 2005 Inter- Inter- 2006 2005 External Segment Total External Segment Total Revenue Revenue Revenue Revenue Revenue Revenue £000 £000 £000 £000 £000 £000 £000 £000 Groundforce 13,010 - 13,010 11,547 - 11,547 2,752 2,554UK Forks 6,930 180 7,110 7,498 150 7,648 667 1,295Airpac Bukom 4,998 - 4,998 2,249 - 2,249 1,248 507Hire Station 22,121 150 22,271 19,943 130 20,073 1,353 490Torrent 6,566 - 6,566 6,150 - 6,150 910 774TracksideTrax Portable 7,638 - 7,638 - - - 1,841 -Access 61,263 330 61,593 47,387 280 47,667 8,771 5,620 4. Income Tax Income tax on profit before tax is based on an effective tax rate of 30% toreflect the estimated tax charge for the full year. 5. Statement of Changes in Equity Six months to Six months to Full year to 30 Sep 2006 30 Sep 2005 31 Mar 2006 (unaudited) (unaudited) £000 £000 £000 Total recognised income and expense for the 5,586 3,831 7,677period Tax movements to equity - 50 489 Share option charge in the period 497 162 292 Gains on disposal of shares 47 67 80 Net movement in shares held by Vp Employee (3,434) (1,123) (1,073)Trust at cost Dividends to shareholders (1,978) (1,740) (2,572) Change in equity during the period 718 1,247 4,893 Equity at the start of the period 60,323 55,430 55,430 Equity at the end of the period 61,041 56,677 60,323 6. Earnings Per Share Earnings per share have been calculated on 42,934,732 shares (2005: 43,502,560)being the weighted average number of shares in issue during the period. Dilutedearnings per share have been calculated on 44,869,566 shares (2005: 44,995,224). 7. Dividends The Directors have declared an interim dividend of 2.25 pence (2005: 1.95 pence)per share payable on 11 January 2007 to shareholders on the register at 15December 2006. The cost of dividends in the Statement of Changes in Equity isafter adjustments for the interim and final dividends waived by the Vp EmployeeTrust in relation to the shares it holds for the Group's share option schemes. 8. Reconciliation of profit before tax to net cash generated fromoperations Six months to Six months to Full year to 30 Sep 2006 30 Sep 2005 31 Mar 2006 (unaudited) (unaudited) £000 £000 £000Cash flows from operating activities Profit before tax 7,795 5,486 10,672Pension fund contribution in excess of servicecost (160) (224) (791)Share based payment charges 497 162 292Depreciation 6,899 5,655 12,224Amortisation of intangibles 12 - 4Profit on sale of tangible fixed assets (1,131) (1,010) (2,275)Interest expense 976 134 790Increase in inventories (253) (204) (559)Increase in trade and other receivables (1,662) (2,183) (579)Increase in trade and other payables 1,708 1,925 2,832Cash generated from operations 14,681 9,741 22,610 9. Analysis of Net Debt (unaudited) As at Cash As at 1 Apr 06 Flow 30 Sep 06 £000 £000 £000Cash in hand and at bank 5,587 (599) 4,988Medium term loan (33,500) (3,000) (36,500)Loan notes (1,011) 941 (70)Finance leases and hire purchases (3,699) 580 (3,119) (32,623) (2,078) (34,701) Comparative Figures The comparative figures for the financial year ended 31 March 2006 are extractedfrom the company's statutory accounts for that financial year. Those accountshave been reported on by the company's auditors and delivered to the Registrarof Companies. The report of the auditors was (i) unqualified, (ii) did notinclude a reference to any matters to which the auditors drew attention by wayof emphasis without qualifying their report, and (iii) did not contain astatement under section 237(2) or (3) of the Companies Act 1985. Independent review report to Vp plc Introduction We have been instructed by the Company to review the financial information forthe six months ended 30 September 2006 which comprises the unauditedConsolidated Income Statement, the unaudited Consolidated Statement ofRecognised Income and Expense, the unaudited Consolidated Balance Sheet, theunaudited Consolidated Cash Flow Statement and the related notes. We have readthe other information contained in the interim report and considered whether itcontains any apparent misstatements or material inconsistencies with thefinancial information. This report is made solely to the Company in accordance with the terms of ourengagement to assist the Company in meeting the requirements of the ListingRules of the Financial Services Authority. Our review has been undertaken sothat we might state to the company those matters we are required to state to itin this report and for no other purpose. To the fullest extent permitted by law,we do not accept or assume responsibility to anyone other than the company forour review work, for this report, or for the conclusions we have reached. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures should be consistentwith those applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4: Review of interim financial information issued by the Auditing PracticesBoard for use in the UK. A review consists principally of making enquiries ofgroup management and applying analytical procedures to the financial informationand underlying financial data and, based thereon, assessing whether theaccounting policies and presentation have been consistently applied unlessotherwise disclosed. A review excludes audit procedures such as tests ofcontrols and verification of assets, liabilities and transactions. It issubstantially less in scope than an audit performed in accordance withInternational Standards on Auditing (UK and Ireland) and therefore provides alower level of assurance than an audit. Accordingly, we do not express an auditopinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 September 2006. KPMG Audit PlcChartered Accountants Leeds4 December 2006 This information is provided by RNS The company news service from the London Stock Exchange