forddrive
05 Jun 2018
VP Ultra dependable this one. A core holding for us.
r21442
05 Apr 2018
A tip of the week in tomorrow's IC IC Tip: Buy at 860pTip styleGROWTHRisk ratingMEDIUMTimescaleLONG TERMBull pointsShare rating low relative to peersBrandon Hire acquisition approvedOverseas operation doing wellBear pointsDebt at high levelsCompetitive marketTom DinesEquipment hire group Vp (VP.) has made a name for itself as a solid performer focusing on specialised tools. It confounded investor expectations in the wake of the Brexit referendum and, towards the end of last year, announced the acquisition of Brandon Hire. The deal was big by the group’s standards and marked a move into more generalised tool hire. However, late last year the Competition and Markets Authority said it would investigate the merger, bashing the share price, which had topped £9 immediately before the competition regulator's announcement. Now, though, the regulator has cleared the deal, offering investors a second bite of the apple before the share price recovers.The acquisition – which has been funded by debt – complements Vp’s current portfolio well, expanding its network of hire stations from 58 to more than 200 with limited overlap in terms of location and customers. Vp paid £41.6m cash and took on debt of £27.2m, pushing overall net debt close to 100 per cent of net assets. Brandon Hire is focused on the tool-hire sector, providing primarily for local and regional small-to-medium-sized enterprises. This fits management's plan to buy its way into new niches in the tool hire market. In April last year Vp acquired Jackson Mechanical Services and Zenith Survey Equipment, specialists in electrical and surveying equipment, respectively. At the time of the first-half results in November, management said both had been integrated and were making a positive contribution.The group provides a wide range of services, from forklifts and tracked-access platforms to tool hire and compressed air. It generates most of its revenues from the UK where business has been good. At the last update, adjusted operating profit for the UK was up 14 per cent to £22.2m, with management noting that infrastructure investment, residential activity and general construction had all played their part. Growth in the UK has been broad based for some time now, but management singled out the Hire Station business as a particularly strong performer in 2016-17. Given the massive scale boost it will receive from Brandon Hire, we see this continuing.The international business is also strong, despite accounting for just 12 per cent of revenues in the half year to September 2017. The division grew sales 15 per cent, although it has been held back by delays to contracts at Airpac Bukom, the compressed air and steam generation business.Vp has performed well in competitive markets since the results of the EU referendum were announced; better, in fact, than peers HSS Hire (HSS) and Speedy Hire (SDY). Given that, it's anomalous that its shares are rated lower than its peer group at 11 times earnings for the year just ended. With the Brandon Hire deal no longer in danger, we see potential upside. Buy.
forddrive
04 Dec 2017
VP I am surprised that the Brandon Hire acquisition is being referred to the CMA. However I expect that the worst that can happen is that they will have to dispose of some branches. Hardly reason to sell. We hold.
Boring Bernie
21 Nov 2017
Re: Cheap ValueManRunnng your winners isn't bad advice, but I generally sell a % ( 25 to 40 ) when I think either a share's looking more than fully valued or just have some concerns about the short to medium term future. It quite often stops me maximising my return, but it can also stop me losing out by being too greedy !At the moment, VP still looks cheap on fundamentals, so I wouldn't reduce for that reason, but the Brexit situation may come back to bite us in the medium term ... not necessarily because a hard Brexit would be awful for us, but the perception might be that it could be, so I'll likely be minded to sell a few at some point !
valuemanbuyer
21 Nov 2017
Re: Cheap I made that mistake last year ...at £7. -run your winners !
Boring Bernie
21 Nov 2017
Re: Cheap Agree with you on Brexit playing on peoples minds with companies like VP.They're a cracking company and just seem to keep on delivering.There may come a point, probably some time in the next year or two, that it may he sensible to bank some profits here, but, for the moment at least, they're a very solid hold for m
forddrive
21 Nov 2017
Vp I have always been a fan here - these people know what they are doing.
valuemanbuyer
21 Nov 2017
Cheap Earnings are expected to grow 15% to 77.4p (67.4p) this year and 20% to 92.7p next year yet the shares trade on only 11x this year and 9x next . Brexit investor aversion is affecting many UK focussed stocks and thus provides a great opportunity here . N+1 target price £10.50 .
blackrose
21 Nov 2017
Re: VP I think there will be a queue of would be investors as long as your arm keen to get hold of shares particularly after H1 results
blackrose
21 Nov 2017
Interim results Profits up 13% with revenues up 11% - improvements forecast in H2 in Oil and Gas business. Dividend up 13% - solid again and set for further growth with the two recent acquisitions of Brandon Hire and First National adding some £80m to annual group turnover.
forddrive
09 Nov 2017
VP We have a large shareholding (for us!) Can you offer a view on the liquidity if we ever need to sell? Thank you.
valuemanbuyer
09 Nov 2017
Too cheap I calculate Brandon will add C. 10p tovesrnings for next year so that makes C.88p so we’re trading on less than 10x for a company growing at double- digit rates with good returns , excellent management and a large , no-diluting family shareholding . Methinks it will re-rate at some point .
forddrive
08 Nov 2017
VP Looks like a bold move - but I am confident that they know their business. A good fit and a reasonable price.
blackrose
08 Nov 2017
RNS Wow! a very pleasant RNS to wake up to
r21442
26 Jul 2017
MoneyObserver piece [link] VP (VP)Equipment rental specialist Vp achieved record levels of revenue and profit in 2017, a feat it regularly repeats.Just one of its stable of plant hire firms performed poorly in the year; Airpac Bukom supplies compressed air and steam generation equipment to the global oil and gas industry, which is in recession.Vp’s other businesses, which supply construction, transport, utility and industrial firms, all grew. They were aided by the acquisition of TR, which rents out electronic equipment such as satellite phones, walkie-talkies, test and measurement equipment, and audio-visual kit in Australia, New Zealand and Malaysia. Like most of Vp’s businesses, TR is a specialist.Vp’s know-how enables it to differentiate itself from competitors by supplying unique products, and services such as training and health and safety inspections. Owning diverse specialist hire firms may explain Vp’s uncanny stability over the last 10 years. Despite the financial crisis of 2008, return on capital fluctuated between 9 and 12 per cent as the company doubled revenue and more than doubled profit.The acquisition of TR diversifies Vp geographically too, lifting the international contribution to revenue from just under 7 per cent to more than 10 per cent.Although Vp has invested heavily in new equipment and acquisitions to grow, it hasn’t had to borrow excessively to do it. Vp’s level of gearing – the ratio of debt and other financial liabilities to the capital used by the business – has, like profitability, remained remarkably steady.A share price of 890p values the enterprise at £625 million, about 19 times adjusted profit. It seems like a high price to pay for a hire firm, but perhaps it’s the price of quality.
