Presentation
to Carillion
The Equipment Rental Specialists
9th June 2010
The Equipment Rental Specialists
Vp plc
Interim Results
for the six months ended
30 September 2014
● Results Summary
Agenda 1
● Operational Review
● Financial Review
The Equipment Rental Specialists
Results summary 2
The Equipment Rental Specialists
H1 H1
2015 2014
Profit before tax and amortisation £16.2m £12.8m +27%
Revenue £101.3m £91.3m +11%
Earnings per share pre amortisation 32.81p 26.77p +23%
Interim dividend per share 5.00p 3.60p +39%
Return on average capital employed 14.9% 13.9%
Agenda Highlights 3
The Equipment Rental Specialists
● Excellent interim results – 27% profit increase
● Revenue growth – UK and overseas
● Operating margins improved
● Return on average capital employed improved to 14.9%
● Increased fleet investment to support growth opportunities
● Acquisition of rail plant activity from Balfour Beatty Rail in July 2014
● Construction and housebuild markets driving growth
Agenda Revenue and profit trends
Revenue (£m)
Revenues growing
*
4
The Equipment Rental Specialists
69.1 82.7 84.0 91.3
101.3
138.1
161.5 167.0
183.1
200.8
0
20
40
60
80
100
120
140
160
180
200
220
2011 2012 2013 2014 H1 2015
8.6 10.4 11.0
12.8
16.2
13.8
16.0 17.4
20.1
24.3
0
2
4
6
8
10
12
14
16
18
20
22
24
26
2011 2012 2013 2014 H1 2015
Profit before tax and amortisation (£m)
Profit progression
* *
*N+1 Singer estimate
Agenda Operational review 5
The Equipment Rental Specialists
Markets
Market Segments
* Utilities, Rail, Transmission and Facilities Management
6
The Equipment Rental Specialists
Infrastructure
Construction
Other
H1 H1 Growth/
Market 2015 2014 decline
Segment £m £m on prior year
Infrastructure* 44.6 43.9 +2%
Construction 27.6 22.4 +23%
Oil & Gas 12.2 10.0 +22%
Housebuilding 10.2 8.8 +16%
Other 6.7 6.2 +8%
Total 101.3 91.3 +11%
Revenue
Business performance 7
The Equipment Rental Specialists
2015 2014 2015 2014
£m £m £m £m
22.6 20.8 5.0 4.6 Major projects and construction
9.1 8.4 2.3 1.5 Housebuild and construction strong
11.2 9.6 1.7 0.7 LNG recovery
13.0 10.6 1.3 1.5 CP4 to CP5 changeover
9.3 9.8 2.0 2.7 Weaker transmission
36.1 31.9 4.8 2.7 Strong momentum in all markets
TOTAL 101.3 91.3 17.2 13.7
Operating Margin 16.9% 15.0% Strong margin growth
Revenues H1 PBITA H1
Agenda Fleet investment supporting growth 8
The Equipment Rental Specialists
H1 H1
2015 2014
£m £m
3.0 4.6 Timing
5.2 3.8 High utilisation, sustained demand
Airpac Bukom 3.9 1.0 New products
2.4 0.8 Gearing fleet for CP5 programme
TPA 0.6 0.3 Replacement
8.8 7.9 Growth in demand
Total fleet capex 23.9 18.3
Disposal Proceeds (5.8) (4.1)
Net expenditure 18.1 14.2
Agenda Operational outlook 9
The Equipment Rental Specialists
● Business trading well into second half
● Construction and housebuilding markets are key growth drivers
● Infrastructure stable - changeovers in regulatory markets
● Longer term focus on quality of delivery, availability and reliability is
paying off
● Group well positioned to deliver further positive progress
Agenda Financial review 10
The Equipment Rental Specialists
Agenda Financial highlights – continuing progress 11
H1 H1 Full Year
2015 2014 2014
Revenue £101.3m £91.3m +11% £183.1m
EBITDA £29.2m £24.6m +19% £44.3m
Profit before tax and amortisation £16.2m £12.8m +27% £20.1m
Net margin 16.0% 14.0% 11.0%
ROACE 14.9% 13.9% 13.5%
The Equipment Rental Specialists
Earnings per share – 22% increase 12
The Equipment Rental Specialists
H1 H1
2015 2014
Basic EPS 31.36p 25.73p +22%
Profit for period pre tax and amortisation £16.2m £12.8m +27%
Weighted average number shares 39.0m 39.1m
Tax rate 21.2% 18.0%
Agenda
Dividend per share (pence)
Dividend per share – 39% increase 13
H1 H1 FY
2015 2014 2014
Basic EPS 31.36p 25.73p +22% 39.78
Dividend per share 5.00p 3.60p 14.00
Dividend cover 6.3x 7.1x 2.8x
3.1 3.1 3.1 3.25 3.6 5.0
10.8 10.8 11.35 12.25
14.0
0
2
4
6
8
10
12
14
16
2010 2011 2012 2013 2014 H1 2015
Interim Dividend Full Year Dividend
The Equipment Rental Specialists
INCREASE PARTLY ADDRESSES IMBALANCE BETWEEN INTERIM AND FINAL
Ave
rag
e C
ap
ita
l E
mp
loye
d £
m
RO
AC
E
140.2
133.8
142.6
148.5
153.0
161.2
169.4 13.3%
12.3%
13.0% 13.3%
13.9% 13.5%
14.9%
3%
5%
7%
9%
11%
13%
15%
17%
120
130
140
150
160
170
180
Mar 2010 Mar 2011 Mar 2012 Mar 2013 Sep 2013 Mar 2014 Sep 2014
Robust ROACE 14
Average Capital
Employed £mROACE
The Equipment Rental Specialists
Agenda Strong balance sheet 15
The Equipment Rental Specialists
H1 FY H1
2015 2014 2014
£m £m £m
Rental equipment (fleet) 123.5 112.9 106.3
Other assets 56.6 53.2 53.2
Net working capital (1.7) (1.3) 10.6
Deferred tax/pension (3.2) (3.8) (4.5)
Capital employed 175.2 161.0 165.6
Net debt (65.4) (53.0) (56.2)
Net assets 109.8 108.0 109.4
Gearing 60% 49% 51%
Debtor days 59 57 58
Debt write off as % revenue 0.2% 0.6% 0.5%
Financial performance - strong cash generation 16
Cash inflows
Cash outflows
Other
£8.8m
Increase in net debt
£12.4m
Net capex £18.6m
EBITDA : £29.2m
Acquisition
£5.4m
Working
Capital
£3.0m
Tax /
Interest
£1.8m
Dividends
£4.0m
The Equipment Rental Specialists
Agenda Bank facilities 17
The Equipment Rental Specialists
H1 FY
2015 2014
£m £m
Committed facilities
Due to expire May '16 35 35
Due to expire Oct '17 30 30
Due to expire Oct '17 20 -
Overdraft facilities 5 5
Total facilities 90 70
Step up facility
Due to expire Oct '17 5 25
Net debt 65.4 53.0
1.16 1.05 1.10 1.20 1.33
0.00
0.50
1.00
1.50
2.00
2.50
3.00
FY 11 FY 12 FY 13 FY 14 H1 15
6.10 7.30 8.04
12.28
14.24
2
4
6
8
10
12
14
16
18
Mar 11 Mar 12 Mar 13 Mar 14 H1 15
EBITA
Interest
Cover
Net Debt /
EBITDA
Less than 2.5 times
Greater than 3 times
Lower interest costs higher EBITA
Considerable headroom
Headroom for growth 18
The Equipment Rental Specialists
Agenda Supplementary schedules 19
The Equipment Rental Specialists
Agenda Cash flow 20
H1 H1 FY
2015 2014 2014
£m £m £m
Operating profits 16.4 13.2 20.7
Depreciation + Amortisation 12.8 11.4 23.6
EBITDA 29.2 24.6 44.3
Changes in debtors/creditors/stock (3.0) (10.4) 4.4
Gross capex (24.3) (17.2) (39.5)
Asset disposal profit (2.1) (1.3) (2.9)
Proceeds from disposals 5.7 4.1 8.5
Acquisitions (5.4) (4.5) (4.5)
Interest (0.9) (1.0) (1.8)
Tax (0.9) (1.7) (3.9)
Dividends (4.0) (3.5) (5.0)
Other (6.7) - (7.4)
Cash movement (change in net debt) (12.4) (10.9) (7.8)
The Equipment Rental Specialists
Agenda Effective rate of tax 21
The Equipment Rental Specialists
H1 H1
2015 2014
% %
Standard rate 21.0 23.0
Impact of tax rate change on deferred tax - (4.4)
Permanent disallowables 0.4 0.5
Chattels (0.7) (1.3)
Prior year adjustments - (0.4)
Non qualifying depreciation 0.5 0.6
Effective rate 21.2 18.0
Agenda Net working capital 22
The Equipment Rental Specialists
H1 H1
2015 2014
£m £m
Inventories 5.7 5.5
Trade debtors 36.5 35.4
Prepayments and other debtors 7.9 9.7
Trade creditors (14.9) (15.2)
Accruals, other creditors and tax (36.9) (24.8)
Net working capital (1.7) 10.6
Group history – 1954 to date 23
Revenue 1970: £2m 1980: £14m 1990: £70m 2000: £55m 2010: £129m 2013: £167m 2014: £183m
2014 Vp plc
Celebrates its
60th Anniversary
1954Vibratory Roller & Plant Hire
(Northern) Limited founded
1973Floated on main market
Vibroplant plc
1980Shoring division
established
1982US powered access
business established
1996Tool Hire:
Cannon Tool Hireacquired in 1996
2001Hire Station formed
through merger of5 regional tool
businesses
2002-2004Shoring expansion
through acquisitionof Mechplant,
Trenchshore &Eve Shorco
2006Acquisition of Bukom
Oilfield Services(Airpac Bukom formed)
1975First move into
specialistplant - Airpac
1990Groundforce
acquired fromSGB
1996Exit from USA;
UK specialist businessesexpanded
1997Rail: Torrent
Trackside acquired
2000UK Forks
divisioncreated
2001Renamed Vp plc
2005TPA and
ESSacquired
2007 - 2009Continuing growth in
specialist areas viaacquisitions of MEP and
U Mole
2010Geographical expansion:
Global (Airpac Bukom).Eire (Groundforce),
Germany (TPA)
1954
19731980 1990
2006
2011Mainland Europe -
Groundforce
2014
The Equipment Rental Specialists
24
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
° Shorflo – pumps
° ‘U’ Mole – trenchless technology
Markets:
• Civil engineering (including regulated AMP
programme), construction and housebuilding
Opportunities:
• Infrastructure, European growth and construction recovery
The Equipment Rental Specialists
National hire of telescopic handlers/rough
terrain forklifts:
• Only UK national telehandler specialist
• Fleet of c.1450 machines
• Strategically located distribution network
Markets:
• General construction, housebuild and industry
Opportunities:
• Housebuilding improvement, market share growth
25
The Equipment Rental Specialists
Agenda 26
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 assignments in more than 60 countries
Markets:
• Well testing, rig maintenance, gas transfer, LNG
Opportunities:
• Well test market, LNG, new products and growth in under
represented geographic regions
The Equipment Rental Specialists
27
Europe’s market leader in portable roadways:
• Operations in UK, Germany and Republic of Ireland
• Skilled installation of bespoke roadways and walkways
Markets:
• Transmission, construction, rail and outdoor events
Opportunities:
• Regulated transmission programme, new products and
European growth
The Equipment Rental Specialists
Agenda 28
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 renewals projects on national rail
network, London Underground and Network Rail
maintenance contract
Opportunities:
• CP5, Crossrail, maintenance
The Equipment Rental Specialists
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
° Virtual Hire – ‘white label’ partnerships,
e.g. Homebase, Garden Centre Group
Markets:
• Construction, industry, civil engineering, housebuild, DIY
Opportunities:
• Specialist products, market share growth
29
The Equipment Rental Specialists
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