Vp is a specialist rental business providing equipment and services to a wide range of markets including civil engineering, rail, oil and gas exploration, construction, outdoor events and industry, primarily within the UK (88.5% FY17 sales), but also increasingly overseas (11.5%).
If looking for a solid, dependable and well diversified plant-hire specialist, then perhaps look no further than Vp, who navigated the last downturn with real aplomb.
It said yesterday that trading for the first 5 months had been “positive” and consistent “with full year expectations”. An impressive performance, especially given macro concerns over BREXIT, a potentially slowing UK economy, a moribund crude price and unsupportive global geopolitics.
In the UK, “healthy demand” continues to be experienced in infrastructure, construction and housebuilding, augmented by April’s acquisitions of Zenith Survey Equipment (£6.15m) and Jackson Mechanical Services (£3.6). Encouragingly too, the overseas oil/gas division (Airpac Bukom) has also seen stabilisation return in AsiaPac.
As such, we make no change to our forecasts or 890p/share valuation, and look forward to hearing more at the interims on 21 November 2017. Longer term, construction of the UK’s new nuclear reactor at Hinkley Point (£17.6bn), a 3rd runway at Heathrow (£17.8m), HS2 (£55.7bn), London’s super-sewer and Crossrail 2 should all prove supportive too.
