Resilient H1 performance, compelling valuation

Vp traded resiliently through H1’24 against a backdrop of challenging macro-economic conditions, which impacted general construction and housebuilding activity, as previously communicated. Infrastructure demand remains supportive across water, transmission and rail, which are benefiting from long-term regulatory programmes (AMP7 for water and CP6 for rail). The Group’s overseas businesses have traded well, at levels ahead of H1 2023.

Vp’s medium term prospects look bright under the leadership of new CEO Anna Bielby and we make no changes to our forecasts. 

In our view, Vp’s share price weakness over recent months overlooks the Group’s impressive track record of long-term growth, high returns and the successful navigation of previous economic cycles. 

With the shares trading at a 50% discount to historic average trading multiples, we maintain our Fair Value estimate of £10.90 per share.