Vp plc is a specialist equipment rental business providing equipment, people, services and support for specialist projects. It focuses on niche sectors principally in the Infrastructure (38% of Group revenue), Construction (36%), Housebuilding (7%) and Energy (10%) markets in the UK and Overseas.

It has an excellent track record of growth and high returns over many years as well as a 30+ year unbroken dividend record.

07 Jun 2023

Sustainable growth & offering 65% potential upside

Vp, the specialist equipment rental business, today released ‘in line’ final FY’23 results & a positive outlook - despite experiencing softer conditions in some of its end markets (e.g. commercial real estate, HS2, rail strikes and new build housing).

Indeed impressively, FY’23 revenues, adjusted PBTA, EPS & ROCE came in at £371.5m (+6% vs LY), £40.5m (+4%), 79p (+11%) & 14.4% respectively. This reflects solid performances in UK infrastructure (e.g. energy, rail & water) and RMI, augmented by a bounce back in International (AirPac & TR), where EBIT margins expanded to 8.1% (+4.9%) on sales up 23.9% to £38.1m.

This puts the stock (at 650p) on attractive trailing EV/EBITDA, EV/EBIT & PE multiples of 4.3x, 8.6x and 8.2x – whilst similarly paying a generous 4.2% dividend yield. We believe this is simply too cheap for a best-in-class, GDP resilient business with a proven track record.

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