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 Dec 2020

The stars are aligning

We think equipment rental specialist Vp is ideally placed to benefit from a sustainable upswing. Today posting robust H1’21 results (see below) – as evidenced by its 7.6% EBIT margin (vs 15.2% LY), £41m positive cashflow and 10.3% ROCE (14.5% LY), despite suffering a -23.8% sales decline to £142.1m, amidst some of the toughest conditions in a generation.

Our forecasts have been reinstated, delivering a fair value of 900p/share. Meaning that at 775p, we believe the stock is attractively priced. Both in absolute terms and vs peers, trading on FY22 multiples (pre IFRS16) of 13.1x PER, 12.6x EV/EBIT and 5.2x EV/EBITDA.

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