Vp is a specialist rental business providing equipment and services to a wide range of markets including civil engineering, rail, oil/gas exploration, construction, outdoor events and industry, primarily within the UK, but also from overseas.
How is Vp performing? Well we were once again delighted to hear this morning that it continues to “make good progress” thanks to solid demand in the UK infrastructure, housebuilding & construction sectors. Particularly benefitting the likes of Hire Station, UK Forks and Groundforce.
Elsewhere, the integration of Brandon Hire is progressing to plan and “performing to expectations”. Whilst internationally (c. 9% revenues), the oil & gas division, Airpac Bukom, is experiencing a “modest upturn” on the back of a gradual recovery in crude prices (today Brent >$80/barrel). Augmented by a “positive H1’19” for Australasian test & measurement specialist, TR Group.
Consequently, overall the group is on track to hit our FY19 expectations – with the stock rated at 6.4x EV/EBITDA, broadly in line with peers. We make no change to our numbers, or £11.00/share valuation.
