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Vp plc
Preliminary Results
Year Ended31 March 2005
Jeremy Pilkington
Chairman
Neil Stothard
Group Managing Director
Mike Holt
Group Finance Director
• Specialist equipment rental
• Breadth of sector exposure – earnings resilience
• Market leading businesses
• Core expertise in asset management
• Excellent cash flow and strong balance sheet
• Significant growth opportunities identified
Vp – an introduction
• 5 years of >10% earnings growth
• PBT increased by 14%* to £9.4m
• EPS increased by 14%* to 15.04 pence
• Return on capital employed increased to 17%
• Dividend increased 15% to 5.75 pence
Highlights
* Excluding prior year exceptional property profit
Financial Review
Mike Holt
Group Finance Director
Financial Highlights
* Excluding prior year exceptional property profit** Restated for UITF 38
Year Ended Year Ended31 March 2005 31 March 2004
£m £mTurnover £90.0m £83.5m +8%PBT (pre-goodwill) £9.8m £8.6m* +14%PBT (post-goodwill) £9.4m £8.2m* +14%Operating Margin 10.8% 10.3% +5%EPS 15.04p 13.19p* +14%Dividend 5.75p 5.00p +15%
ROCE 17% 16% * *Net Debt £2.4m £7.5m
Balance Sheet
31 March 2005 31 March 2004*£m £m
Intangible Fixed Assets 7.0 7.1Tangible Fixed Assets 48.7 49.9
55.7 57.0Net Working Capital 7.0 6.6Provisions (4.0) (4.3)Capital Employed 58.7 59.3Net Debt (2.4) (7.5)Net Assets 56.3 51.8
Gearing 4% 14%
Net Assets Per Share (Pence) 122 112
* Restated for UITF 38
Year Ended Year Ended
31 March 2005 31 March 2004
£m £m
Operating Profit 9.7 8.7 +12%
Depreciation 11.5 11.6
Profit on Sale of Fixed Assets (1.2) (1.2)
Change in Net Working Capital 0.1 (2.3)
Net Cash Inflow 20.1 16.8 +20%
Cash to Profit Ratio 208% 194%
Cash Flow per Share 46.5p 38.7p +20%
Operating Cash Flow
Cash Flow
Year Ended Year Ended31 March 2005 31 March 2004
£m £mOperating Cash Flow 20.1 16.8Net Capital Expenditure (9.0) (6.5)Net I nterest (0.3) (0.4)Tax (3.3) (2.4)Free Cash Flow 7.5 7.5Acquisitions and Disposals (0.2) (6.5)Equity Dividends Paid (2.2) (2.0)Cash Inflow (Outflow) 5.1 (1.0)Acquired Net Debt - (0.3)Movement in Net Debt 5.1 (1.3)
International Financial Reporting Standards
P & L B/S
Pensions Low Med
Share Schemes Med Med
Deferred Tax Low Low
Goodwill impairment Low Low
Financial I nstruments Low Low
Impact through reserves of circa £4m on net assets of £56m
Impact
Operational Review
Neil Stothard
Group Managing Director
Segmental Analysis
31 Mar 05 31 Mar 04 31 Mar 05 31 Mar 04
£m £m £m £m
Groundforce 24.6 19.3 5.7 5.3 +7%
UK Forks 12.8 12.4 1.4 1.3 +11%
Airpac Oilfield Services 4.5 3.7 1.1 0.5 +114%
Hire Station 34.8 36.5 (0.7) (0.4) -
Torrent Trackside 13.3 11.6 2.5 2.3 +8%
TOTAL 90.0 83.5 10.1 9.0 +12%
Sales Operating Profit
Breadth of Markets – Earnings Resilience
12%
24%
25%5%
15%
19% ResidentialNon-residentialWater and CivilsOil and GasRailRMI
Excavation support systems and specialist products for the water, civil engineering and construction industries
Groundforce
Groundforce
31 March 2005 31 March 2004£m £m
Sales 24.6 19.3 +27%
Profit 5.7 5.3 +7%
Margin 23.2% 27.5%
Fleet Capex 2.6 1.8
• Market Leader in ground support systems
• Good demand from AMP3/major projects
• Successful integration of 03/04 acquisitions
• Shoring hire fleet rationalisation
• Improved national coverage – Piletec, Stoppers, Survey
• Product extension opportunities
• Well positioned for future AMP4 activity when commenced
Groundforce
Rough terrain material handling equipment for industry, residential and general construction
UK Forks
UK Forks
31 March 2005 31 March 2004£m £m
Sales 12.8 12.4 +3%
Profit 1.4 1.3 +11%
Margin 11.0% 10.5%
Fleet Capex 3.1 2.5
• Profit and return on capital growth
• Focused product investment
– 10% ‘net’ growth in fleet
• Further progress with major house-builders
• Customer appetite for unique offering to the market
• Housebuilding/Construction markets relatively supportive
UK Forks
Equipment and service providers to the international oil and gas exploration and development markets
Airpac Oilfield Services
Airpac Oilfield Services
31 March 2005 31 March 2004£m £m
Sales 4.5 3.7 +22%
Profit 1.1 0.5 +114%
Margin 24.4% 13.5%
Fleet Capex 0.5 0.5
• Excellent performance
• Strong demand from North Sea and South East Asia
• International project activity good
• New competences being developed
• Geographic growth opportunities
• Market remains busy, with supportive crude oil price
Airpac Oilfield Services
Tools and specialist products for industry and construction
Hire Station
Hire Station
31 March 2005 31 March 2004£m £m
Sales 34.8 36.5 (5% )
Loss (0.7) (0.4)
Margin - -
Fleet Capex 5.7 4.2
Hire Station
• Disappointing results
• Turnover reflects exit in prior year of surplus
locations
• Lifting Point responsible for majority of losses
• Tool hire profitable after a difficult 1st Quarter
• Repositioning year restoring stability
• Focus on core product lines and guaranteed availability
• Launch of regional hire desk structure• Lower cost network supporting local, regional and
national customers• Specialist Products Division created December
2004• Hire Station commenced New Year in line with
plan
Hire Station
Portable rail infrastructure equipment, lighting and related services for the railway renewals and maintenance industry.
Torrent Trackside
Torrent Trackside
31 March 2005 31 March 2004£m £m
Sales 13.3 11.6 +15%
Profit 2.5 2.3 +8%
Margin 18.8% 19.8%
Fleet Capex 1.5 1.8
• Strong performance in challenging year
• Renewals business – further expansion
• Maintenance business steady but in transition
• Network Rail maintenance plant tender
• London Underground – new area for growth
• Prospects positive overall in competitive market
Torrent Trackside
Summary
• A further year of excellent progress
• Profitability underpinned by cash generation and strong
balance sheet
• Hire Station well positioned to deliver recovery in coming
year
• Management appetite for growth and incentivised
accordingly
• Top quality teams across all divisions
• Opportunities to accelerate pace of growth within core
expertise of asset management
Overview and Outlook
Jeremy Pilkington
Chairman
Turnover (£m)
59.866.8
75.583.5
90.0
50556065707580859095
100
2001 2002 2003 2004 2005
Profit Before Tax (pre goodwill) (£m)
3.3
6.57.8 8.6
9.8
0123456789
10
2001 2002 2003 2004 2005*excluding prior year exceptional property profit
*
Return on Capital Employed (%)
7.4
12.414.8 15.7 16.5
0
2
4
6
8
10
12
14
16
18
2001 2002 2003 2004 2005 Restated UITF38
%
Dividend (pence per share)
4.05 4.24.5
5.0
5.75
3
3.5
4
4.5
5
5.5
6
2001 2002 2003 2004 2005
Earnings per share (pence)
5.03
10.2312.36 13.19
15.04
0
2
4
6
8
10
12
14
16
2001 2002 2003 2004 2005
*excluding prior year exceptional property profit
*
Total Shareholder Return
• Market leader position strengthened
• Excellent acquisition identification and integration track record
• AMP4 – expect delays but very positive
Groundforce
• Market leader - unique service offering
• Converting larger users
• Housebuilding remains firm; prospects good
• Operational efficiency consistently driving up ROCE
- 2002 : 10.5% 2005 : 14.4%
UK Forks
• Market Leader
• Excellent year – strategy bearing fruit
• Oil industry activity strong
• International growth opportunities
• Small but vital role in oilfield supply chain
Airpac Oilfield Services
• Very disappointing year, behind management expectation
• Improving trend established within tools
• Reorganisation and refocus at Specialist Products
• Recovery plan back on track but behind schedule
Hire Station
• Clear market leader
• Another excellent year against background of industry change
• Challenge to replace NR maintenance plant volumes
• Renewals programme workload strong
• Significant opportunities within LUL but will take time
Torrent Trackside
• Overall outlook for the Group very positive
- UK infrastructure spend set to continue
- Safety and regulatory regimes supporting growth
• Breadth of markets gives earnings resilience
• Strength of balance sheet and cash flow gives significant investment capacity
• Growth opportunities, organic and acquisition, identified in all markets
Group Outlook
• Board committed to leveraging up
• All levels of management strongly incentivised to deliver earnings growth in their business
• Strengthened senior management team
Group Outlook
