Solidly profitable, growing well despite the economic turbulence, dividend paying and clearly on top of its trading niche, Vp has much to recommend itself to investors as 2012 limbers up.
The group is a specialist rental business, serving a multitude of markets from civil engineering, rail and oil & gas to construction and outdoor events.
It primarily serves the UK market, but it does have overseas interests. The benefits of this diversification is writ large over the latest interim results, which were much better than expected (not a bad achievement in the current climate).
In the six months to September, sales increased by 18% to £84 million as pre-tax profits leapt 21% to £10.4 million. The Harrogate- based firm invested heavily in its fleet, with money devoted to this cause soaring by 79% to £15.9m, although the typically weaker second half will not be quite as active.
CEO Neil Stothard said the figures underlined the firm’s ‘sector-leading performance’, and noted that, with general construction weak, Vp has worked hard to win new business in areas such as infrastructure. Five of its six divisions enjoyed sales growth, while Hire Station struggled due to the sluggish construction market.
The Groundforce arm, the most significant for Vp, performed robustly, while UK Forks continued its turnaround. Despite the recession, Vp has never cut its dividend so expectations of a 10.7p full-year payout will provide a useful bit of income for many portolios.
Brewin Dolphin has upped its forecasts by £400,000, and is now expecting a 2012 pre-tax profit of £14.7 million and EPS of 25.7p. With further benefits of operational gearing to come, the shares are too low. Buy and lock away.
Listing: Main Market
Sector: Support Services
Share price: 213p
52-week high/low: 254p/175p
Market cap: £96m
Since 2008, our share tips outperformed the benchmark by 281%. Take a free trial and get access to our recommendations today. Start free trial now.
The most comprehensive review of AIM directors' pay available, and this year includes a record sample of 1,044 AIM-quoted companies. The full report is available to order for £365 + VAT. Click here for more info
In-depth coverage of selected AIM companies within the small-cap and fast growing company sector including AIM and PLUS Markets shares and listed stocks. Company research and analysis from GCI analysts updated daily.
Be the first to receive our independent analysis and research, designed to help you generate more wealth for you and your family over the long term. Subscribe and save.
David Thorpe gets to grips with fund manager Dan Nickols.
Ben Jaglom takes a look at the attempts by Southern European nations to develop their natural resources.
Ben Jaglom looks at the buying and selling activities in the small-cap space.