Companies: VP.   

Equipment rental concern Vp powered home with a strong 14% jump in profits for the year to March, an especially good performance given the year's growth was delivered entirely organically. Pre-tax profits grew to £9.8m (£8.6m), on a mild 8% lift in turnover to £90m, and investors were also treated to a 15% dividend hike to 5.75p. Managing director Neil Stothard announced that the return on capital employed, a key metric in this sector, improved to 17% (16%), and Vp closed out the year with lower net debt of £2.4m (£7.5m) thanks to excellent operating cashflow. This left gearing at a meagre 4% – 'we're really underleveraged at the moment' mused Stothard – even after last year's £15.1m of capital investment spend. But it means Vp has the balance sheet firepower to chase growth acquisitively and through investment back into the business. Vp is starting to look a resilient player indeed, with its five rental businesses operating across a wealth of sectors, including civil engineering and water utilities, construction, oil and gas exploration and rail infrastructure support. Various highlights included 7% profits growth at Groundforce, an 11% rise in profits at UK Forks, and a doubling of profits to £1.1m at Airpac Oilfield Services. The one dark spot was Hire Station, where losses of £700,000 were racked up, but Stothard expects profitability from Hire Station this year under new management. For Vp's current year, Michael Parkinson of shop broker Brewin Dolphin forecasts pre-tax profits of £10.5m and earnings of 16.5p, placing the shares on a forward p/e of 12.5, lower than the sector average. Worth a look.

VP	LSE	£59.12m	128.00p	6.00p
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Other company articles:
Vp			14/07/2008
Rental firm remains great value			03/03/2008
Vp			18/02/2008
Vp Group			16/11/2007
Vp offers resilient rental earnings and income			06/07/2007