16/11/2007
Jeremy Pilkington, chairman of equipment rental star Vp, which was flagged up as a strong buy by Growth Company Investor at 380p earlier this year, has alerted investors to a trio of savvy acquisitions.
Both Underground Safety Services (USS) and Pipe Testing Accessories (PTA) have been acquired for a combined €800,000 (£573,000), in a move that complements the expansion of its Groundforce business, a provider of excavation support systems and specialist products for the water and construction industries. Operating out of Tullamore, these two businesses enjoyed combined revenues of €600,000 for the year to January 2007 and offer an array of shoring and pipe-stopper services to the Irish construction and civil engineering markets. Meanwhile, tool hire arm Hire Station has acquired Yorkshire-based outfit Able Safety, which turned over £500,000 in the year to August 2006, for £750,000 in cash.
In line with management’s strategy of supplementing good organic growth with acquisitions of specialist businesses, these deals add to the group’s growing and broad portfolio of businesses operating across construction, civil engineering, house building and the booming oil and gas exploration sector.
Well-established Vp, quoted in London since the early 1970s, has a very strong recent record of shareholder value delivery and represents a robust earnings and income investment. Set to unveil interim figures later this month – trading is reportedly strong – Vp achieved record results for the year to March ’07, with pre-tax profits improving by 36% to £14.5m and the total dividend rising by 25% to 8.25p per share. Keep buying.
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| Market cap: | £194m |
| PE Forecast: | n/a |
| Share price: | 420p |
| LSE | £83.13m |
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