Companies: VP.   

Equipment rental specialist Vp, profiled by Growth Company Investor as a strong buy at 380p last year, goes from strength to strength, although the group’s market valuation has suffered in line with the general de-rating of small-cap companies.

In its latest trading missive, the Jeremy Pilkington-chaired concern said that since announcing strong interim results in November – profits increased by 55% to £12.1m – performance has ‘remained positive’ across the wide range of sectors that the company serves. ‘Activity levels have built up satisfactorily since the Christmas break,’ with Vp seeing ‘no discernible’ impact from the problems in the wider financial markets.

Encouragingly, recent acquisitions USS, PTA and Able Safety have integrated well into the Groundforce and Hire Station divisions and with good demand being seen for its products and services, Vp is confident of hitting forecasts for the year to March 2008. House broker Brewin Dolphin has pencilled in a significant increase in pre-tax profits of £19m (£14.2m) and earnings of 30.4p (22.8p), placing the shares on a forward p/e of 10.5 times with a 3.1 per cent yield, based on a forecast dividend of 10p.

We remain Vp enthusiasts based on the resilient portfolio of businesses it has bought and built, operating across a slew of different sectors (water, rail, construction, and oil and gas), as well as management’s formidable recent record of shareholder value creation. If you bought on our advice, take the opportunity to add to your holding with the shares trading at bargain levels.

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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