14/07/2008
Recommended here as a strong buy at 380p last year, equipment rental specialist Vp is currently unloved in terms of its market valuation, yet the company continues to please with positive developments.
In its latest upbeat news, Harrogate-based Vp flagged up the acquisition of the tools and ‘telehandler’ fleet of UCS Plant, part of construction services group Rand, for £900,000. Significantly, Vp has signed a three-year sole supplier deal to hire out tools and other specialist equipment to two Rand subsidiaries, in a move that should foster a long-term relationship.
As Growth Company Investor has oft outlined, Vp offers investors access to strong levels of organic growth, upside from astute acquisitions and earnings resilience through its diversified market exposure.
This is offered through a focus on six businesses ranging from Hire Station, which provides tools for industry and construction, and TPA, a provider of portable roadway systems, fencing and barriers, to Torrent Trackside, which supplies products to the railway renewals and maintenance industry.
In addition, Vp offers exposure to secure spend in sectors such as water and civil engineering through its excavation support systems operation Groundforce, as well as access to the buoyant oil and gas exploration sector through its Airpac business.
In June, Vp demonstrated the efficacy of its strategy by announcing record profits for the year to March. Adjusted pre-tax profits grew by almost 40% to £20.2m, on turnover increased to £149.3m (2007: £121.6m). From earnings up 48% at 36.1p, shareholders were treated to a 27% rise in the total dividend to 10.5p.
We remain fervent fans of Vp, which represents very good value at present levels and has a great track record in terms of dividends. Keep buying.
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| Market cap: | £100.9m |
| PE Forecast: | 6.1 |
| PE Historic: | 6.1 |
| Share price: | 218.5p |
| LSE | £53.11m |
115.00p
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-21.00p
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| Other company articles: |
| 14/07/2008 |
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