Share Name Share Symbol Market Type Share ISIN Share Description
VP Plc NEX:VP.GB NEX Ordinary Share GB0009286963
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 780.00p 740.00p 820.00p 780.00p 780.00p 780.00p 0 07:51:35
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
- - - -

Vp PLC Interim Results

27/11/2018 7:00am

UK Regulatory (RNS & others)


TIDMVP.

RNS Number : 5376I

Vp PLC

27 November 2018

 
 Press Release              27 November 2018 
 

Vp plc

('Vp' or the 'Group')

Interim Results

Vp plc, the equipment rental specialist, today announces its Interim Results for the six months ended 30 September 2018 ('H1 2019' or the 'period').

Highlights

 
 --   Profit before tax and amortisation increased 22% to GBP25.9 
       million (H1 2018: GBP21.2 million) 
 --              Revenues up by 42% to GBP193.2 million (H1 2018: GBP136.0 
                  million) 
 --              EPS, pre amortisation, increased 18% to 52.3 pence per 
                  share (H1 2018: 44.2 pence per share) 
 --              Interim dividend increased by 21% to 8.2 pence per share 
                  (H1 2018: 6.8 pence per share) 
 --              Return on average capital employed 14.5% (H1 2018: 16.0%) 
 --              EBITDA increased by 25% to GBP51.6 million (H1 2018: GBP41.1million) 
 --              Capital investment in rental fleet up 13% at GBP36.7 million 
                  (H1 2018: GBP32.5 million) 
 --              Statutory profit before tax of GBP23.9 million (H1 2018: 
                  GBP20.3 million) and statutory earnings per share of 48.3 
                  pence (H1 2018: 42.5 pence) 
 

Jeremy Pilkington, Chairman of Vp plc, commented: "The Group has produced yet another excellent set of results with revenues, profits and earnings per share all significantly ahead. Both our UK and International Divisions have performed strongly with most of our business units busy supporting stable end markets. In the UK Division, whilst Brexit continues to be a distraction, day to day activity seems to be continuing largely unaffected.

With the benefit of a strong first half, which includes an in line contribution from Brandon Hire, we look forward to the remainder of the year, and beyond, with every confidence."

- Ends -

For further information:

 
 Vp plc 
 Jeremy Pilkington, Chairman                    Tel: +44 (0) 1423 533 
                                                                  400 
 Neil Stothard, Chief Executive                         www.vpplc.com 
 Allison Bainbridge, Group Finance Director 
 
 Media enquiries: 
 Buchanan 
 Henry Harrison-Topham / Jamie Hooper            Tel: +44 (0) 20 7466 
  / Maddie Seacombe                                              5000 
 Vp@buchanan.uk.com                               www.buchanan.uk.com 
 
 

Notes on alternative performance measures:

-- All performance measures stated as before amortisation are also before impairment of intangibles.

-- Basic earnings per share pre amortisation and exceptionals is reconciled to basic earnings per share in note 7.

-- Profit before tax, amortisation and exceptionals is reconciled to profit before tax in the Income Statement.

-- Return on average capital employed is based on profit before tax, interest, amortisation and exceptionals divided by average capital employed on a monthly basis using the management accounts. Profit before tax, interest, amortisation and exceptionals is reconciled to profit before interest and tax in the Income Statement.

CHAIRMAN'S STATEMENT

I am very pleased to report further significant progress for the Group in the six month period to 30 September 2018.

Profit before tax and amortisation rose by 22% to GBP25.9 million (H1 2018: GBP21.2 million) on revenues that were 42% higher at GBP193.2 million (H1 2018: GBP136.0 million). These results include a maiden first half year contribution from Brandon Hire ('Brandon') which the Group acquired in November 2017. Earnings per share pre-amortisation increased by 18% to 52.3 pence per share (H1 2018: 44.2 pence per share). As expected, return on average capital employed ('ROACE') softened slightly, to a still extremely satisfactory 14.5% (H1 2018: 16.0%) reflecting the temporary effect of the Brandon acquisition. Excluding this acquisition, the underlying ROACE remained above 16%.

Capital investment in fleet rose to GBP36.7 million (H1 2018: GBP32.5 million). Borrowings at the period end stood at GBP188.2 million (31 March 2018: GBP179.2 million). EBITDA increased to GBP51.6 million (H1 2018: GBP41.1 million) demonstrating the quality of the Group's cash flow.

In view of this excellent set of results, the Board is pleased to declare a 21% increase in the interim dividend to 8.2 pence per share (H1 2018: 6.8 pence per share) payable on 11 January 2019 to shareholders on the register as at 7 December 2018.

UK Division

The UK Division delivered a strong first half with operating profits before amortisation 21% ahead at GBP26.9 million (H1 2018: GBP22.2 million) on revenues up 46% at GBP175.3 million (H1 2018: GBP120.3 million), including a GBP39.4 million contribution from Brandon.

The division experienced continued strong demand from its rail, transmission and water infrastructure markets benefitting our Groundforce, TPA and Torrent Trackside businesses. Residential construction remained supportive and enhanced by significant customer wins for UK Forks. The general UK construction market remained broadly supportive to our specialist tool hire division.

Twelve months after the acquisition we are pleased to report good progress at Brandon Hire, which is now integrated with the Hire Station tool hire business and is performing in line with the Board's expectations. We expect full integration to be completed within 12 months.

International Division

Operating profits before amortisation moved ahead in the period to GBP1.3 million (H1 2018: GBP0.3 million) on revenues ahead by 14% at GBP17.9 million (H1 2018: GBP15.7 million).

These results reflect a further good performance from TR including encouraging progress from the newer locations in Malaysia and Singapore.

Airpac Bukom benefitted from marginally improved activity in the oil and gas market including a good contribution from our European operations. Several LNG contracts in Australia completed in the period and we have had some success in replacing this work with alternative revenue streams across the Asia Pacific region.

Outlook

The Group has produced yet another excellent set of results with revenues, profits and earnings per share all significantly ahead. Both our UK and International Divisions have performed strongly with most of our business units busy supporting stable end markets. In the UK Division, whilst Brexit continues to be a distraction, day to day activity seems to be continuing largely unaffected.

With the benefit of a strong first half, which includes an in line contribution from Brandon Hire, we look forward to the remainder of the year, and beyond, with every confidence.

Jeremy Pilkington

Chairman

27 November 2018

Condensed Consolidated Income Statement

For the period ended 30 September 2018

 
                                  Note     Six months     Six months      Full year 
                                                   to             to             to 
                                          30 Sep 2018    30 Sep 2017    31 Mar 2018 
                                          (unaudited)    (unaudited)      (audited) 
                                               GBP000         GBP000         GBP000 
 
   Revenue                          3         193,211        135,992        303,639 
 
   Cost of sales                            (146,101)       (98,083)      (229,477) 
                                        -------------  -------------  ------------- 
 
   Gross profit                                47,110         37,909         74,162 
 
   Administrative expenses                   (20,917)       (16,315)       (39,927) 
                                        -------------  -------------  ------------- 
 
 
   Operating profit                 3          26,193         21,594         34,235 
 
   Net financial expenses                     (2,325)        (1,284)        (3,421) 
                                        -------------  -------------  ------------- 
 
 
  Profit before exceptionals, 
   amortisation and taxation                   25,853         21,155         40,597 
 
   Amortisation and impairment                (1,985)          (845)        (8,101) 
 
 Exceptional items                                  -              -        (1,682) 
 
 
   Profit before taxation                      23,868         20,310         30,814 
 
   Income tax expense               4         (4,752)        (3,602)        (6,448) 
                                        -------------  -------------  ------------- 
 
   Net profit for the period                   19,116         16,708         24,366 
                                        =============  =============  ============= 
 
 Basic earnings per share          7           48.26p         42.49p         61.72p 
 
 Diluted earnings per share        7           46.38p         41.21p         60.95p 
 
 Dividend per share                8            8.20p          6.80p         26.00p 
 
 

Condensed Consolidated Statement of Comprehensive Income

For the period ended 30 September 2018

 
                                             Six months    Six months   Full year 
                                                     to            to          to 
                                            30 Sep 2018   30 Sep 2017      31 Mar 
                                                                             2018 
                                            (unaudited)   (unaudited)   (audited) 
                                                 GBP000        GBP000      GBP000 
 Profit for the period                           19,116        16,708      24,366 
 Other comprehensive income: 
 Items that will not be reclassified 
  to profit or loss 
 
  Actuarial gains on defined benefit 
  pension scheme                                      -             -         275 
 Tax on items taken direct to equity                  -             -        (50) 
 Impact of tax rate change                            -             -        (65) 
 Items that may be subsequently 
  reclassified to profit or loss 
 Foreign exchange translation difference            667         (264)       (900) 
 Effective portion of changes in 
  fair value of cash flow hedges                  (194)           356         444 
 
 Other comprehensive income/(expense)               473            92       (296) 
 
 
   Total comprehensive income for 
   the period                                    19,589        16,800      24,070 
                                           ------------  ------------  ---------- 
 

Condensed Consolidated Statement of Changes in Equity

For the period ended 30 September 2018

 
                                         Six months    Six months     Full year 
                                                 to            to            to 
                                        30 Sep 2018   30 Sep 2017   31 Mar 2018 
                                        (unaudited)   (unaudited)     (audited) 
                                             GBP000        GBP000        GBP000 
 
   Total comprehensive income for 
   the period                                19,589        16,800        24,070 
 
   Tax movements to equity                    1,060           172           444 
 
   Impact of tax rate change                      -          (20)          (25) 
 
   Share option charge in the period          1,339         1,158         2,446 
 
   Net movement relating to shares 
   held by Vp Employee Trust                (2,029)         (920)         (822) 
 
   Dividends to shareholders                (7,606)       (6,286)       (8,983) 
 Change in equity during the period          12,353        10,904        17,130 
 
   Equity at the start of the period        154,446       137,316       137,316 
 
   Equity at the end of the period          166,799       148,220       154,446 
                                       ------------  ------------  ------------ 
 

There were no movements in issued share capital, the capital redemption reserve or share premium in the reported periods.

Condensed Consolidated Balance Sheet

At 30 September 2018

 
                                    Note   30 Sep 2018        31 Mar   30 Sep 2017 
                                                                2018 
                                           (unaudited)     (audited)   (unaudited) 
                                                GBP000        GBP000        GBP000 
 Non-current assets 
 
   Property, plant and equipment      5        251,882       241,938       211,805 
 Goodwill                            6          60,546        60,355        41,380 
 Intangible assets                   6          29,167        31,122         8,689 
 Employee benefits                               2,230         2,230         1,928 
                                          ------------  ------------  ------------ 
 Total non-current assets                      343,825       335,645       263,802 
                                          ------------  ------------  ------------ 
  Current assets 
 
   Inventories                                   8,017         8,662         6,328 
 Trade and other receivables                    82,377        70,915        57,040 
 Cash and cash equivalents           9          15,508        18,194        17,129 
 Total current assets                          105,902        97,771        80,497 
                                          ------------  ------------  ------------ 
 
   Total assets                                449,727       433,416       344,299 
                                          ------------  ------------  ------------ 
 
   Current liabilities 
 
   Interest bearing loans and 
   borrowings                         9        (7,784)      (10,218)       (8,924) 
 Income tax payable                            (3,447)       (2,365)       (3,001) 
 Trade and other payables                     (67,238)      (69,899)      (53,892) 
                                          ------------  ------------  ------------ 
 Total current liabilities                    (78,469)      (82,482)      (65,817) 
                                          ------------  ------------  ------------ 
 
   Non-current liabilities 
 
   Interest bearing loans and 
   borrowings                         9      (195,960)     (187,148)     (123,596) 
 Deferred tax liabilities                      (8,499)       (9,340)       (6,666) 
                                          ------------  ------------  ------------ 
 Total non-current liabilities               (204,459)     (196,488)     (130,262) 
                                          ------------  ------------  ------------ 
 
   Total liabilities                         (282,928)     (278,970)     (196,079) 
                                          ------------  ------------  ------------ 
 
 Net assets                                    166,799       154,446       148,220 
                                          ------------  ------------  ------------ 
 
 Equity 
 
   Issued share capital                          2,008         2,008         2,008 
 Capital redemption reserve                        301           301           301 
 Share premium                                  16,192        16,192        16,192 
 Foreign currency translation 
  reserve                                          380         (287)           349 
 Hedging reserve                                    97           291           203 
 Retained earnings                             147,794       135,914       129,140 
                                          ------------  ------------  ------------ 
 Total equity attributable 
  to equity 
  holders of parent                            166,772       154,419       148,193 
 
 Non-controlling interest                           27            27            27 
 Total equity                                  166,799       154,446       148,220 
                                          ------------  ------------  ------------ 
 

Condensed Consolidated Statement of Cash Flows

For the period ended 30 September 2018

 
                                            Note    Six months    Six months    Full year 
                                                            to            to           to 
                                                   30 Sep 2018   30 Sep 2017       31 Mar 
                                                                                     2018 
                                                   (unaudited)   (unaudited)    (audited) 
                                                        GBP000        GBP000       GBP000 
 Cash flows from operating activities 
 
  Profit before taxation                                23,868        20,310       30,814 
 Adjustment for: 
 Share based payment charges                             1,339         1,158        2,446 
 Depreciation                                5          23,451        18,659       40,319 
 Amortisation and impairment of 
  intangibles                                            1,985           845        8,101 
 Net financial expense                                   2,325         1,284        3,421 
 Profit on sale of property, plant 
  and equipment                                        (3,084)       (3,229)      (6,095) 
                                                  ------------  ------------  ----------- 
 Operating cash flow before changes 
  in working capital and provisions                     49,884        39,027       79,006 
 Decrease/(increase) in inventories                        617         (177)      (1,049) 
 Increase in trade and other receivables              (11,462)       (5,483)      (6,225) 
 (Decrease)/increase in trade and 
  other payables                                       (3,560)       (4,796)        1,907 
                                                  ------------  ------------  ----------- 
 Cash generated from operations                         35,479        28,571       73,639 
 Interest paid                                         (2,336)       (1,192)      (3,190) 
 Interest element of finance lease 
  rental 
  payments                                               (117)          (90)        (213) 
 Interest received                                          91             6           75 
 Income tax paid                                       (3,451)       (2,663)      (7,014) 
                                                  ------------  ------------  ----------- 
 Net cash flows from operating 
  activities                                            29,666        24,632       63,297 
 
   Cash flows from investing activities 
 Proceeds from sale of property, 
  plant and equipment                                    9,850         8,694       18,518 
 Purchase of property, plant and 
  equipment                                           (39,194)      (32,646)     (71,571) 
 Acquisition of businesses and 
  subsidiaries (net of cash and 
  overdrafts)                                                -       (8,185)     (49,660) 
                                                  ------------  ------------  ----------- 
 Net cash flows used in investing 
  activities                                          (29,344)      (32,137)    (102,713) 
 
 
   Cash flows from financing activities 
 Purchase of own shares by Employee 
  Trust                                                (2,029)         (920)        (822) 
 Repayment of loans                                          -          (77)     (29,036) 
 New loans                                               9,000        15,000       79,000 
 New finance leases                                        108             -          348 
 Payment of hire purchase and finance 
  lease liabilities                                      (880)         (551)      (1,275) 
 Dividends paid                              8         (7,606)       (6,286)      (8,983) 
                                                  ------------  ------------  ----------- 
 Net cash flows (used in)/from 
  financing activities                                 (1,407)         7,166       39,232 
 
   Net decrease in cash and cash 
   equivalents                                         (1,085)         (339)        (184) 
 Effect of exchange rate fluctuations 
  on cash held                                             249         (160)        (395) 
 Cash and cash equivalents at beginning 
  of period                                              9,503        10,082       10,082 
                                                  ------------  ------------  ----------- 
 Cash and cash equivalents at end 
  of period                                  9           8,667         9,583        9,503 
                                                  ------------  ------------  ----------- 
 

Notes to the Condensed Financial Statements

   1.            Basis of Preparation 

Vp plc (the "Company") is incorporated and domiciled in the United Kingdom. The Condensed Consolidated Interim Financial Statements of the Company for the half year ended 30 September 2018 consolidate the financial information of the Company and its subsidiaries (together referred to as the "Group").

This interim announcement has been prepared in accordance with the Disclosure and Transparency Rules of the UK Financial Services Authority and the requirements of IAS34 ("Interim Financial Reporting") as adopted by the EU. With the exception of the new standards below, the accounting policies applied are consistent for all periods presented and are in line with those applied in the annual financial statements for the year ended 31 March 2018, which were prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU.

New accounting standards became applicable for the current reporting period and the Group changed its accounting policies as a result of adopting the following standards: IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers. The impact of the adoption of these standards and the new accounting policies are disclosed in note 11.

In addition, the group is in the process of reviewing IFRS 16 Leases. It will result in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-term and low-value leases. The accounting for lessors will not significantly change. The Group has not yet determined to what extent the new standard will result in the recognition of an asset and a liability for future payments and how this will affect the Group's profit and classification of cash flows. The standard is mandatory for first interim periods within annual reporting periods beginning on or after 1 January 2019. The Group does not intend to adopt the standard before its effective date.

The interim announcement was approved by the Board of Directors on 26 November 2018.

The Condensed Consolidated Interim Financial Statements do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.

The comparative figures for the financial year ended 31 March 2018 are extracted from the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies.

The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 March 2018 except as described in note 11.

The Group continues to be in a healthy financial position with total banking facilities at the period end of GBP207.5 million, including an overdraft facility. Since the year end net debt has increased by GBP9.0 million to GBP188.2 million. The Board has evaluated the banking facilities and the associated covenants on the basis of current forecasts, taking into account the current economic climate and an appropriate level of sensitivity analysis. Having reassessed the principal risks the Directors consider it appropriate to adopt the going concern basis of accounting in preparing the interim financial information.

   2.            Risks and Uncertainties 

The principal risks and uncertainties facing the Group and the ways in which they are mitigated are described on page 18 and 19 of the 31 March 2018 Annual Report and Accounts. The principal risks and uncertainties are market risk, competition, investment / product management, people, safety, financial risks and contractual risk. These risks and uncertainties remain the same for this interim financial report.

   3.            Summarised Segmental Analysis 
 
                                Revenue                Operating Profit Before Amortisation 
                         Sept      Sept       Mar           Sept         Sept            Mar 
                         2018      2017      2018           2018         2017           2018 
                       GBP000    GBP000    GBP000         GBP000       GBP000         GBP000 
 
 UK                   175,338   120,299   271,989         26,912       22,178         43,001 
 
 International         17,873    15,693    31,650          1,266          261          1,017 
 
                      193,211   135,992   303,639         28,178       22,439         44,018 
                     --------  --------  --------  -------------  -----------  ------------- 
 
 Amortisation                                            (1,985)        (845)        (8,101) 
 Exceptional items                                             -            -        (1,682) 
                                                   -------------  -----------  ------------- 
 Operating Profit                                         26,193       21,594         34,235 
                                                   -------------  -----------  ------------- 
 
 

Net Assets

 
                               Assets                            Liabilities 
                    Sept 18      Mar 18     Sept 17     Sept 18      Mar 18     Sept 17 
                     GBP000      GBP000      GBP000      GBP000      GBP000      GBP000 
 
 UK                 410,368     396,608     300,825     276,787     274,505     192,357 
 
 International       39,359      36,808      43,474       6,141       4,465       3,722 
 
 
                    449,727     433,416     344,299     282,928     278,970     196,079 
                 ----------  ----------  ----------  ----------  ----------  ---------- 
 
 
                              Net Assets 
                     Sept 18      Mar 18     Sept 17 
                      GBP000      GBP000      GBP000 
 
 UK                  133,581     122,103     108,468 
 
 International        33,218      32,343      39,752 
 
 
                     166,799     154,446     148,220 
                  ----------  ----------  ---------- 
 
   4.            Income Tax 

The effective tax rate is 19.9% in the period to 30 September 2018 (H1 2018: 17.7%). The effective rate for the period reflects the current standard tax rate of 19% (H1 2018: 19%), as adjusted for estimated permanent differences for tax purposes offset by gains covered by exemptions. This is the best estimate of the weighted average annual income tax rate expected for the full financial year.

   5.            Property, Plant and Equipment 
 
                                                        Sept 2018             Mar 2018             Sept 2017 
                                                           GBP000               GBP000                GBP000 
           Opening carrying amount                        241,938              195,569               195,569 
           Additions                                       39,935               71,412                34,929 
           Acquisitions                                     (115)               28,337                 5,549 
           Depreciation                                  (23,451)             (40,319)              (18,659) 
           Disposals                                      (6,766)             (12,423)               (5,465) 
           Effect of movements in exchange 
            rates                                             341                (638)                 (118) 
                                             --------------------  -------------------  -------------------- 
           Closing carrying amount                        251,882              241,938               211,805 
                                             --------------------  -------------------  -------------------- 
 

The value of capital commitments at 30 September 2018 was GBP13,803,000 (31 March 2018 GBP8,349,000).

   6.            Business Combinations 

As previously disclosed, the Group acquired Brandon Hire during the year ended 31 March 2018. During the measurement period, the fair value of the assets acquired and liabilities assumed are provisional while management finalise the fair value assessment.

There were no acquisitions in the interim period.

   7.            Earnings Per Share 

Earnings per share have been calculated on 39,608,968 shares (H1 2018: 39,319,346 shares) being the weighted average number of shares in issue during the period. Diluted earnings per share have been calculated on 41,215,948 shares (H1 2018: 40,546,052 shares) adjusted to reflect conversion of all potentially dilutive ordinary shares. Basic earnings per share before the amortisation of intangibles was 52.32 pence (H1 2018: 44.23 pence) and was based on an after tax add back of GBP1,608,000 (H1 2018: GBP684,000) in respect of the amortisation of intangibles. Diluted earnings per share before amortisation of intangibles was 50.28 pence (H1 2018: 42.90 pence).

   8.            Dividends 

The Directors have declared an interim dividend of 8.20 pence (H1 2018: 6.80 pence) per share payable on 11 January 2019 to shareholders on the register at 7 December 2018. The dividend declared will absorb an estimated GBP3,247,000 (H1 2018: GBP2,697,000) of shareholders funds. The dividend proposed at the year-end was subsequently approved at the AGM in August 2018 and GBP7,606,000 was paid in the period (H1 2018: GBP6,286,000 was paid). The cost of dividends in the Statement of Changes in Equity is after adjustments for the interim and final dividends waived by the Vp Employee Trust in relation to the shares it holds for the Group's share option schemes.

   9.            Analysis of Net Debt 
 
                                         As at        Cash         As at 
                                         1 Apr        Flow        30 Sep 
                                            18                        18 
                                        GBP000      GBP000        GBP000 
 
   Cash and cash equivalents            18,194     (2,686)        15,508 
 
   Bank overdraft                      (8,691)       1,850       (6,841) 
 
   Revolving credit facilities 
   / loans                           (186,000)     (9,000)     (195,000) 
 
   Finance leases and hire 
   purchases                           (2,675)         772       (1,903) 
                                  ------------  ----------  ------------ 
 
                                     (179,172)     (9,064)     (188,236) 
                                  ------------  ----------  ------------ 
 

The Group's committed revolving credit bank facilities comprise a GBP65 million facility which expires in May 2020 and a GBP135 million facility which expires in December 2021, together with overdraft facilities totalling GBP7.5 million.

   10.          Related Party Transactions 

Transactions between Group Companies, which are related parties, have been eliminated on consolidation and therefore do not require disclosure. The Group has not entered into any other related party transactions in the period which require disclosure in this interim statement.

   11.          Changes in Accounting Policies 

This note explains the impact of the adoption of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers on the Group's consolidated financial statements.

(a) IFRS 9 Financial Instruments

IFRS 9 replaces IAS 39 relating to the recognition, classification and measurement of financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and hedge accounting. The adoption of IFRS 9 from 1 April 2018 primarily resulted in changes in the Group's accounting policy for impairment of financial assets. In accordance with the transitional provisions in IFRS 9, comparative figures have not been restated. In addition, the impact of IFRS 9 has not been adjusted within opening reserves due to the revised policy having an immaterial difference of GBP0.1 million as at 31 March 2018.

The Group was required to revise its impairment methodology under IFRS 9 for trade receivables. The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. Trade receivables are written off when there is no reasonable expectation of recovery. The loss allowances for trade receivables are based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these assumptions based on the Group's past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

(b) IFRS 15 Revenue from Contracts with Customers

The Group adopted IFRS 15 from 1 April 2018 which did not result in significant changes to the Group's accounting policies and had no impact to the amounts recognised in the consolidated financial statements. Below summarises the disaggregation of revenue from contracts with customers from the total revenue disclosed in the Condensed Consolidated Income Statement:

 
                                       Sept 2018             Sept 2017             Mar 2018 
                                          GBP000                GBP000               GBP000 
           Equipment hire                146,070               105,482              234,735 
           Services                       30,680                20,854               44,260 
           Sales of goods                 16,461                 9,656               24,644 
           Total revenue                 193,211               135,992              303,639 
                            --------------------  --------------------  ------------------- 
 

(i) Equipment hire - Revenue from equipment hire, which is the vast majority of Group revenue, is not affected by the adoption of IFRS 15 and is accounted for under the leasing standard, IAS 17.

(ii) Services - Revenue from providing services is recognised in the accounting period in which the services are rendered, the majority of which are short term and a very immaterial proportion bridge a financial period end. Any increases or decreases in estimated revenues or costs arising from changed circumstances are reflected in profit in the period in which they become known by management. Customers are invoiced on an agreed upon basis and consideration is payable when invoiced.

(iii) Sales of goods - Revenue from the sales of goods primary relates to consumables and new machine sales. Revenue is recognised when a Group entity sells a consumable to the customer or when control of the new machine has transferred ownership to the buyer upon delivery. Depending on the type of sale, a receivable is recognised when the goods are delivered or due immediately.

   12.          Contingent Liabilities 

In an international group a variety of claims arise from time to time in the normal course of business. Such claims may arise due to actions being taken against group companies as a result of investigations by fiscal authorities or under regulatory requirements. Provision has been made in these consolidated financial statements against any claims which the directors consider are likely to result in significant liabilities.

   13.          Forward Looking Statements 

The Chairman's Statement includes statements that are forward looking in nature. Forward looking statements involve known and unknown risks, assumptions, uncertainties and other factors which may cause the actual results, performance or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Except as required by the Listing Rules and applicable law, the Company undertakes no obligation to update, review or change any forward looking statements to reflect events or developments occurring after the date of this report.

   14.          Alternative Performance Measures 

(i) All performance measures stated as before amortisation are also before impairment of intangibles.

(ii) Basic earnings per share pre amortisation and exceptionals is reconciled to basic earnings per share in note 7.

(iii) Profit before tax, amortisation and exceptionals is reconciled to profit before tax in the Income Statement.

(iv) Return on average capital employed is based on profit before tax, interest, amortisation and exceptionals divided by average capital employed on a monthly basis using the management accounts. Profit before tax, interest, amortisation and exceptionals is reconciled to profit before interest and tax in the Income Statement.

Responsibility statement of the directors in respect of the half-yearly financial report

We confirm that to the best of our knowledge:

-- the condensed consolidated set of interim financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;

   --     the interim management report includes a fair review of the information required by: 

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

By order of the Board

27 November 2018

The Board

The Directors who served during the six months to 30 September 2018 were:

Jeremy Pilkington (Chairman)

Neil Stothard (Chief Executive)

Allison Bainbridge (Group Finance Director)

Steve Rogers (Non-Executive Director)

Phil White (Non-Executive Director)

Independent review report to Vp plc

Report on the Condensed Consolidated Interim Financial Statements

Our conclusion

We have reviewed Vp plc's Condensed Consolidated Interim Financial Statements (the "interim financial statements") in the interim report 2018/19 of Vp plc for the 6 month period ended 30 September 2018. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

What we have reviewed

The interim financial statements comprise:

   --     the Condensed Consolidated Balance Sheet as at 30 September 2018; 

-- the Condensed Consolidated Income Statement and Condensed Consolidated Statement of Comprehensive Income for the period then ended;

   --     the Condensed Consolidated Statement of Cash Flows for the period then ended; 
   --     the Condensed Consolidated Statement of Changes in Equity for the period then ended; and 
   --     the explanatory notes to the interim financial statements. 

The interim financial statements included in the interim report 2018/19 have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The interim report 2018/19, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report 2018/19 in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express a conclusion on the interim financial statements in the interim report 2018/19 based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What a review of interim financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the interim report 2018/19 and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

PricewaterhouseCoopers LLP

Chartered Accountants

Leeds

27 November 2018

- Ends -

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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November 27, 2018 02:00 ET (07:00 GMT)

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