LInk broken? Have mailed them. |
Trading update looks OK. ("Challenging" in construction, but that's no surprise.)
H1 results 28/11. |
cfro - I don't think the amount of the debt is a problem (Net Debt : EBITDA is about 1.4x), but there is concern about next year's refinancing of the £53m RCF. (The auditors consider it material.)
They say discussions are proceeding well, and should be completed by November. I see no reason why a bank would refuse to refinance, given the interest charge (guess) of £4m, compared with operating cashflow of £80m and, in extremis, a dividend costing £15m.
Of course, the new RCF could well be a bigger spread over SONIA, which seems to be your main point.
Don't ask me why the shares are so low-priced, as I've no idea why. It may be concern over the refinancing, of course. |
Well, the share price is now about half where it was when it was put up for sale..
What about all that debt here though, isnt that off-putting to any potential acquirer? They say they are in the process of re-financing and will make an announcement before the interims but with rates going up with them owing so much they are not in a great position to negotiate very good terms..
In turn that could be a big drag on future performance especially if the housing market and construction etc fall into a slump. |
Fortunate to have held off. Always the chance of a bid?. |
It was up for sale, but no-one was interested. Maybe that will change if PE companies renew their interest in UK assets.
It won't be a huge premium, though. |
Excluding the very brief Covid spike down in 2021 this is now at a 10 year low and the shareprice has halved over the past 5 years. Looks great value but what could be the catalyst for a trend reversal ?
No position but added to my watchlist. |
Today's change at the top of Vp plc is a major milestone for the business.
After >25 years, existing CEO Neil Stothard has decided to retire & hang up his boots (Neil was also apparently an accomplished Oxbridge rugby blue in his day).
Transferring the baton to existing CFO Anna Bielby from 1st Sept.
For investors, I have been covering Vp for almost a decade, and believe this astute transition will work like clockwork.
Sure Neil's leadership, strategic direction & commercial acumen will be sorely missed.
However having spoken to Anna on a number of occasions - I equally know she is a highly capable executive, and will successfully lead Vp plc into the next stages of its life.
Better still, the stock at 575p, looks incredibly under-valued, trading on a 7.2x FY'24 PER. |
CEO to retire. orderly internal succession: |
Thanks, I hold RIII already which has VP as a top holding, may buy a small
amount as a direct holding. |
What size are you trying to deal in? Six figures would be difficult even in a good market. The spread is 7p for 2500, which is pretty good IMO. Didn't check in anything larger. |
Is there anyway to work around the % spread, it's ridiculous. |
I bought some the other day. The finances are quite compelling (as the recent Hardman report explains), and they will earn from any construction or homebuilding expansion. Water will need investment.
The proposed sale by the majority holders was unfortunate, and no doubt it's part of the story. I'm happy to collect fairly secure dividends until it re-rates with the market or gives a surprise. |
Hard to see catalysts beyond positive cashflows into UK smallcap funds, which compel portfolio managers to consider new ideas. Sorry, don't know when that happens though! |
And have been "mis-priced" forever, seemingly.
So what's the catalyst for a re-rating? No-one wanted to buy them when they put themselves up for sale last year.... |
The dividend yield at the current price is 5.75%. |
We published a new note today on Vp plc who published in-line numbers & a positive outlook, despite experiencing softer conditions in some end markets. Indeed impressively, FY’23 revenues, adjusted PBTA, EPS & ROCE came in at £371.5m (+6% vs LY), £40.5m (+4%), 79p (+11%) & 14.4% respectively. This reflects solid performances in UK infrastructure (e.g. energy, rail & water) and RMI, augmented by a bounce back in International (AirPac & TR), where EBIT margins expanded to 8.1% (+4.9%) on sales up 23.9% to £38.1m.
This puts the stock (at 650p) on attractive trailing EV/EBITDA, EV/EBIT & PE multiples of 4.3x, 8.6x and 8.2x – whilst similarly paying a generous 4.2% dividend yield. We believe this is simply too cheap for a best-in-class, GDP resilient business with a proven track record.
Link to our research report here: |
This is looking cheap, very unloved ! |
 On track to again grow profitably in FY’24 (new note from Equity Development)
Today’s “in line” FY23 trading update from Vp reiterates that it had made “good progress within its core markets” since the interims in Nov’22. It has benefitted from strength in civil engineering (eg highways) and infrastructure (eg water, rail & energy), alongside successfully lifting prices to cover input inflation as well as rightsizing some parts of the group to further reduce costs.
Elsewhere, the international energy & testing divisions also performed well, while residential housing has stabilised at lower levels - partly supported by robust RMI activity where millions of properties need modernisation.
As such, we retain our projections and £11.30/share valuation. Based on forecasted FY’23 revenues, adjusted PBTA and EPS of £365.5m, £40.2m & 75.9p (+6.5% YoY) respectively - climbing to £376.5m, £43.3m and 81.3p (7.2%) in FY’24. This in turn puts the stock (at 670p) on attractive FY’24 EV/EBITDA, EV/EBIT & PE multiples of 4.2x, 8.2x and 8.2x – whilst paying a 6.0% dividend yield. We believe this is simply far too cheap for a best-in-class, economically resilient business with a proven track record through thick & thin. |
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