Vp Share Discussion Threads

[kingston78] 19/6/2019 13:27

Depreciation is a major component of cost of sales in the plant hire industry.
Amortisation (of goodwill on acquisition and other kinds of goodwill and intangibles) is also a recurring charge to the Profit and Loss account. It is more so as VP is building up its businesses via acquisition rather than by organic growth.

Turnover will obviously increase as the group expands. Other performance measures will obviously improve because they are stated pre-amortisation and pre-depreciation, and also pre-interest. These measurements flatter the results of the trading divisions. Moreover, a lot of central costs etc are charged to the Holding Company and anything that may be classified as Exceptional will be charged as such to flatter the divisional results.

In short, the divisional results are not as good as they are portrayed to be.

You need to look at cash flow,net debts and the overall Balance Sheet to gauge the financial health of the Group. Growing by acquisition and by debt has many weaknesses.

On trading practices and allegation of price fixing, the CMA will no doubt carry out a detailed investigation and act accordingly.

[1pvh] 11/6/2019 16:20

Big movement today, maybe tipped somewhere? Still decent value

[edmonda] 04/6/2019 08:11

Agreed : record results from with revs £382m +26%, PBT +15%, EPS 95.1p +16% and div 30.2p +16%. Acquisition of Brandon Hire already working out well.

Updated research now out from Equity Development with forecasts and £11.50 fair value / share retained.

free access here@:

[1pvh] 10/5/2019 08:26

See this is moving up a bit now. If the fine and findings aren't to harsh in the price fixing case it could go back to £10 +Still only be on a pe of 10 and a decent yield 60 year old business

[martinc] 16/4/2019 11:26

Obviously there's a huge uncertainty here, but I wonder if this is oversold now.. though it'd be brave to buy now I suppose.

Here's the CMA's case:



"The CMA provisionally considers that MGF and VP were involved during three periods between 23 September and 4 October 2011, 14 February to 24 November 2014 and 12 November 2015 to 28 November 2016, and that Mabey was involved between 14 February to 16 July 2014."

The scale of fines seems to relate to: turnover during the period concerned - ie maybe the year 2016. There are multipliers for the length of time, and for whether they instigated any cartel or not. From a quick read, I feel a fine would be in proportion to Groundforce's turnover during c. 2015/1016, not the whole VP group, but I may well be wrong there.

Apart from damage to their reputation, I don't think this will effect future profitability directly. Though a fine will of course add a slug of debt to the balance sheet.

[pugugly] 09/4/2019 12:09

Vp shares hit by construction cartel probe See BBC business news
Also if profits have been inflated due to cartel actions then (imo) margins will be squeezed once cartel is dismantled PLUS of course the penalty coss (if fined) will be a one off hit.

[mammyoko] 09/4/2019 07:34

CMA fine looking likely here. Although likely to be small, could see negative reaction

[chalkyboard] 08/4/2019 08:35

Thanks edmonda. Really appreciate all the sector multiples, which suggest there is further to run on Vp.

Also liked the bit on downside resilience given the Brexit impasse in Westminster - "if the equity markets become increasingly choppy again over the next few months, then we think tucking away consistent high-performers like Vp on any dips, should prove to be a lucrative strategy."

[edmonda] 08/4/2019 08:19

Update today of further progress in recent trading and Brandon Hire integrating well. FY to end March seen in line, with results due 4 June.

Equity Development research note just out with raised fair value share price, freely accessible here:

[chalkyboard] 27/11/2018 13:46

Many thanks edmonda. 13% LFL sales growth means VP must be winning market share hand over fist. Any ideas why?

Combination of specialist plant hire (vs commodity), good management, regional focus, B2B (ie not B2C), large projects (Hinkley point), rivals (eg SDY, A-Plant & HSS) focusing on self-help (as opposed to organic growth), etc?

[edmonda] 27/11/2018 08:17

another good set of interims from @Vpplc : revs +42%, PBT £25.9m +22%, EPS 52.3p +18%, interim div 8.2% +21%. Chairman looking forward 'with every confidence.'

Updated ED research note and retained fair value now out, freely available here:

[tell sid] 18/8/2018 09:39

Good results so continue to hold as long as the chart is ok.

[edmonda] 07/8/2018 13:34

Equity Development's research note on VP by analyst Paul Hill

Read the full note here ...

House prices are almost as British as fish & chips. Hardly surprising really, given in total residential property is worth a staggering £7.1 trillion (source: Savills), or >4x GDP. So what’s the latest word on the street? Well despite being buffeted in Q1’18 by the country’s other favourite topic, the weather – the recent outlook from the nation’s housebuilders appears to be positive. The UK construction industry rebounded 2.9% in May, led by ‘new build homes’ which were up 8.4% on LFL terms.
Going forward, we expect activity levels to remain supportive - albeit slightly less so in central London, which has greater BREXIT exposure and much higher property values. This positive outlook underpins our forecasts for specialist plant hire group Vp, who released an upbeat trading statement this morning ahead of its AGM.
Here, the company has enjoyed an encouraging 1st four months, with its core UK infrastructure, housebuilding & construction markets demonstrating solid demand. The integration of Brandon Hire is also progressing to plan.
Elsewhere, there has been a “modest recovery” in the overseas oil & gas business (Airpac Bukom) reflecting improved crude prices, allied to good trading at the AsiaPac test & measurement operation.
Consequently, we make no change to our numbers, but nudge up the valuation to £11.00/share from £10.70 - based on a 12x EV/EBIT multiple, which is consistent with sector EV/EBITDA averages of 6.4x.

[edmonda] 02/8/2018 16:17

Equity Development's research note on VP by analyst Paul Hill

Read the full note here ...

House prices are almost as British as fish & chips. Hardly surprising really, given in total residential property is worth a staggering £7.1 trillion (source: Savills), or >4x GDP. So what’s the latest word on the street? Well despite being buffeted in Q1’18 by the country’s other favourite topic, the weather – the recent outlook from the nation’s housebuilders appears to be positive. The UK construction industry rebounded 2.9% in May, led by ‘new build homes’ which were up 8.4% on LFL terms.
Going forward, we expect activity levels to remain supportive - albeit slightly less so in central London, which has greater BREXIT exposure and much higher property values. This positive outlook underpins our forecasts for specialist plant hire group Vp, who released an upbeat trading statement this morning ahead of its AGM.
Here, the company has enjoyed an encouraging 1st four months, with its core UK infrastructure, housebuilding & construction markets demonstrating solid demand. The integration of Brandon Hire is also progressing to plan.
Elsewhere, there has been a “modest recovery” in the overseas oil & gas business (Airpac Bukom) reflecting improved crude prices, allied to good trading at the AsiaPac test & measurement operation.
Consequently, we make no change to our numbers, but nudge up the valuation to £11.00/share from £10.70 - based on a 12x EV/EBIT multiple, which is consistent with sector EV/EBITDA averages of 6.4x.

[edmonda] 05/6/2018 08:30

another strong set of FY results: adj PBT £40.6m + 16%, EPS 81.8p +18%, div 26p +18%; plus a 'positive start' to new year.
Full updated ED research note now out from Paul Hill, freely available at



All investors should make their own decisions, Mr Highlands, but this analyst's opinions on Vp in the last 4 years haven't been too far wrong

[tudes100] 01/6/2018 00:57

Lots of buys after 3.30pm today, leaky leaky pre results ??

[brummy_git] 07/4/2018 17:46

Here you go Highlands - worth a read from Paul Scott on the value (especially post Mifid II) of paid-for-research

hxxps://www.stockopedia.com/content/problems-caused-by-mifid-ii-297523/

[my retirement fund] 07/4/2018 07:11

Unusual jump in share price given it's in an establishing downward trend. Any reason ?

[highlands] 06/4/2018 09:37

Edmondo, that is a non-independent analyst report usually commissioned by tge company itself! Read the section right at the end!

[edmonda] 06/4/2018 08:40

Solid update (again) released today ahead of results 5th June.

Co says 'good progress over winter period' and FY results to end March seen to be 'in-line'.

New ED research note (unchanged forecasts and undervalued view of shares) freely available here:

[edmonda] 06/4/2018 08:37

Very solid update (again) released today ahead of results 5th June.

Co says 'good progress over winter period' and FY results to end March seen to be 'in-line'.

New ED research note (unchanged forecasts and undervalued view of shares) freely available here:

[grahamburn] 20/2/2018 20:47

The history of the share price and its consistent returns in terms of capital growth (well over 220% in the past 6 years) and a reasonable income would, with all due respect, seem to contradict your thesis.

Add to that a very considerable beneficial shareholdings of the Founder/Chairman (50% plus), and IMO his interests are very closely aligned to other shareholders.

Finally, kingston68, you seem to have a unhealthy fixation with this share (and the company's supposed financial engineering) which is decidedly suspect. In any event, your prolific posting is clearly not having much of an effect on the other participants on this board (ie you seem to be ignored). Perhaps you should apply your energies elsewhere, as it would seem unlikely that you have any interest in investing in "such as suspect company".

IMV that is undoubtedly a sound response, so will not be responding to any of your posts in the future.

[kingston78] 20/2/2018 15:46

You may call me biased, but I am simply speaking the truth. Many people don't understand accounts and those investors rely on what they read in the company's reports. Quite understandably, the directors would like to emphasise the good points and hide the bad points. Some companies pay a dividend even when they have a large pension deficit, for example, to appease investors. This is a political game.

I have analysed the accounts of VP and its main trading subsidiaries. The trading subsidiaries did not perform as well as the way they have been glossed over because the parent company cross charges tiny amount of directors' remuneration to those subsidiaries even though they spent a lot of time on them. Similarly, those subsidiaries receive large interest-free loan from the parent company. Whilst the Group results would be the same, the reporting on individual subsidiaries has been distorted, ie their results have been flattered.

VP continues to chase growth by acquisition. This is a piece of financial engineering to increase earnings per share using cheap debts. This strategy works well whilst the going is good but is not sustainable in the long term because things go in cycle. How is the Group going to service the debt mountain in an economic downturn? VP is not and will not be the last company adopting this type of acquisition strategy until they fall on the own sword some years down the line.