YOUR SHARE TIP FOR 2002

Take a look at this bit of research, I think it’s an excellent new year buy.

This company meets all of Jim Slater’s criteria as a buy for growth.

They are not talked about much anywhere, is this because there is nothing to get excited about?, or is it an undiscovered gem??

Opinions please.


VP PLC
( VP.)

Current mid-price 93p
Support Services Sector

Fundamentals;

PEG 0.25
PER 8.68
CASHFLOW/EPS 7.1
GEARING 27%
REL STRENGTH 12mths 113%
1 mth 9%
ROCE 4.4%
EPS GROWTH RATE 34.5%
3 YR EPS GROWTH 116%
PSR 0.69
NAV P/S £1.03
DIVIDEND YIELD 4.38%

46.2 MILLION 5P ORDS
INSTITUTIONAL HOLDINGS OF 65.27%

RECENT DIRECTOR AND INSTITUTIONAL BUYING



History

Vp’s history goes back over almost 50 years to the original plant hire company founded in Harrogate in 1954 by Fred Pilkington, Grandfather of the present Chairman. The company, Vibratory Roller and Plant Hire (Northern) Limited, quickly grew to offer a broad range of non-operator equipment.

By the 70’s, the company eventually reached the point where significant funding was required to facilitate further expansion, and obtained a London Stock Exchange listing in 1973. The depot network was expanded to give national coverage and new product ranges were introduced.

The company’s first overseas acquisition of Florida Hi-Lift was made in 1982. Florida Hi-Lift, an aerial access platform hire and sales company, renamed American Hi-Lift, grew to become one of the largest rental businesses in North America

After undergoing major restructuring in the late 90’s, American Hi-Lift, the U.S. aerial lift business, was sold in 1996 to facilitate further expansion within the U.K. market. Later that year, the company made its first tool hire acquisition; Cannon Tool Hire, a six depot operation in Kent.

Into the Millennium, through organic growth and acquisition, Vp now operates an ever expanding national tool hire operation from over 80 depots throughout the U.K., working alongside the company’s market leading business units of; Torrent Trackside, Groundforce, Safeforce, Airpac and UK Forks.




Vp plc: Interim Results


Vp plc, the specialist equipment rental group, announces its interim results for the six months ended 30 September 2001:

● Turnover of £31.9m (2000: £29.7m including terminated operations)
● Group operating profit before goodwill amortisation of £3.4m (2000: £1.5m including terminated operations)
● Earnings per share, before amortisation of goodwill, of 5.02p (2000: 1.38p)
● Recommended interim dividend of 1.4p per share
● Net debt of £9.8m (31 March 2001: £12.8m) representing gearing of 22%
Post Period End
● Purchase of assets and goodwill of the shoring business of Mechplant for £3.1m
● Support Services re-classification


Jeremy Pilkington, Chairman & Chief Executive, comments:

“I believe that the actions we took last year, to exit from the low margin general plant hire sector, have been justified as we begin to enjoy improved returns within the Group.

Notwithstanding the background uncertainties about the state of consumer confidence and the more specific uncertainties posed by the winter trading period, your board believe the Group is well placed and look forward to a satisfactory result for the year as a whole.”



CHAIRMAN’S STATEMENT

I am pleased to report our first set of interim results since the exit from general plant rental activities last year. Turnover in the six months ended 30 September 2001 rose to £31.9m; turnover in the prior period, excluding £3.6m of revenue generated from terminated activities was £26.1m, an underlying increase of 22%.

Operating profit before goodwill amortisation more than doubled to £3.4m (2000: £1.5m) and profit before taxation increased to £2.9m (2000: £0.9m). Earnings per share before goodwill amortisation rose to 5.02p (2000: 1.38p).

Cash inflow from operating activities was £7.3m (2000: £2.7m). Net debt at 30 September 2001 was £9.8m (31 March 2001: £12.8m). This represents gearing of 22% on shareholders’ funds of £45.3m.

Your Directors are recommending payment of a maintained interim dividend of 1.4p per share payable on 7 January 2002 to shareholders registered as at 7 December 2001.

I am pleased to advise shareholders that the company has been re-classified by the FTSE under Support Services with effect from 19 November 2001, better reflecting the current composition of group activities.

SERVICES DIVISION

● Turnover £12.1m (2000: £14.4m)
● Operating profit £1.3m (2000: £125,000 loss)
● Investment in rental fleet £3.5m (2000: £9.0m)

Prior year comparatives include terminated activities.

UK Forks
UK Forks has continued the successful expansion of its specialist rough terrain materials handling business, utilising last year’s significant capital investment to secure longer term customer contracts and strengthen its market share position.

The consolidation amongst the national house builders, a key customer segment for the business, is accelerating the trend towards longer term negotiated supply agreements. UK Forks, as the only national specialist hirer and with its unique central reservations system, is well positioned to capitalise on the opportunities presented by this type of work.

Groundforce
Groundforce experienced a quiet start to the year. The water industry’s latest 5-year asset management plan (AMP3) was slow to translate into contracts awarded and further delays arose in rural areas as a result of the foot and mouth epidemic. However, I am pleased to say that more recent trading has shown signs of improved activity levels and we remain confident of the prospects for this business for the year as a whole.

As previously announced, in October we acquired the assets and goodwill of the shoring business of Mechplant Ltd, a part of the Shepherd Building Group, for a consideration of £3.1m. This activity has now been integrated within Groundforce and the combined business, trading as Groundforce Mechplant, has got off to a good start. This acquisition achieves our strategic objective of market leadership in this specialist field and will make a positive contribution in the current financial year.

Airpac
A slow start in the offshore oil and gas sector combined with continuing competition in our traditional onshore markets resulted in a weak first half for Airpac.

More recently, we have secured significant domestic and overseas contracts which will underpin the performance in the second half.

Safeforce
Last year’s re-branding of our safety equipment rental business has given Safeforce a solid basis for growth in this rapidly expanding market. We are now seeing the fruits of the prior year’s investment and look forward to a strong performance for the year as a whole.

Safeforce has recently launched UK Training, a national safety training business which we believe will provide valuable additional revenue opportunities in the future.

HIRE STATION
● Turnover £16.2m (2000: £12.7m)
● Operating Profit £1.4m (2000: £1.2m)
● Investment in rental fleet £2.9m (2000: £3.8m)

Since the beginning of the year, our tool hire activities have been operating under the single national identity of Hire Station. Building on the pre-existing strong regional identities of our tool hire network, Hire Station has been well received by customers and staff alike, as it develops a national infrastructure.

Hire Station One Call, our premium service national hire desk, has continued to grow strongly, winning customers over to its simplified ordering procedure and value added services.

Seven new branches have been added during the period, including the further expansion of our specialist Lifting Point service. In August we acquired the assets of a single branch tool hire business in Cardiff, giving us our first outlet in Wales.

TORRENT TRACKSIDE

● Turnover £3.6m (2000: £2.6m)
● Operating Profit £0.7m (2000: £0.4m)
● Investment in rental fleet £0.6m (2000: £0.4m)

Investment over the last two years in quality systems, training and expansion of the rental fleet offering have provided a platform from which Torrent has produced a very strong performance in the first half of the year.

Despite the recent uncertainty over the future structure and ownership within the rail industry, we believe Torrent is very well placed to capitalise on the significant workload associated with regeneration of the rail network infrastructure over the coming years.


OUTLOOK

I believe that the actions we took last year, to exit from the low margin general plant hire sector, have been justified as we begin to enjoy improved returns within the Group.

Notwithstanding the background uncertainties about the state of consumer confidence and the more specific uncertainties posed by the winter trading period, your board believe the Group is well placed and look forward to a satisfactory result for the year as a whole.



J.F.G. PILKINGTON
Chairman & Chief Executive