Harrogate-based equipment rental group Vp plc said it expected to report a drop in profit for the year, as end markets remain slow, and announced the acquisition of Irish plant hire business Charleville Hire and Platform Ltd.
In a trading statement on the first half of the year, Vp said due to market headwinds in construction and housebuilding” and a slow start to UK rail spending, it now expected full-year profit before tax and certain items to be about £37 million. That is below the £39.7 million it reported last year.
At the same time, Vp said it has bought Charleville Hire and Platform Ltd, an Irish plant hire business, for an initial payment of €12.1 million for 90% of its shares, with the remaining 10% to be acquired over a three-year period. Subject to business performance against EBITDA targets, a further maximum payment of €21.7 million may be payable across the second and third anniversaries of the acquisition.
Anna Bielby, Chief Executive of Vp, said: “This acquisition is exactly in line with our renewed strategic focus on building our highly differentiated, specialist customer offering. CPH brings to the Group a market-leading powered access fleet in a growing Irish market while complementing our existing divisions. The CPH management team has a track record of successfully growing the business and, with the opportunities that exist in the Irish market, we believe they are well placed for further expansion in the future.”
Commenting on current market conditions, Vp said: “The Infrastructure market continues to be supportive with year on year growth and strong demand in transmission, water and civil engineering. While there has been a slower than anticipated rollout of projects following the beginning of the new Network Rail Control Period, CP7, the Group remains positive around its opportunities within the rail sector.”
“Non-residential Construction activity remains subdued. In Brandon Hire Station, while progress continues to be made by the new management team, planned improvements to the performance of the business have been slower than anticipated. Growth in Construction redevelopment projects has been encouraging, notwithstanding the tough credit environment and the impact of recently announced administrations in the sector.”
“Despite continued short-term softness in Housebuilding, Vp is encouraged by the UK Government’s push for rapid progress in this area. Additionally, the Energy market remains positive, with strong demand and a good level of project activity.”