What do UK investors most want for Xmas? Well given the angst from the US/China trade spat, UK General Election and Brexit ‘limbo’, we suspect greater clarity would be towards the top of Santa’s list. The good news is that we think much of this uncertainty could be resolved over the next few months, providing not only a welcome boost to capital investment - but also a lift to specialist plant hire firms like Vp, who posted resilient H1’20 numbers this morning.
Here adjusted EBITDA, PBTA and EPS (see below, pre IFRS 16) were all flat YoY at £51.8m (+0.4%), £25.9m (+0.3%) and 52.5p (+0.2%) respectively, despite strong comparatives and turnover easing -3.4% to £186.6m. The latter reflecting softer conditions in commercial construction & civil engineering (eg London & the South East - exacerbated too by completion of the 5-year Water (AMP 6) & Rail (CP5) programs. Albeit equally offset by higher EBIT margins (15.2% vs 14.6% LY) thanks to Brandon synergies, tight cost control and improving demand at Airpac Bukom (oil & gas), where new fleet has been ordered.
Elsewhere, both UK infrastructure & housebuilding held up well, mirroring nearrecord employment, low borrowing costs, a competitive mortgage market and the popular Help to Buy scheme. Meanwhile overseas, TR Pty (test & measurement) delivered solid results in Malaysia & Singapore, but experienced tougher trading in Australia.