LONDON (ShareCast) - (Sharecast News) - Vp delayed a decision on its dividend after the Covid-19 crisis affected trading in the first two months of the equipment rental company's financial year.
Pretax profit for the year to the end of March fell to £28.8m from £33.6m a year earlier as revenue declined 5% to £362.9m. Pretax profit excluding exceptional items and amortisation rose to £47.1m from £46.8m.

VP paid no final dividend and said it had delayed its decision until later in the current financial year because of the coronavirus emergency. The company withdrew financial guidance.

The company paid an interim dividend of 8.45p a share in January. The previous year it paid a total dividend of 30.2p a share.

Vp said its results were solid bearing in mind economic uncertainty created by Brexit and the general election during the period. Vp, which rents equipment such as forklift trucks and excavation supports to the construction industry, said it had expected business to pick up in 2020 after the election reduced Brexit uncertainty but that the Covid-19 crisis had hit trading.

With many building sites shut during the Covid-19 lockdown, trading in April was very weak, Vp said. Business picked up in May as sites started to reopen and the recovery will be slow and step-by-step over the coming months, the company added. Vp trades in Australia, Malaysia, New Zealand, Germany and several other countries as well as the UK.

The board and senior management, totalling 50 people, have taken a 20% salary cut until the end of June and many employees are working a four-day week until demand increases, Vp said. It mothballed some sites and furloughed about half of UK employees in April. With healthy cashflow the group has enough financial headroom, it said.

Chairman Jeremy Pilkington said: "The results up until 31 March 2020 can be considered a very satisfactory performance ... achieved against a highly uncertain economic backdrop with the UK being distracted by Brexit and the general election in December 2019.

"Owing to the exceptional circumstances of Covid-19, the board has decided to delay the decision on a dividend until later in the year when the group would hope to have better visibility of the overall situation. The board appreciates that income is of vital importance to shareholders and we intend to restore normal patterns of distributions as soon as possible."

Since April Vp has taken UK employees out of furlough as it has reopened sites, it said.

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