Vp plc Annual Report and Accounts 2024
Specialist capabilities
for critical projects
We are Vp Group.
Specialists in equipment
rental. When customers
need exceptional capabilities
they turn to us.
For 70 years we have delivered for our customers – safely, efficiently,
responsibly – with no short cuts or half measures. They trust us with
exceptional requirements where complexity and constraints demand
capabilities beyond the ordinary. They rely on our specialist solutions
to create and care for projects that allow economies to grow.
We focus on niche sectors principally in the Infrastructure,
Construction, Housebuilding and Energy markets.
Visit our new corporate website:
www.vpplc.com
Front cover image: Leon Grimshaw, Torrent Trackside
Financial highlights
Group revenue
£368.7m
Return on average capital employed1
14.5%
(FY2023: £371.5m)
(FY2023: 14.4%)
£350.9m
2022
£371.5m
£368.7m
2023
2024
14.5%
2022
14.4%
14.5%
2023
2024
Adjusted profit before tax,
amortisation, impairment
of intangible assets and
exceptional items1
£39.7m
Statutory profit
before tax1
£2.8m
(FY2023: £40.5m)
(FY2023: £30.7m)
£38.9m
2022
£40.5m
£39.7m
2023
2024
£35.6m
2022
£30.7m
£2.8m
2023
2024
Adjusted basic earnings
per share1
74.8p
Statutory basic (loss)/earnings
per share
(13.4p)
(FY2023: 79.0p)
(FY2023: 58.1p)
71.2p
2022
79.0p
74.8p
2023
2024
64.5p
2022
58.1p
(13.4p)
2023
2024
Dividends per share
39.0p
Net debt excluding lease liabilities
£125.2m
(FY2023: 37.5p)
(FY2023: £134.4m)
36.0p
2022
37.5p
39.0p
2023
2024
£130.6m
2022
£134.4m
£125.2m
2023
2024
Contents
Strategic Report
Financial highlights
01
Group at a glance
02
Our investment case
04
Chair’s statement
05
Q&A with the Chief Executive
06
Market review
08
Business model and strategy
10
Our strategy
12
Key performance indicators
13
Business review
14
Financial review
22
Stakeholder engagement
24
Environmental, social and governance 26
TCFD
42
Risk management
51
Viability statement
56
Non-financial and sustainability
information statement
56
Corporate Governance
Board of Directors
60
Governance at a glance
61
Corporate governance report
62
Nomination Committee report
65
Audit Committee report
67
Remuneration report
70
Directors’ report
85
Independent Auditors’ report
88
Financial Statements
Consolidated income statement
96
Consolidated statement
of comprehensive income
97
Consolidated statement of
changes in equity
98
Consolidated balance sheet
99
Consolidated statement
of cash flows
100
Parent Company statement
of changes in equity
101
Parent Company balance sheet
102
Parent Company cash flows
103
Shareholder Information
Five-year summary
142
Alternative performance measures
143
Directors and advisers
144
1 These measures are explained and reconciled in the Alternative Performance Measures section on page 143.
01
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Group at a glance
Vp plc is a leader in equipment rental. We are expert providers of equipment, people, services
and support for specialist projects. We focus on niche sectors principally in the Infrastructure,
Construction, Housebuilding and Energy markets and operate in the UK and overseas.
Our values are the guiding principles of how we operate: focused, agile and fair.
Where we operate
70 YEARS
of heritage
Commitment to reach
net zero
across the value
chain by 2050
Read more on page 38
Germany
United
Kingdom
Ireland
Australia
and New
Zealand
Malaysia
and
Singapore
83,000+
Global customers
£256.9m
Net book value of
property, plant and
equipment
£62.8m
Investment in rental
assets in FY2024
2,750+
Employees
200+
Branches
01
02
03
UK coverage
with local leadership
Market-leading
specialist teams
Young, fit-for-
purpose hire fleet
04
05
06
Proactive fleet
management with
satellite tracking
Industry-leading
safety experts
Trusted by leading
customers
07
08
09
Omni-channel
customer support
Competitive
pricing
Flexible hire
times
Why customers buy from us
• property
02
Vp plc Annual Report 2024
Markets by division
Infrastructure: Rail, highways, utilities and other key
infrastructure projects
Construction: Non-residential construction, including
commercial offices, warehousing and distribution
Housebuilding: Private and public sector residential
housebuilding within the UK
Energy: Oil, gas and energy production both onshore and
offshore across the UK and International
Others: Events, defence and aviation
Revenue breakdown by region
65%
10%
3%
10%
2%
10%
39%
41%
8%
7%
5%
Infrastructure
Construction
Housebuilding
Energy
Other
UK
Europe
Australasia
Africa
Asia
Other
Capex analysis
45%
33%
22%
Zero emissions at
point of use
Cleaner technology
Other investment
03
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Key differentiators
Financial profile
Specialist rental model
• Specialist assets, markets and delivery
• Market-leading positions in niche sectors
• Young, well maintained fleet
• Disciplined asset management
Continued strong returns
• Target ROACE of 15%
• Strong margins
£62.8m
Fleet investment in FY2024
14.5%
ROACE
Diverse and resilient revenue streams
• Growth and risk mitigation from exposure to different
markets and geographies
Balance sheet strength
• Disciplined capital allocation
• Cash generative, refinance complete
£368.7m
Revenue
£108.7m
Cash generated from operations
Exciting growth prospects
• Aligned to markets with growth potential
• Opportunity to improve cross-divisional working
• Refreshed corporate development plan
Progressive dividend
• 30-year uninterrupted dividend track record
• Long-term view
39.0p
2024 dividend
04
Vp plc Annual Report 2024
Our investment case
We have a long-term track record of
successfully delivering sector-leading
results for all our stakeholders.”
At the Annual General Meeting, scheduled to be held on
Thursday 25 July 2024, the Board will be recommending payment
of a final dividend of 27.5 pence per share (2023: 26.5 pence per
share) making a total for the year of 39.0 pence per share (2023:
37.5 pence per share). Subject to shareholder approval, it is
proposed to pay the final dividend on 7 August 2024 to members
registered at 21 June 2024. This proposed level of dividend
is based on our policy to distribute on a two times covered
earnings basis over the cycle and having due regard to future
prospects.
As previously announced, after 26 years with the Company
and latterly 19 years as Managing Director and CEO, Neil
Stothard retired from the Board at the end of September 2023.
I wish to repeat on behalf of myself, the Board and the wider
employee and shareholder audience, our appreciation of Neil’s
contribution over this period.
Anna Bielby, who joined as Chief Financial Officer (CFO) in
January 2023, was appointed to the position of Chief Executive
from 1 September 2023 and has made an immediate positive
impact in her new role. Anna is bringing a welcome new energy
and strategic oversight to the Group and I look forward to
working with her as she drives the business forward.
Keith Winstanley joined as CFO on 1 January 2024, and we
look forward to working with Keith in the months and years
ahead.
In addition to these Board changes, we have simplified the
senior management reporting structure, established an
Executive Committee, and significantly strengthened the
central senior management team in a number of key roles.
As always the skills and commitment of our employees lie
behind everything we achieve as a business. Our people bring
specialist skills, technical prowess and sharp focus to delivering
the right solution for our customers. We continue to promote
our extensive apprentice and graduate schemes which provide
advancement and career progression opportunities and to
emphasise recruitment policies which support diversity in the
workplace.
It is therefore my pleasure on behalf of the Board to thank all
our employees for their hard work and commitment during the
year that has made these results possible.
Jeremy Pilkington
Chair
4 June 2024
Jeremy Pilkington
Chair
I am pleased to report a solid overall
performance for the Group despite the particular
challenges that we have faced in the UK General
Construction market. Elsewhere, our international
and infrastructure operations have enabled the
majority of our business to move forward strongly
in the period.
For the year ended 31 March 2024, adjusted profit before tax,
amortisation, impairment of intangible assets and exceptional
items1 eased marginally to £39.7 million (2023: £40.5 million)
on revenue broadly in line at £368.7 million (2023: £371.5
million). Whilst it is never pleasurable to report a reduction
in profitability, we believe that under the circumstances, this
represents a good result demonstrating once again the ability
of our diversified business exposure to deliver resilient profit
in spite of localised challenges. Reflecting the challenges faced
by the UK Construction market, we have taken £27.7 million
non-cash impairment charge against intangible assets, including
goodwill, in the Brandon Hire Station business, referenced in
more detail later.
Capital investment in the rental fleet was slightly ahead of prior
year at £62.8 million (2023: £59.9 million) as we continue to
support specific investment opportunities with an ongoing
emphasis on transitioning towards more environmentally
friendly solutions. Year end net debt excluding lease liabilities1
was £125.2 million (2023: £134.4 million). Return on Average
Capital Employed1 was 14.5% (2023: 14.4%), in line with our
long-term target, an excellent result, which reflects once again
the underlying quality of the Group’s earnings. Adjusted earnings
per share1 of 74.8 pence per share (2023: 79.0 pence per share)
includes the impact of the 6% increase from 19% to 25% of UK
Corporation Tax rate.
1 These measures are explained and reconciled in the Alternative
Performance measures section on page 143.
05
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Chair’s statement
with Anna Bielby
Chief Executive
Q
What have been your priorities in your
first year as CEO of Vp?
I was really excited to step up to the CEO role in September.
I already knew that Vp was a great business from my time as
CFO and I jumped at the chance to lead the business into its
next phase.
New leadership represents a change for Vp and, like all change,
needs to be managed carefully. My job is very much to build on
the foundations and rich heritage of the Group, including the
strong track record of our specialist divisions.
One of my first priorities was to bring a fresh perspective and
energy to the business through the recruitment of new talent
and the formation of an Executive Committee. I am happy that
the blend of knowledge and experience, coupled with some new
recruits, positions us well to take the business forward.
Our strategy is centred on driving growth and operational
excellence. This is supported by a refreshed People strategy, a
new digital roadmap and a focus on using the Group’s scale to
improve efficiency.
Q
What actions did you take during the year to
address the challenges faced by the Company?
Given the challenging Construction market, we performed
a review of Brandon Hire Station and made changes to the
management team. The new Brandon team is making good
progress on refocusing the business and reducing its cost base.
We have reviewed the Group’s operating model to ensure that
it is appropriate and set up to best support our customers.
While recognising the distinctiveness of our specialist
businesses, we need to drive consistency and simplicity where it
makes sense to do so. This includes making sure that our central
functions are fit for purpose and that we take advantage of the
Group’s scale to drive synergies, for example in the areas of
procurement and property.
We want Vp to be easy for our customers to do business with
and we have updated our digital roadmap to focus on improving
the customer experience and increasing collaboration between
our divisions.
During the year, we re-financed our bank facilities, providing a
solid platform on which to grow the business through organic
investment in our asset base, supplemented by disciplined M&A
activity.
Our colleagues remain at the heart of the business, but staff
turnover in our sector is always a challenge. We are currently
refreshing our People strategy to reinvigorate our culture, build
on the diversity of our teams and provide a safe and inclusive
workplace where people can build their careers.
We operate in a competitive, fragmented market but I believe
our specialist solutions, strong heritage and track record for
excellent service positions us well.
Q
What conclusions have you drawn from
the Brandon Hire Station review?
Brandon Hire Station has been exposed to both general macro-
economic conditions and the more challenging Construction
market. Its high operational gearing has made it more difficult
to manage market headwinds so action has had to be taken to
improve financial performance.
This includes implementing a number of revenue, cost and
process initiatives, including looking at the division’s physical
footprint, optimising its branch network, and aligning activities
and resources towards target customers.
Despite a challenging year, Brandon Hire Station remains a large
part of the Group’s revenue and plays an important part in
supporting some of our biggest customers.
06
Vp plc Annual Report 2024
Q&A
Q
What are the growth
opportunities for Vp?
Our specialist divisions operate across a number of end
markets and, as we have seen this year, this diversity underpins
the resilience of our business model. The performance of the
Infrastructure and Energy markets has been particularly strong
this year with notable contributions from Groundforce and
Airpac.
For the year ahead, we expect the Construction market to
remain challenging. but we see more opportunity in those
businesses aligned to the Infrastructure market where there is a
clearer pipeline of projects and opportunities.
We have a strong growth track record and a robust balance
sheet and we will continue to invest in our asset base to support
organic growth. We will target our investments towards market
opportunities and those areas that will support the achievement
of our target returns.
Our specialist divisions have strong individual market positions
and presence, and I believe that these can be further enhanced
through closer collaboration and working. This collaboration
will ensure that we are best placed to exploit opportunities
and grow.
From a corporate development perspective, we will look for
bolt-on acquisitions to existing divisions and will consider
carefully any strategic opportunities in markets and products
that complement the wider Vp Group. We will do this in a
disciplined manner and based on our strict financial hurdles.
Q
Where does ESG fit into your strategy
and how is engagement with the supply
chain and customers progressing?
We embrace ESG in how we do business every day. We are
committed to working closely with our customers and suppliers
to meet our own sustainability objectives and to help them
achieve theirs.
Fundamentally, the rental industry, by definition, operates
a circular business model. It fulfils all the circular economy
principles and, by doing so, minimises the negative
environmental impact of equipment. We are working with our
customers to help them address their own supply chain carbon
footprint, for example with the use of our carbon calculators.
Our approach to ESG is shaping our capital investment. A
significant proportion of our fleet is zero emissions at the point
of use, and we continue to transition our fleet towards battery
powered alternatives, where available and where the returns
mean that it is sensible to do so.
Our supply chain engagement is progressing well, often
highlighting new products and developments that can help
reduce their own carbon footprint.
In November 2023, we were pleased to have our near-term,
long-term and net zero targets validated by the Science-based
Targets initiative (SBTi), aligning our targets with the SBTi’s Net
Zero Standard and to a 1.5°C trajectory.
This year, we are turning our attention to our social value
strategy where we will look to make further progress.
Q
What makes Vp special?
Vp’s heritage is important. We have worked with customers for
over 70 years – safely, efficiently, responsibly. Our specialisms
across a wide range of markets combined with our values provide
the backbone of how we operate. Our focus on what our
customers need is at the heart of how we operate and our teams
work tirelessly with them to address those ever-changing needs.
We are ready to mobilise our people, resources and capital at
scale and speed.
Our breadth of operations, diversity and talent of our teams and
our great asset management give us a powerful combination.
These have enabled us to keep long-standing relationships with
many customers, for which we are very grateful.
I am immensely proud of our teams and want to expand how Vp
can support and develop them so they can contribute their very
best, while feeling fulfilled in their progression and achievements.
Q
Looking ahead what are your priorities
for the coming year?
We have a great business and I’m confident that the actions we
are taking will enhance our performance this year. Our focus
is on continuing to grow the business and take advantage of
opportunities, particularly in those markets that are strong, for
example Infrastructure and Energy.
Our performance in our key markets of Infrastructure and
Energy remain encouraging but we are experiencing more
difficult markets in Housebuilding and General Construction,
where Brandon Hire Station mainly operates. I am confident
that the work that the new management team at Brandon is
undertaking will strengthen the business in the coming year.
Internally, our focus is on operational excellence - working to
drive efficiency through our digital roadmap and our group-wide
approach to areas such as procurement and property. We will
work in a focused and agile way to drive performance.
As we celebrate 70 years of Vp, our talented people will
continue to focus on delivering on exceptional customer
experience.
I look ahead to the year with a sense of excitement and cautious
optimism.
07
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Market review
Our markets are diverse and fragmented. Working across a range of sectors
provides us with resilience and opportunity for future growth.
39%
41%
8%
7%
5%
Infrastructure
Construction
Housebuilding
Energy
Other
Markets by division
Infrastructure: Rail, highways, utilities and other key
infrastructure projects
Construction: Non-residential construction, including
commercial offices, warehousing and distribution
Housebuilding: Private and public sector residential
housebuilding within the UK
Energy: Oil, gas and energy production both onshore and
offshore across the UK and International
Others: Events, defence and aviation
Infrastructure
Includes rail, highways, utilities and other key
infrastructure projects
The rail sector has been significantly disrupted across the UK
with industrial strike action throughout the year. Despite this,
progress continued on major projects including HS2 and the
TransPennine route upgrade.
With the cancellation of the northern legs of HS2, work
continued on the first phase despite major political concerns
over the ongoing viability of the project. Control Period 6 (CP6)
ended in March 2024, with the new Control Period (CP7),
now underway. CP7 brings significant project plans, outlined by
Network Rail, to support major projects and track improvement
plans.
Roads and highways projects overall experienced a decline
in 2023, with a number of projects postponed or delayed
into future periods. The minor decline of 1% through 2023, is
expected to become a double-digit decline through 2024 as
project schedules are delayed indefinitely due to continued cost
inflationary pressures.
The utilities sector has seen significant growth in the water and
sewage sub sectors, as unspent funds from Asset Management
Plan (AMP) 7 which comes to an end in March 2025, look to be
utilised during calendar year 2024, albeit at a slightly lower rate.
(Source: Experian Construction Forecast 2024).
08
Vp plc Annual Report 2024
Construction
Non-residential construction, including
commercial offices, warehousing and
distribution
Overall the non-residential construction market fell by 1.7%
through the year 2023.
There was a mixed performance between the different sub
sectors in non-residential construction, with the public sector
spending growing at a strong rate through the year 2023
particularly in the education and hospital sub-sectors, but with
new orders in the warehousing and distribution sub-sectors
falling by over 25% year on year.
Industrial construction experienced a year of decline, against
a strong growth period in the prior year, whilst commercial
construction, including offices and entertainment, experienced
double-digit growth in the year.
Retail spend remained in line with overall consumer spend,
showing another year of decline throughout 2024 and there is
an expectation of continued decline in 2024.
2023 saw a clear trend from new commercial builds to
commercial redevelopment, with a number of major existing
projects within London approved for redevelopment into
multi-use spaces.
Housebuilding
Private and public sector residential
housebuilding within the UK
2023 showed significant decline within the housebuilding sector
against a strong performance in 2021 and 2022. The inflationary
costs within the supply chain, poor consumer confidence, and
heightened mortgage interest rates all contributed to a double-
digit declining market throughout 2023.
The public sector housing market remained more buoyant than
the private sector, as housebuilders have used the reduced
market appetite to meet their affordable housing targets. It is
expected that, in line with an uncertain political outlook and
reduced local council spending, public sector housing spend will
decline in the calendar year of 2024.
The private sector Housebuilding market suffered a 14% year
on year decline, with interest rates for mortgages a significant
factor impacting demand.
Private housebuilding was also affected by a number of
Government-backed house buyer schemes coming to an end or
being removed, again limiting demand. Private housebuilding is
expected to stay flat throughout 2024.
Energy
Oil, gas and energy production both onshore
and offshore across the UK and international
The oil and gas market in particular has seen significant levels
of spend and activity in the year, linked to the increase in oil
prices. This increase has driven more investment projects,
including the expansion and upgrading of existing sites. Globally,
there is significant investment into offshore, as well
as discovery of new oil reserves in emerging markets.
09
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Well-managed fleet
We aim to deliver high-quality returns to our shareholders and other
stakeholders, sustained over the long term while embracing our
environmental, social and governance responsibilities.
Our resources
Our strategy
Delivering growth
• Continued investment to drive organic
growth, focus on returns
• Improved cross-divisional working to
exploit opportunities
• Acquisition opportunity from refreshed
corporate development strategy
Driving operational excellence
• Driving simplicity and consistency
throughout operating model, supported by
digital roadmap
• Using the benefits of the Group’s scale to
drive value
• Appropriate balance between efficient
central functions and agile customer
centric divisions
People
• A unique mix of rich heritage, new
leadership and fresh ideas
• Recruiting, retaining and developing our
people who grow with us
• Rewarding our people fairly
Digital roadmap
• Modest investment in digital
• Building on what we already have
• Leading to better cross-divisional working,
customer experience and data and
decision making
ESG focus
• Important area for stakeholders
• A pragmatic approach
• Focus on capex and management of
supply chain
Well-managed fleet
We have an optimised asset management model with a focus on
zero emissions at point of use. We are a well-tuned operation,
ready to mobilise our people, resources and capital at scale
and speed.
Our people
The specialist knowledge of our teams is at the forefront of the
service we provide to our customers. We are an agile Group,
deliberately lean with responsive people who quickly solve
problems.
Our customer experience
We focus on our customers – the job in hand and their
changing needs, what really matters to them and where we
can make the difference. They trust us with exceptional
requirements where complexity and constraints demand
capabilities beyond the ordinary.
10
Vp plc Annual Report 2024
Business model and strategy
Materials Handling Specialists
Safety. Survey. Test & Measurement
Railway Plant. Railway People
Mechanical, Electrical & Low Level Access Specialist
Energy Industry Solutions
Specialist Construction Solutions
Portable Roadways
The UK’s Tool and Equipment Specialist
Locations close to the customer
National UK coverage across
over 200 locations, and a targeted
overseas presence
Customer first
Local relationships and customer
ownership, putting the customer at
the core of the branch network
Delivering specialist solutions
Harnessing the expertise of our
specialist divisions to deliver
tailored solutions for our
customers
Empowered divisional teams
Agile management teams with
autonomy to adapt quickly to
changing customer and market
dynamics. Close management of
metrics and KPIs
Efficient central functions
Operations supported by efficient
central functions, taking advantage
of scale and synergy
Focused digital investment
Targeted investment to drive
simplicity and efficiency and
improve the customer experience
Capital allocation
Disciplined allocation of funds
towards investment in assets,
growth activities and shareholder
returns
Our customers
We provide our customers with the right
knowledge, information and solutions,
drawing on the specialist skills of our
teams. We engage with the supply chain
on behalf of customers often bringing
new solutions to the fore through our
customer and supply chain engagement.
Our people
Our teams have an appetite for knowledge
and technical expertise, using their skills
to find the right solution. Our people
pride themselves on being plain-speaking,
reliable, ethical and good to deal with.
Our supply chain
We work with our supply chain to provide
feedback from customers and develop
new solutions in an ever changing market.
We also help them address their Scope 3
emissions.
Our communities and environment
Our branches and depots are located
in the heart of local communities. Our
colleagues are typically from the local
areas in which they work, strengthening
our ties to those communities.
Our investors
We aim to deliver sustainable returns
to our investors. We are proud of our
uninterrupted 30-year dividend track
record.
Our operating model
The value we create
Read more about Vp KPIs
on page 13
Read more about stakeholder
engagement on page 24
11
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Specialist provider in equipment rental – focused, agile and fair
Delivered through our strategic priorities and underpinned by our ESG and digital investment:
People
• A unique mix of rich heritage,
new leadership and fresh ideas
• Recruiting, retaining and
developing our people who grow
with us
• Rewarding our people fairly
Delivering growth
• Continued investment to drive organic growth
• Improved cross-divisional working to exploit
opportunities
• Acquisition opportunity from refreshed corporate
development strategy
Driving operational excellence
• Driving simplicity and consistency through operating
model, supported by digital roadmap
• Using the benefits of the Group’s scale to drive value
• Appropriate balance between efficient central functions
and agile customer centric divisions
Digital roadmap
• Modest investment in digital
• Building on what we already have
• Leading to better cross-divisional
working, customer experience
and data and decision making
ESG focus
• Important area for stakeholders
• A pragmatic approach
• Focus on capex and management
of supply chain
A straightforward business that works together simply to drive value
12
Vp plc Annual Report 2024
Our strategy
Financial and performance KPIs1
Group Revenue
£350.9m
2022
£371.5m
£368.7m
2023
2024
Definition
Group revenue from the hire of equipment and the provision of
goods and services to third-party customers during the year.
Adjusted EBITDA
£88.9m
2022
£92.9m
£91.0m
2023
2024
Definition
Operating profit less amortisation, impairment of intangible
assets and exceptional items, and depreciation (excluding
depreciation of right of use assets).
Investment in rental fleet
£59.8m
2022
£59.9m
£62.8m
2023
2024
Definition
Rental equipment purchased during the year to generate
revenue through customer hire.
ROACE
14.5%
2022
14.4%
14.5%
2023
2024
Definition
Return on average capital employed (ROACE) is based on
adjusted operating profit before amortisation, impairment
of intangible assets and exceptional items divided by average
capital employed on a monthly basis using the management
accounts.
Accident frequency rate
0.18
2022
0.26
0.18
2023
2024
Definition
The accident frequency is calculated by multiplying the number
of reportable accidents by 100,000 divided by the total number
of hours worked by colleagues.
Non financial KPIs
Alongside our refreshed strategy, we are reviewing our non financial KPIs during 2024. These will likely
include metrics covering health & safety, people, customer and ESG.
Total Group carbon inventory (market based)
N/A
2022
374,287 tCO2e
373,167 tCO2e
2023
2024
Definition
The data shows the Group’s total carbon calculations/emissions
inventory since reporting commenced in 2023.
1 These are explained further in the Chairman's statement on page 05 and in the Alternative Performance Measures page 143
13
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Key performance indicators
Results
The Group’s performance for the year ended 31 March 2024
was encouraging, with the delivery of a solid set of results
against the backdrop of mixed and challenging markets. This
year also represented a significant change for Vp with a new
Chief Executive and leadership team.
Our full-year result of £39.7 million adjusted profit before tax,
amortisation, impairment of intangible assets and exceptional
items1, represents a resilient performance underpinned by a
robust balance sheet, following successful refinancing of our
revolving credit facility in November 2023.
During the year, we continued to generate strong returns with
a Return on Average Capital Employed1 of 14.5% (2023: 14.4%),
slightly below our target level of 15%.
Market summary
Our specialist divisions operate across a number of end
markets and, as we have seen this year, this diversity underpins
the resilience of our business model.
The Infrastructure and Energy markets have been supportive
during the year, benefiting Groundforce and Airpac in
particular. In contrast, the more challenging Construction and
Housebuilding markets have significantly impacted Brandon
Hire Station, as well as affecting the performance of other
divisions, such as ESS and UK Forks. These businesses have
implemented division-specific action plans where needed,
which has led to some restructuring costs, included within our
exceptional costs of £5.8 million.
Strategy
Under new leadership, we have refreshed the Group’s strategy
and are focused on growing the business, underpinned by
operational excellence. During the year, we have established
an Executive Committee and simplified our management
structure.
Local agility and decision making have been key to Vp’s success
over the years and this is an important part of the specialist
solutions we have consistently delivered to our customers.
Our local teams will continue to be empowered to do what
they do best. Despite this, our structure carries cost and
complexity, and we believe that this offers opportunities to
drive greater simplicity and consistency. Focus areas include
a more group-wide approach to procurement, property and
digital investment improving the overall customer experience.
Our digital roadmap is focused on making our internal
processes as efficient as possible. It will also allow us to work
better across our divisions, therefore making it easier for our
customers to do business with us. Our digital approach will
be disciplined, with a focus on enhancing current capability,
supplemented by modest investment in those areas that give the
best returns across the Group.
Under new HR leadership, we have focused on our People
strategy, recognising the importance of our colleagues in
supporting our customers. This is particularly relevant given
the skills shortages which have been apparent across all of our
businesses and geographies this year.
We are strong asset managers, and we care for our assets
throughout their lifecycle. During the year, we invested
£62.8 million in our fleet to ensure that our asset base continues
to meet our customers’ needs. This includes moving towards
green product equivalents, where appropriate.
Local agility and decision making have
been key to Vp’s success over the years
and this is an important part of the
specialist solutions we have consistently
delivered to our customers.”
Anna Bielby
Chief Executive
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Vp plc Annual Report 2024
Business review
ESG continues to be a focus area for the business through our
engagement with both customers and our supply chain. Climate
change remains an important agenda item. The emissions from
our hire fleet (embodied and usage carbon) account for c.75%
of entire Group emissions. We take seriously our role in
working with our customers and suppliers to address Scope 3
emissions and have a plan in place to reduce these emissions.
We were pleased this year to have our science-based targets
validated by the SBTi.
As an employer, we have direct impacts on the wellbeing,
professional development and economic reward of our
workforce with responsibility for creating an inclusive and
positive working environment. Our teams are tasked with
extending our culture into our supply chains and communities
where we live and operate. Our social value strategy will be a
key area for further development this year.
We have a strong growth track record and have refreshed our
corporate development strategy during the year.
Divisional performance
While our divisions typically operate in more than one
market, the majority of our divisions are principally aligned
to one of our four major market segments of Infrastructure,
Construction, Housebuilding or Energy.
Infrastructure
Groundforce UK
A market-leading rental and design provider of excavation
support systems and specialist products to the water and
construction industries across the UK, the Republic of Ireland
and mainland Europe.
Groundforce has delivered a market-leading performance
and strong year-on-year growth. The division has supported
a number of varying projects, across rail, utilities and
transmission. Within rail, Groundforce supported HS2 on over
30 sites across London and the Midlands, with involvement
in larger projects relating to sewer and utility diversions in
London. Utilities remains a consistent sector of project work,
with AMP7 ending in March 2025, including the Anglian Water
Strategic Pipeline Alliance.
Groundforce continues to focus on customer service, including
digital innovations such as the self-service tools “Your Solution”
and “Your Solution+” platforms, aimed at enhancing customer
experience and streamlining project delivery.
In mainland Europe, Groundforce grew year-on-year leading
to the addition of a further operational site to support local
markets and the pipeline of projects anticipated for the
coming year.
TPA
One of Europe’s largest suppliers of temporary access solutions
providing portable roadways and temporary access solutions to
customers in the transmission, construction, rail and outdoor
events markets.
TPA UK achieved year-on-year growth principally driven by
activity in the portable roadways sector. Market conditions
remained stable in power transmission and utilities, however,
there was a slowdown in the last quarter of the year.
The division has recently opened a new southern depot to
support growth and increase local operational capacity in the
South East of England and the transition from CP6 to CP7
within the rail sector is expected to present new opportunities
in the coming year. TPA also has a strong pipeline in the events
sector for the summer.
TPA Europe operates principally in the power transmission
market, where we have seen strong growth and further
opportunity leading to increased capital investment to meet
demand. The power transmission and renewables sectors
in Germany and across Europe are anticipated to remain
supportive in the coming year.
Torrent Trackside
Specialist suppliers of rail infrastructure, portable plant and
related trackside services, principally to Network Rail and their
appointed track renewal, maintenance and project contractors.
Torrent Trackside has grown year-on-year, despite ongoing
disruption caused by UK-wide industrial action, which led to
the cancellation of several track projects. Notable projects
include the TransPennine route upgrade programme, covering
on-track activities for both the East and West legs, and the
Core Valley Lines project led by Transport for Wales.
The end of CP6 saw a slight reduction in activity but we
anticipate a good level of projects and maintenance from CP7
as we move into the new financial year. In the light rail sector,
which includes London Underground, activity has been lower
than expected.
Throughout the year, this division has placed a strong emphasis
on environmental impact with over 70% of the fleet purchased
this year being zero carbon at point of use.
1 These measures are explained and reconciled in the Alternative Performance Measures section on page 143.
15
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Corporate Governance
Financial Statements
Strategic Report
Case study
Infrastructure – Extension of the
Vienna metro
Deep excavations 32 metres below Vienna required
the use of an innovative bracing concept pioneered
by our trenching and shoring business, Groundforce.
The project is part of a major expansion to the city’s
metro network. Groundforce provided modular
bracing equipment and supported contractors with
an innovative concept, which was pioneered
for these excavations. A temporary bracing
solution was installed and dismantled at the new
Matzleinsdorfer Platz station, as permanent works
progressed. This solution helped manage the
challenges and limitations at the site, which, as
well as the station, incorporated entry of several
new metro tunnels. A heavy-duty support system,
including a range of hydraulically extendable steel
wailing beams and tubular props, were installed
around the perimeter of the excavation and across
its width and corners to counteract heavy ground
pressure. The entire project involved 1,000 tonnes
of equipment, delivered to the site on a fleet of
40 vehicles.
16
Vp plc Annual Report 2024
Business review continued
Construction
Brandon Hire Station
The leading provider of tools and specialist rental products to
industry, construction and home owners across the UK.
Brandon Hire Station experienced challenging trading
conditions throughout the year, leading to a disappointing
performance and lower activity levels than last year. The
high operational gearing of this division means that market
challenges impact financial performance quickly and
significantly. Fleet investment in this division reduced during
the year to match activity levels. As a result of the division’s
performance, intangible assets, including goodwill, of £27.7
million have been written off during the year.
Under a new management team, a review of the business was
undertaken midway through the year. The new team is focused
on a number of initiatives around pricing, cost control and
process. In addition, the division is refocusing the business to
better serve target customers.
Actions in the year also include reviewing and optimising
the branch network, leading to a number of closures and
consolidations. As a result of these changes, restructuring
exceptional costs were incurred during the year.
Notwithstanding the above, Brandon Hire Station remains
a significant element of the Group’s revenue and plays
an important part in supporting some of our biggest
customers. Despite the continuing uncertainty in the General
Construction market, the self-help measures taken, coupled
with a truly national footprint, leaves the division well placed
to respond quickly to any market upturn in the coming
financial year.
MEP
The UK’s largest provider of mechanical and electrical press
fittings and low level access platforms to the construction, fit
out, mechanical and electrical markets.
MEP delivered a strong year securing a number of large
contracts in London, which provide a significant opportunity
for growth.
With two new locations opening during the year, the network
of depots within MEP represents true national coverage with
major hubs supporting the UK’s largest cities.
Key project focus, particularly in London, relates to
regeneration programmes, with a clear shift from traditional
office space fit-outs, to multifunctional operating spaces.
Outside of major projects, the focus for the core business
remains on non-residential projects, which gives optimism
going into the coming year.
MEP has, however, felt the effects of a challenging credit
market within the year, due to the prevalence of smaller
subcontractors within its customer base.
ESS
The leading specialist provider of safety, survey,
communications and test and measurement equipment rental
in the UK.
Market conditions were challenging during the year, particularly
in the survey sector. Despite this, the business responded
well with a clear action plan, including the finalisation of its
regionalisation programme, to right-size its physical footprint
across the UK.
Other areas of the business performed strongly, including test
and measurement and industrial projects, with key customers
utilising a range of products and services to support major
projects in the Energy market.
ESS remains at the forefront of innovation, particularly
in communications products, collaborating closely with
manufacturers to develop customer-centric solutions, which
have had significant traction in the rail sector.
Momentum across ESS was positive in the fourth quarter of the
year with a number of key projects in the pipeline leading to
optimism for the year ahead.
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Financial Statements
Strategic Report
Case study
Construction – On-site hire centre
speeds up project and reduces
carbon footprint
An on-site MEP hire centre set up at one of London’s
most iconic towers is supporting fit-out specialists,
Overbury, to deliver a flagship refit project, which is
one of the largest of its type in Europe. Citi-Tower
is being transformed to create a workplace for the
future, which incorporates the latest technology,
with project completion due in 2025. MEP is
providing innovative equipment to contractors
transforming the 42-storey Citi-Tower in London’s
Canary Wharf. As the centre is on-site, contractors
working on the tower have quick and convenient
access to our full range of equipment hire without
the need to wait for delivery. This approach was
devised with Overbury due to the scale of the Citi-
Tower project and has been designed to overcome
a number of site restrictions. For example, the
solution helps to relieve pressure on a single loading
bay at the base of the tower and reduces journeys to
the site, which is in an area with restricted transport
access. This also helps to reduce carbon footprint.
As an exclusive partner for on-site hire stock on
what is a large fit-out project, we have put in place a
dedicated, on-site team of experts to answer queries
and to deliver tool familiarisation and training.
18
Vp plc Annual Report 2024
Business review continued
Housebuilding
UK Forks
One of the UK’s leading specialist hirers of telescopic handlers
operating across construction and housebuilding sites across
the UK.
The UK Housebuilding market, although steady, remains
subdued. The strength of UK Forks’ customer relationships
has allowed it to successfully retain all core customers, both
national and regional, albeit at reduced volumes.
UK Forks has responded well to the challenging market
conditions by demonstrating rigorous cost controls and
managing its fleet size carefully, helped by strong ties with
suppliers and manufacturers.
Although the outlook for Housebuilding remains subdued in
the short term, when the market improves the business is well
placed to capitalise.
Energy
Airpac
A supporter of a wide range of oil and gas markets, servicing
well testing, pipeline, rig maintenance and liquefied natural gas
(LNG) markets worldwide.
Airpac’s performance in the Energy markets delivered strong
year-on-year growth.
Asia performed particularly well, benefiting from various LNG
shutdowns and projects, which we expect to leverage further
in the coming year. Europe represented a more subdued
landscape, marked by project delays and postponements.
Meanwhile, Australia showed a gradual recovery, with revenue
streams from a range of projects including plant maintenance,
new pipelines, and other initiatives.
The wider macro-economic and political environment creates
opportunity for Airpac, as focus remains on the maintenance of
existing plant and facilities within the sector. Airpac has made
investments in electric compressors, aligning with customers’
green initiatives, especially in geothermal projects. The pipeline
of projects in the current financial year remains optimistic,
particularly across Asia.
Other
Tech Rentals
Australasia’s leading technical equipment rental group providing
test and measurement, communications, calibration and audio
visual solutions in Australia, New Zealand and South East Asia.
Tech Rentals recorded a strong performance against a
backdrop of challenging geographical markets and subdued
business confidence in Australia. Key markets of events,
defence and aviation allowed Tech Rentals to deliver year on
year growth.
Outlook
The Group has again delivered sector-leading returns, led by a
strong performance in Infrastructure in particular. Whilst some
economic uncertainty remains, the Group has made a solid
start to the new financial year, which we expect to be in line
with the Board’s expectations.
Anna Bielby
Chief Executive
4 June 2024
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Financial Statements
Strategic Report
UK Forks helps regional
housebuilder with complex build
When regional housebuilder Keon Homes needed
telehandlers for a care home being built on a tighter than
normal site, they turned to our UK Forks business for help.
The 1.4-acre care home scheme by Keon Homes for Wrekin Housing Trust,
which includes 70 affordable apartments, has been supported by the team at
UK Forks and includes the hire of a 20-metre telehandler which was needed
at short notice for work on the four-storey build.
The scheme in Newport, Shropshire is scheduled to run for 18 months. The
development has been designed to foster a sense of community and belonging
by incorporating communal living spaces such as a restaurant, lounges and staff
rooms with apartments.
UK Forks are part of a group agreement for both themselves and fellow Tara
Group subsidiary Cameron Homes, to supply telehandlers for 90% for Keon’s
schemes.
Keon Homes senior buyer Emma Priest said: “UK Forks were chosen to
provide the telehandlers for this scheme to assist
with the complexity of the build and its evolving
requirements and to keep the site tidy and a safe place
to work. We always consider safety a priority and
need high-quality machines for what are sometimes
demanding time schedules.”
“Telehandlers are an integral part of any build and for
this scheme in particular, with the care home being
somewhat larger than our usual builds and being
situated on a small parcel of land. The telehandlers
provided by UK Forks always perform exactly as we
require them to and, due to the regular site visits
from the company, it is rare that we have any issues or
down time.”
She added: “We’ve had a couple of circumstances
where we’ve had a machine from another supplier
on order and at the last minute, they have been
unavailable, hence the move to UK Forks.”
Case study
20
Vp plc Annual Report 2024
Business review continued
Safety and efficiency in the liquefied
natural gas (LNG) infrastructure
lifecycle
With pipelines serving as the crucial links of
LNG facilities, maintaining their integrity is a
critical task.
Pipelines serve as conduits for transporting natural gas,
and any compromise in their integrity can lead to severe
consequences. Gas condensates present in the pipelines,
along with corrosive substances, also pose a significant risk
to the infrastructure. Regular maintenance, facilitated by
high pressure equipment, is imperative to mitigate these
risks and ensure the continued safe commissioning and
operation of the LNG facilities. High pressure compressed
air and nitrogen equipment is an essential tool in pre-
commissioning, maintenance, testing and decommissioning
procedures, all vital for the operation of LNG structures.
Airpac Rentals, an international business, plays an
important role in this process, supporting a wide range
of oil and gas markets, servicing well test, pipeline testing,
rig maintenance and LNG fabrication, and supplies
essential tools for all phases of LNG infrastructure and its
maintenance.
Recent projects have used our skills at de-watering, drying,
inerting, and leak testing of modules at a prominent LNG
infrastructure fabrication yard in Indonesia, and maintaining
pipelines and modules at key LNG sites in Angola and
Indonesia. By providing high-pressure equipment tailored
to the demands of these projects, Airpac Rentals plays a
crucial role in safeguarding the integrity and functionality of
the LNG infrastructure.
Case study
Corporate Governance
Financial Statements
Strategic Report
Corporate Governance
Financial
Statements
Strategic Report
21
Vp plc Annual Report 2024
Impairment of intangible assets
Intangible assets have been impaired by £28.1 million (2023:
£1.2 million). The majority of the impairment (£27.7 million)
has been recorded against assets initially recognised on the
acquisition of Brandon Hire in November 2017. This non-cash
impairment has reduced the carrying value of goodwill, trade
names and customer relationships by £25.9 million, £0.7 million
and £1.1 million respectively.
The impairment has been calculated by comparing the
carrying value of the cash generating unit assets against their
recoverable amount. Further detail of this exercise is provided
in note 10.
As discussed further in the Business Review, Brandon Hire
Station performed disappointingly during the year, due to
challenging trading conditions in the General Construction
market.
Earnings per share, dividend and shares
Adjusted basic earnings per share before amortisation,
impairment of intangible assets and exceptional items
(‘Adjusted basic earnings per share1) decreased from 79.0 pence
to 74.8 pence. The decrease of 4.2 pence includes the impact
of the increase in the UK Corporation Tax Rate in the current
year. After taking into account amortisation, exceptional items
and impairment charges the Group recorded a basic loss per
share of (13.4) pence (2023: earnings per share of 58.1 pence).
The Board has recommended a final dividend of 27.5 pence
per share. If approved, the full-year dividend would increase to
39.0 pence per share with dividend cover of 1.9 times (2023:
2.1 times) based upon adjusted earnings per share. At 31 March
2024, 40.2 million shares were in issue, of which 609,000 were
held by Vp’s Employee Trust.
Balance sheet
The Group’s balance sheet is set out on page 99 of this report.
Total property, plant and equipment increased by £4.5 million
to £256.9 million. The movement in the year mainly comprised
£69.9 million (2023: £66.9 million) of capital expenditure offset
by depreciation of £44.1 million (2023: £46.9 million) and
£17.8 million (2023: £15.7 million) of disposals (net book value).
Rental equipment at £226.0 million (2023: £220.6 million)
accounts for 88.0% of property, plant and equipment net book
value. Expenditure on equipment for hire was £62.8 million
(2023: £59.9 million) and depreciation of rental equipment was
£38.8 million (2023: £40.9 million).
Intangible assets reduced from £57.7 million to £28.6 million,
predominately due to the impairment charge noted earlier.
Our strong balance sheet provides
the foundation for future growth.”
Trading performance
The Group has delivered an encouraging financial performance
against a challenging backdrop with Group revenue remaining
broadly flat at £368.7 million (2023: £371.5 million). Adjusted
profit before taxation, amortisation, impairment of intangible
assets and exceptional items (‘PBTAE’) decreased to
£39.7 million (2023: £40.5 million) with net operating margin
at 10.8% (2023: 10.9%). Statutory profit before tax was
£2.8 million (2023: £30.7 million). The Return on Average
Capital Employed1 was 14.5% (2023: 14.4%).
Segmental performance
Revenue generated by the Group’s UK segment was
£330.1 million (2023: £333.5 million), while operating profit
before amortisation and impairment of goodwill, trade names
and customer relationships and exceptional items was flat at
£44.7 million (2023: £45.6 million) - a resilient performance
given the challenges in the UK General Construction market.
The Group’s International segment, assisted by exposure
to international energy markets, delivered pleasing
growth, with revenue increasing by 1.3% to £38.6 million
(2023: £38.1 million). Operating profit before amortisation
and impairment of goodwill, trade names and customer
relationships and exceptional items increased by 50% to
£4.8 million (2023: £3.2 million).
Exceptional items
This year, the Group has recorded exceptional items of
£5.8 million (2023: £5.0 million). These items have been
reported separately due to their size, nature or irregularity
and in order to better understand the underlying performance
of the Group. Exceptional items comprise £1.6 million of costs
from changes to the Group’s Board and senior leadership team
alongside branch closure costs of £4.2 million, mainly in relation
to Brandon Hire Station.
Keith Winstanley
Chief Financial Officer
22
Vp plc Annual Report 2024
Financial review
Gross trade debtors were £71.4 million at 31 March 2024
(2023: £77.6 million). Days sales outstanding has decreased by
1 day from 59 to 58 days as the external credit environment
has remained stable yet challenging. Bad debt and credit note
provisions totalled £4.9 million (2023: £4.6 million) equivalent
to 6.9% (2023: 5.9%) of gross debtors. The impairment of trade
receivables for the year as a percentage of total revenue was
1.0% (2023: 0.9%).
The Group’s defined benefit pension schemes have a net surplus
of £1.9 million (2023: £2.3 million), which is recorded as an asset
on the balance sheet on the basis that the Company has an
unconditional right to a refund of the surplus of its main scheme.
Cash flows and net debt
The Group’s cash flow is shown on page 100. Year-end net
debt excluding lease liabilities1 decreased by £9.2 million to
£125.2 million.
The Group continues to generate strong cash flows with
£108.7 million (2023: £80.2 million) generated from operations.
The year-on-year increase includes the impact of a £9.8 million
improvement in working capital, with pro-active management
remaining an important area of focus.
Cash outflows for the purchase of property, plant and
equipment were £71.4 million (2023: £63.3 million).
Proceeds from disposal of assets totalled £25.3 million
(2023: £24.9 million), generating a profit on disposal of
£7.5 million (2023: £9.2 million).
Net interest outflows, excluding IFRS 16 interest, for the year
were £6.3 million (2023: £5.4 million). This additional cost was
largely due to the increase in Sterling Overnight Index Average
(SONIA) during the year. Interest cover before amortisation
and IFRS 16 interest was 7.3 times (2023: 8.3 times) and the
gearing ratio of adjusted Net Debt/EBITDA was 1.36 (2023:
1.44), both are calculated in accordance with our bank facility
agreements and are comfortably within our covenants of
greater than 3.0 times and lower than 2.5 times respectively.
Net interest expense including IFRS 16 was £9.6 million (2023:
£8.6 million). Cash tax was £9.2 million (2023: £5.5 million).
Dividend payments to shareholders totalled £15.0 million
(2023: £14.5 million) and cash investment in own shares on
behalf of the Employee Benefit Trust (EBT) during the year was
£0.7 million (2023: £1.1 million).
Capital structure
The Group finances its operations through a combination of
shareholders’ funds, bank borrowings and leases. The Group
allocates its capital using a disciplined capital allocation policy
that prioritises organic growth and ordinary dividends. The
capital structure is monitored using the gearing ratio quoted
above.
In November, the Group was pleased to renegotiate its
revolving credit facility (RCF) for a further three years,
including a refreshment of our banking club (HSBC, Lloyds,
Bank of Ireland). The updated RCF provides £90 million of
credit and expires in November 2026. The terms of the
facility are broadly unchanged, other than an increase in the
uncommitted accordion facility from £20 million to £30 million.
At the year-end date, the Group had £183.0 million debt
capacity (2023: £183.0 million) comprising £90 million committed
revolving credit facilities and £93 million private placement
agreements. The Group has two private placement agreements
both with low fixed interest rates. The placements expire in
January 2027 and November 2028. At 31 March 2024, £132.0
million of the combined facilities was drawn down (2023: £146.0
million). In addition to the committed facilities, the Group’s net
overdraft facility at the year-end was £7.5 million (2023: £7.5
million). Borrowings under the Group’s RCF are priced on the
basis of SONIA plus a margin. The interest rate margin is linked
to the net debt to EBITDA leverage of the Group.
The Board has evaluated the facilities and covenants on the
basis of the 2025/26 long-term forecasts which have been
prepared taking into account the current economic climate,
together with a severe but plausible downside scenario. All
scenarios retain adequate headroom against borrowing facilities
and fall within existing covenants.
This evaluation gives the Directors confidence that the Group
has adequate resources to continue in operation over the
viability period. Further discussion regarding going concern is
set in the Directors’ report on pages 85-86.
Treasury
The Group has exposure to movements in interest rates on
its borrowings, which is managed by maintaining a mix of fixed
and floating debt. The fixed element of year end borrowings
was £93.0 million, which was c.75% of net debt excluding lease
liabilities.
The Group is exposed to movements in exchange rates for
both foreign currency transactions and the translation of net
assets and income statements of foreign subsidiaries. The
Group regards its interests in overseas subsidiary companies as
long-term investments and manages its transactional exposures
through the currency matching of assets and liabilities where
possible.
The matching is reviewed regularly with appropriate risk
mitigation performed, where necessary. During the year the
Group has not had any foreign exchange hedges.
Taxation
The overall tax charge for the year was £8.1 million (2023:
£7.7 million). The effective rate was significantly higher than the
prior year predominately due to goodwill impairment charges
not being deductible for tax. A more detailed reconciliation
of factors affecting the tax charge is shown in note 8 to the
financial statements.
Keith Winstanley
Chief Financial Officer
4 June 2024
1 These measures are explained and reconciled in the Alternative Performance Measures section on page 143.
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Corporate Governance
Financial Statements
Strategic Report
Meeting the needs and
expectations of our
stakeholders is fundamental to
the delivery of our purpose.
Our engagement strategy has been
reviewed during the second half of
the year following the appointment
of a refreshed leadership led by Chief
Executive, Anna Bielby. We believe
that engagement with our stakeholders
should be a multi-layered process with
engagement touching all part of our
business from front line operations, our
workforce, to the Board, its Committees
and our shareholders. Furthermore,
engagement with our customer base and
supply chain is an active part of how we
do business at a divisional level and in the
coming year, greater focus will be placed
on engaging with customers strategically
for the benefit of the Group.
Our Section 172(1) statement
Each Director, and the Board collectively,
gives careful consideration to the factors
set out above and has acted in a way
they consider complies in all respects
with their Section 172(1) duties. To
help facilitate this, prior to each Board
meeting all Directors receive appropriate
reports addressing, among other things,
key matters concerning customers,
suppliers, investors, colleagues,
regulators and the communities,
together with information regarding the
Group, comprising a Chief Executive
overview, a financial report and individual
briefings from senior executives.
To help the Board understand our
wider stakeholder relationships and
to help inform the Board’s decision
making, reporting and communication
has been improved through the year.
Communications to the Board, between
the Board and the Executives and clear
communication channels from the
divisions, enable the Board to monitor
the short, medium and long-term impact
of key decisions.
Our colleagues are key to our
success, with many working directly
with customers in depots and
branches.
How we engage
• Company-wide email updates
• Senior management calls and
conferences
• Company intranet
• Dedicated whistleblowing helpline
available to all colleagues with all
disclosures handled confidentially
• Vp Learning Academy
• Long Service Awards recognising
20, 30, 40 years’ service
• Vacant job roles are shared across
all divisions
• Trialling of listening groups in
Brandon Hire Station
• Divisional colleague surveys
• Women’s network – colleagues
from our divisions participate in
external community groups
Key challenges
• Attracting and retaining the best
people in the industry
• Driving high engagement with
branch-based colleagues
• Ensuring all colleagues across the
business feel heard
Engagement performance
metrics and highlights in 2023
• Understanding the reasons
for, and thereby reducing our,
attrition
• Making available opportunities to
progress within the organisation
Priorities for 2024
• Improving the range and quality of
channels to communicate with all
colleagues
• Colleague satisfaction monitoring
• Introduction of Management
Development training
• Extension of the Vp Academy
Our customer base is diverse and
includes a number of blue-chip
clients who are typically leaders in
their industries.
How we engage
• Face-to-face meetings, online
meetings and calls
• Tendering and RfP processes
• Monitoring of the provision of
hire, sales and services
• Call centre support
• Customer training –
presentations, video blogs and
webinars
• Customer feedback with data
collection through channels
including Zendesk and surveys
• Omni-channels (online,
websites, mobile apps, help
desks) available including depot/
branch network
• Social media
• Product videos
• Trading shows throughout
the year
Key challenges
• Understanding customers’
changing needs
• Regulatory compliance
• Economic fluctuations
Engagement performance
metrics and highlights in 2023
• Customer retention
• Customer satisfaction
• Repeat sales
Priorities for 2024
• Efficient central functions
supporting agile customer-
centric divisions
• Optimised digital touchpoints
fostering strong customer
relationships and retention
• Increase in the range of
products to reduce operational
carbon emissions intensity
01 – Colleagues
02 – Customers
Read more about
our colleagues on pages 33-34
Read more about
customers on pages 31-32
24
Vp plc Annual Report 2024
Stakeholder engagement
We value collaboration with our
partners and seek to engage with
and support them.
How we engage
• Tendering process
• Through our face-to-face and
digital channels
• Day-to-day interactions
including conferences, site visits
and calls
• Conferences/meetings with
strategic suppliers on key
topics such as sustainability and
compliance
• Training sessions
• Membership of industry
organisations such as Supply
Chain School of Sustainability
Key challenges
• Developing and maturing
a broad range of supply
chain partners via improved
procurement structures
to counteract pricing and
deliverability pressures
• Delivering goods and services in
time pressured environment
• Managing compliance risk
Engagement performance
metrics and highlights in 2023
• Health and safety and
compliance
• Engagement to reduce their,
and our customers’ operational
carbon emissions intensity
through product innovation
Priorities for 2024
• Refreshed procurement
processes
• Continued dialogue on
sustainability topics
• Product innovation days
• Improved governance and
compliance
We engage with existing and
prospective investors at regular
intervals giving them access
to accurate and accessible
information to promote
transparency and ensure business
stability.
How we engage
• Annual General Meeting
• Results presentations, meetings,
calls, roadshows, conferences
• Annual report
• Emails, calls and online meetings
• Corporate website – relaunched
June 2024
• ESG benchmark and disclosure
initiatives
Key challenges
• Ensuring investors understand
differentiators
• Balancing regular, timely,
informative communications
with operational pressures and
compliance requirements
Engagement performance
metrics and highlights in 2023
• Share price
• Investor feedback
Priorities for 2024
• Continued commitment to good
practice disclosure
• Site visits showcasing
management team and wider
workforce
• Engagement with existing and
prospective investors
03 – Supply chain
04 – Investors
05 – Communities
With our colleagues often living
in close proximity to where they
work, we are embedded in local
communities across the areas
where we operate.
How we engage
• Volunteering projects in the
community
• Charitable donations and
employee charity matching
• BITC – Vp has recently
become a member of BITC and
undertaken BITC’s Responsible
Business Tracker evaluation.
Key challenges
• The breath of our operations
• Capacity of our workforce
Engagement performance
metrics and highlights in 2023
• Charitable and community
engagement
Priorities for 2024
• Launch of our new social value
strategy
• Charitable activities linked to
our 70 year anniversary
Read more about supply
chain on pages 40-41
Read more about
communities on page 35
25
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Our core values and responsible
business framework direct how
we handle environmental and
social impacts. This year we
have formalised our approach
through the following themes:
Minimising the impact of our
operations ensuring value
preservation through the
de-risking of our activities
A proactive approach to
customer and market sentiment
regarding sustainability
Read more on page 28
Read more on page 28
Our strategy is focused on four primary stakeholder groups
Key data and information can be found on the following pages:
Customers
01
Environment
03
Colleagues and Community
02
Supply Chain
04
Our customers will be required to report on their ESG
performance within their supply chains. We are working
with them to support their journey and reporting.
Read more about
customers on pages 31-32
Our net zero roadmap demonstrates the approach the
Group is taking to deliver on our targets, which this year
were validated by the SBTi’s net zero standard and to a
1.5ºC planetary warning trajectory.
Read more about
environment on pages 36 - 40
Our colleagues are a fundamental part of the communities
where they are based. They use their skills and expertise
to work with clients on providing the right solution and
actively contribute to the areas where they live and work.
Read more about colleagues and
community on pages 33 - 35
The assessment of Vp’s sustainability performance will not
be limited to its own operations. Under our commitments
to manage our Scope 3 emissions, this involves an
appreciation of carbon emissions in both upstream and
downstream activities from our operations.
Read more about
supply chain on pages 40 - 41
Read more on page 39
Read more on page 27
Read more on page 38
Carbon inventory
for FY2023/24
Capex analysis
Net zero roadmap
We have made good progress during this year with highlights shown below:
SBTi validation
of our carbon
emissions inventory
and reduction
targets
A detailed table of highlights is shown on page 30
Group emissions
inventory completed
in-house to increase
understanding
Ongoing
development of
our hire fleet to
meet customers’
requirements for
cleaner alternatives
Work ongoing to
provide emissions
data to our
customers
Positive
engagement with
our supply chain
to align core
values and targets
26
Vp plc Annual Report 2024
Environmental, social
and governance at a glance
Anna Bielby
Chief Executive
Managing risk and opportunity
The Group’s core values are the bedrock of our
responsible business ethos. These, together with
our ESG strategy, set out in the following pages,
provides robust governance to how we handle
environmental and social impacts. We recognise
that sustainable operations are a key responsibility
for the Group.
Overview
The business consistently considers environmental issues, under
the guidance of the Environmental Steering Group. This group,
led by me and the Director of Risk and Sustainability, includes
representatives from our trading divisions enabling the executive
to gauge ESG-related dynamics from our key customer groups
and sustainable solutions coming from our supply chain. The
emissions from our hire fleet (embodied and usage carbon)
account for c.75% of entire Group emissions.
We are also aware of the extensive impact of social value
resulting from our operations. As a large employer we have
direct impact on the wellbeing, professional development and
economic reward of our workforce, with responsibility for
creating an inclusive and positive working environment. Our
teams are then tasked with extending our culture into our supply
chains and communities where we live and operate to ensure we
leave a positive impact.
Sustainability and our business model
Achieving a balance between commercial and sustainable
strategies is an increasingly important consideration for the
long-term success and resilience of our business. This balance
involves integrating sustainability concepts, where possible, into
the core business model while ensuring Vp’s market relevance.
Indeed, some of our sustainability-led initiatives differentiate us
from our peers and could drive competitive advantage, while
shorter-term success is underpinned by traditional drivers of
cost, quality, reliability and accessibility.
Sustainable practices can often lead to greater operational
efficiencies, such as reduced energy use, lower water
consumption, and minimised waste. These efficiencies can
translate into significant cost savings over time, which is
particularly important for the Group when looking to optimise
performance across our international operations.
The Environmental Steering Group orchestrates our
sustainability initiatives across the entire Group to ensure that
they reflect the long-standing characteristics that have made
the business a success, while considering enhanced responsible
business practices that can both respond to our customer
requests as well as proactively drive more sustainable solutions.
Alignment to brand framework
Our ESG direction and aspirations are intrinsically linked to
the Company’s purpose and culture. Our brand framework is
underpinned by three distinct pillars, which dictate who we are
and how we operate – focused, agile and fair.
Approach to stakeholder analysis and engagement
We regularly engage with key stakeholders as set on pages 24-
25 of this report and specifically have been gathering insights
from our various stakeholder groups; customers, colleagues,
the supply chain, regulators and investors to understand their
individual motivations. This feedback is informing management
regarding the importance of sustainability. The Group is taking
a measured approach to align sustainability forces into our
overall business model and risk appetite, which will impact the
medium to long-term strategic approach.
Focused
• Listening to stakeholder feedback
• Building an ESG approach that delivers consistent returns
Agile
• Designing bespoke solutions for our customers
• Building resilience in our rental fleet to appeal to our wide
range of customers and their needs
Fair
• Equal consideration of key stakeholder groups
• Understanding our obligations to minimise our impact
on the environment
Capex analysis
45%
33%
22%
Zero emissions at point
of use
Cleaner technology
Other investment
The chart shows that c.80%
of our capex is spent on fleet
with zero emissions at point
of use or cleaner technology
27
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Chief Executive’s introduction to ESG
We continually work with stakeholders as part of our
governance culture to understand their interests and how this
impacts our assessment of risk and opportunity in our business.
This in turn informs our strategic approach, while building
mutually beneficial relationships.
Assessment of material ESG issues
As sustainability themes grow in importance for our
stakeholders, we remain committed to ongoing discussions
about their relevance to our business across the short, medium
and long term. This commitment ensures that our focus on the
four areas set out below consistently align with stakeholder
expectations and our commercial objectives.
Our approach
Customers
01
Environment
03
Colleagues and Community
02
Supply Chain
04
While we currently disclose aspects of sustainability
performance in line with legal requirements and the UK
Corporate Governance Code, we are also aware of the
proposed standardisation of sustainability disclosures by the
UK Government (adopting the International Sustainability
Standards Board reporting framework under IFRS S1 and S2),
as well as similar standards in place in the EU. While satisfying
our regulatory obligation, we plan on adopting a common
standard that will meet our disclosure obligations across
our operational areas. Such disclosures are likely to become
far more important from a customer perspective and an
increasingly vital part of tender submissions.
The intent is to ensure that we have a sustainable approach that
helps the Group to maintain its viability to both customers and
investors, while contributing social and environmental value to
our employees, supply chain partners and communities.
Our sustainability themes
1. Minimising the impact of our operations
Value preservation through the de-risking of our activities
The Group has taken steps to minimise the impact of our
operations on the environment and understanding our entire
carbon footprint has allowed priority areas to be addressed.
Our decarbonisation journey is punctuated by some key
tactical steps:
• Consolidation of water and waste management partners
and efforts
• Accreditation with ISO 50001: Energy Management
in all of our UK sites
• Investment in electric and hybrid vehicles in our
commercial and Company car fleet
• Procurement of renewable electricity across our UK
property estate
• Working with customers on co-locating to reduce
transport emissions
• Collaborating with our Estates team on a branch
of the future blueprint.
2. A proactive approach to customer and market
sentiment regarding sustainability
Value creation through product innovation
Embracing sustainability can drive innovation by pushing the
development of new products and services or driving the
improvement of existing ones.
We are conscious of the need to develop new solutions in
partnership with our key customers, in order to maintain
our competitive edge, appealing to both eco-conscious
consumers as well as our traditional business partners.
Our Scope 3 emissions inventory has informed the Group
and senior management teams regarding the importance of
our hire fleet make-up in relation to our overall impact on
the environment. Within our divisional structure we have
two distinct areas of fleet:
• Hire fleet, which is zero emissions at point of use e.g.
Groundforce struts or TPA roadway panels
• Powered fleet, which requires either fossil fuel or
electricity for that power.
28
Vp plc Annual Report 2024
Assessing our impacts
Implemented
Standard/framework
Status
Link to strategic impact
ISO 50001: Energy Management
The Group has committed to
reach net zero greenhouse gas
(GHG) emissions across the
value chain by 2050 from a 2023
base year.
Aligned to our strategy of creating a lower
carbon operation across our trading estate.
Task Force for Climate-Related Financial
Disclosures (TCFD)
Further disclosure is set out in
this report regarding our Scope
3 carbon inventory and scenario
testing regarding planetary
warming pathways.
The impact of climate change is considered
in our key businesses processes. Our
strategy of providing sustainable solutions
through our fleet investment demonstrates
our commitment. Investment in sustainable
fleet is now considered business as usual in
our divisions with powered products.
Sustainable Development Goals (SDGs)
The Group has aligned its
approach with 12 of the current
SDGs – these are sectioned into
(a) SDGs for our customers,
investors and supply chain, and
(b) SDGs for our people and
communities.
The SDGs chosen align to our business
values.
Clarity around “purpose beyond profit”
is demonstrated in our approach to
restoration and conservation projects.
Science-Based Target Initiative (SBTi)
Our complete emissions inventory
and targets for emissions
reduction were validated by the
SBTi in November 2023.
The conclusions of our validation process
are being used at the heart of our strategic
approach to shaping our hire fleet.
Sustainable Procurement Policy (SPP)
During the financial year the
Group finalised and implemented
our SPP and communicated this to
key companies in our supply chain.
The values we expect of our suppliers has
been defined. We are working with our
suppliers to achieve a common aim.
Acknowledgements
Standard/framework
Status
Link to strategic impact
Task Force for Nature related Financial
Disclosures (TNFD)
The Group is in the process
of assessing the impact of this
in relation to our governance
processes.
Under consideration.
IFRS S1 and S2
The Group will release further
comment around these areas in
the next financial year.
An assessment on how disclosures may need
to evolve is being undertaken.
29
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Standards and frameworks
Key highlights and targets
Customers
01
See pages 31 - 32 for more information
Topic
Detail
Commentary
Rental fleet
Throughout the Group, changes are being made to
transition into a more sustainable rental fleet in line
with our near-term emissions targets, changes to
customer preferences and regulatory changes
To maintain levels of capex directed to
either zero emissions at point of use and
lower emission technology
Colleagues and Community
02
See page 33 - 35 for more information
Topic
Detail
Commentary
Restoration and
conservation
In 2024, the Group is providing funding for the fourth
consecutive year to conservation projects with an
investment in 2024 of £100k
Increase volunteer days take up
Building long-term relationships with the
Wildlife Trusts
Community donation
Through our new partnership with Business in the
Community, we are working on developing our
purpose beyond profit. Recently, we donated 250 end-
of-life tablets to the North Yorkshire Council reboot
scheme
Develop our social value strategy including
charitable support
Environment
03
See pages 36 - 40 for more information
Topic
Detail
Commentary
Emissions calculation
We successfully completed our greenhouse gas
emissions inventory in house to increase our
understanding
Focus on our on our short-term emission
reduction
SBTi
In November 2023, our emissions inventory and
science- based targets were validated
Transition plans
Following the validation of Vp’s science-based targets,
transition plans (to a lower carbon operation)
are being refined at a divisional level with Group
consolidation
Completion and costing by end of
July 2024
Supply Chain
04
See pages 40 - 41 for more information
Topic
Detail
Commentary
Partnerships BITC
and SCSS
This year, we have invested in two new partnerships
with the Supply Chain Sustainability School and
Business In The Community
To support our approach to train our
entire workforce in carbon literacy by the
end of 2024
Capture system
The Group is rolling out a supplier questionnaire to
our top 80 suppliers (by emissions) with the overall
aspiration to improve alignment to their sustainability
and governance credentials in line with our own
Target to increase to our top 250
suppliers by 2025
30
Vp plc Annual Report 2024
Environment, social and governance
A positive impact proposition
Customer landscape
Our customer base includes a number of blue-chip
customers who are typically leaders in their industries,
recognised for their stability and often associated with high-
quality, widely accepted products and services.
As prominent and influential entities in the global market, our
customers face significant pressure and higher expectations
when it comes to adopting sustainable practices. In addition
our customers and their investors are highly aware of
international climate targets and broad stakeholder sentiment
towards more responsible resource use. This is impacting
supply chain relationships as large corporates align their
operations and sustainable strategies to address these global
challenges.
Further focus has come via the EU who have recently
launched a detailed disclosure framework. The UK and
other jurisdictions are following suit with a new sustainability
standard called ISSB.
Our customer base will be caught under the same regulatory
regime and will need to provide detailed information about
the ESG performance within their supply chains, presenting
both risk and opportunity to us.
The impact of this increased focus and evolving environment
is already becoming apparent in larger tender documentation
that we are receiving, requiring an optimisation of
resource management and a minimum level of sustainability
disclosures. Importantly, our focus is also informed by
our teams on the ground who are responding regularly to
customer questions on this topic.
Earlier this year, we engaged with our key customers to
provide them with an overview of our group-wide approach
to sustainability, as well as a showcase of our sustainable
products solutions across a number of divisions including
Groundforce, TPA and Brandon Hire.
We aim to make the Group more competitive through our
ESG initiatives as these influence our customers’ own supply
chain reporting (e.g. Scope 3 emissions).
Our response
Product and service innovation is at the heart of our
customer proposition. The sustainability agenda lens has not
generated this culture but has supplemented commercial
considerations that are driven by customer feedback,
especially with our larger customers.
Customers
01
Supporting our customers’
sustainability strategies
Market sectors
We provide specialist products and services to a diverse range
of end-use markets including Infrastructure, Construction,
Housebuilding, and Energy. As well as a range of macro-
economic factors that drive the demand for our businesses,
there are an increasing range of sustainability-related risks and
opportunities that management continues to review. These
issues may impact investment decision making to ensure our
long-term resilience in our marketplaces through the supply
of more sustainable products and services.
Regulatory drivers for customers
There is increasing pressure from the public, investors, and
other stakeholders for transparency and responsibility in
how major construction projects are planned, implemented,
and maintained. This includes demands for reducing carbon
footprints, preserving local ecosystems, and ensuring that
projects benefit local communities socially and economically.
This pressure drives disclosure of emissions, energy efficiency,
water usage, and waste management in addition to which
the regulatory environment often enforces the adoption
of sustainable materials and technologies to reduce the
environmental impact of new projects.
Our customers must comply with these regulations to avoid
fines, benefit from incentives, and meet permit requirements.
This includes adhering to building codes that promote energy
efficiency and sustainable construction practices.
Case study
Enhanced sustainability data for
customers
Like many organisations, we employ a comprehensive
software platform to integrate and manage core business
processes. Beneficial characteristics include automated
reporting and analytics of standardised information to aid
management decision making. Internally, we have updated
our ERP system to provide instant data to customers for
emissions data e.g transport, usage and embodied carbon.
We are also in the process of lobbying our key suppliers
for Environmental Product Declarations (EPD) to make
more informed decisions on supplier selection and also
to refine our embodied carbon figures. These improved
sustainability data dashboards can then assist customers
with their own regulatory compliance and reporting.
31
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Supply chain strategy
To contribute towards reduced embodied carbon in our
products and services, our operating divisions are challenging
our suppliers to provide cleaner solutions to address the
current carbon profile of our hire fleet:
• Lower carbon production techniques – Arcelor and
Profilafroid are examples of the steel fabricators we use for
our mega brace struts and trench sheets; and
• Recycled aluminium – TPA‘s key supplier, Hydro, now offers
recycled aluminium instead of virgin aluminium that has a 10%
reduction in embodied carbon.
Balancing emissions sources: embodied and usage carbon
Our sustainability focus also considers the distinction between
embodied and usage carbon:
• Zero emissions at point of use products will be analysed
regarding their embodied carbon; and
• Powered fleet will be considered regarding both their
embodied and usage carbon.
Embodied and usage carbon emissions from our rental fleet
accounts for c.75% of our entire output as a business.
Our fleet strategy is currently fluid, largely due to the fact that
our customer base is diverse and has differing motivations and
priorities. Our larger customers (including Tier 1 contractors)
are keen to collaborate on innovative solutions.
The balance of our fleet composition will increasingly impact
our attractiveness to customers and determine a proportion
of future financial returns. The commerciality of our rental
fleet management has always been a core characteristic of
our competitive advantage, and now product sustainability is a
component of this decision making. The importance of a lower
carbon (embodied and usage) fleet is key to building a resilient
business model for the medium to long term.
Crucially, when building the business case for investment in a
more environmentally sustainable fleet, our divisional teams
have been able to demonstrate to customers the financial
advantages associated with using cleaner fuel alternatives. As
well as a cost saving, the customer will experience reductions
in their own carbon inventory. As with many areas of our
business, we are well positioned to command a premium
for bespoke solutions offered to customers as set out in the
Brandon Hire Station case study above.
Tier 5 engines (UK Forks)
Tier 5 is the latest stage of engine emission legislation (EU)
designed to reduce pollution from off-highway machines.
This requires autostop functionality of machines to reduce
emissions from idling vehicles and power regeneration to
increase fuel efficiency. Tier 5 machines are being requested
where the specification of electric alternatives is not viable
from a performance and functionality perspective. We are in
the process of updating our fleet in line with these customer
expectations.
Case study
Case study
Carbon comparator:
TPA Portable Roadways
TPA’s Carbon Calculator is an online tool designed to
assess the relative carbon impact of creating a temporary
access road using aluminium trackway panels compared
to the traditional method that utilises aggregate/
stone. The carbon calculations are based on reliable
government conversion factors and industry standards.
Brandon Hire Station charging
solution
Brandon Hire Station has developed a charging solution,
to be housed on customer sites, which can charge
multiple products using solar derived power. This hire
product has both carbon reduction and health and safety
benefits.
In addition, lithium battery technology can present H&S
risks if batteries become damaged. The stations provide
early warning technology by tracking of:
• Volatile organic compounds which can indicate lithium
battery damage.
• Airborne particulates.
• Each pod has thermal imaging cameras to spot if
batteries are exceeding normal temperature ranges.
• Site managers can be notified by SMS messaging if an
issue is detected. A thermally secured box is provided
to house dangerous products.
Environment, social and governance continued
32
Vp plc Annual Report 2024
Colleagues and Community
02
Our people are specialists and drive the quality of service and solutions that we provide
to customers.
Our teams are good at solving problems and quick to respond to our customers’ needs, as they possess experience and knowledge
in our highly specialised sectors. The culture is defined by consistent ways of working and an appetite to be the best in what we do.
Management is committed to supporting our teams so that they can develop their full potential, and during this year a number of
initiatives have been focused on professional development. To maintain standards, an online customer service training programme
for all colleagues is to be rolled out across divisions, including cross-functional compliance training with a focus on lone working.
Teams that work together
Our structure is flat which
helps with effective decision-
making. We believe in trusting
our people with high levels of
autonomy and accountability.
People who join us and grow
We create opportunities for
our colleagues to establish
lasting careers supported
by providing fit for purpose
and engaging learning and
development.
A great place to work
Our colleagues get the chance to
be involved in some of the most
challenging and exciting UK and
international projects. We aspire to
make them feel valued.
The right people in place
for now and tomorrow
We recognise that our people want
to be the best in all they do, and we
aim to attract and retain a diverse
range of talent and skills, reflecting
the communities in which we
operate.
Our HR strategy is focused on the following areas:
Recruitment and talent attraction/retention
We recently transitioned our applicant tracking system to a new provider, which will deliver improved reporting and greater access
to specialist recruiters. As LinkedIn becomes a platform for recruitment, we have signed up to their recruiter facility enabling access
to a wider range of candidates. Recruiting colleagues who reflect our communities will be a focus for us as we mature our talent
acquisition strategy and offering hybrid and flexible working opportunities also enables us to reach a wider demographic.
33
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Development
During the year, we have focused on delivering a two-
day Management Development course – “Essentials of
Management” to 220 of a target of 415 colleagues, with the
remainder attending follow-up sessions. These are face-to-
face workshops that help new managers understand their
responsibilities in their supervisory roles. The second module
in the training programme is “Hiring on all cylinders”. To ensure
our managers are fully skilled in recruitment best practice we
have also delivered training to 91 managers, with a further 28
workshops planned in 2024.
Our apprentice programme currently has 81 aspiring employees
on the scheme with a further 42 joining in 2024. The training,
offered as part of the programme, includes supervisory
capabilities, management competencies, sales and engineering
skills. This talent supports our future succession planning across
our branch and depot networks.
Our one-year graduate programme, now in its sixth season,
provides a pipeline of young talent for both our operating
businesses and central functions. Culminating in a project task
that includes a final presentation to our Executive Committee,
this platform gives students the opportunity to apply for a
variety of roles across the business.
Our medium-term roadmap to net zero by 2050, highlights
the key priority for the year will be to roll-out carbon literacy
training for all employees, enhancing their understanding of the
relevance of the topic of our business and how they assist their
customers in their sustainability-driven purchasing decisions.
Diversity and inclusion
We are working to build a more diverse and inclusive
workforce, which fully reflects the communities in which we
operate, so our customers can benefit from the full breadth of
talent this offers.
We have graduate and apprenticeship training programmes
which appeal to a broad spectrum of candidates to join
the business, and we actively encourage engagement by
our teams in external community groups. Our Women’s
Network engages across a range of industries to talk about the
opportunities and challenges that exist in the workplace.
As an equal opportunity employer, we are committed to
promoting the same level of vocational prospects to all.
Headcount
Gender split %
Male
2,108
83.58%
Female
414
16.42%
Note: This relates to UK based employees only as at 31 March 2024.
Environment, social and governance continued
Case study
Gender pay
Leading the way on gender pay
Consolidated gender pay reporting for men and women
across all roles and businesses in the Group shows that
both the average and the mid-point figures for hourly pay
are higher for female employees for 2023/24.
Our reporting, which is in line with government
requirements for companies employing more than 250
people, consolidates the average (mean) and mid-point
(median) hourly pay for men and women across all our
roles and businesses.
The majority of our employees are male, with
significantly fewer females employed in the lower quartile
of our business. Typically, more men are employed within
manual and driving roles, which is common with other
businesses in our sector.
Our results also show that both the mean and median
bonus figure for female employees is higher than that of
the male employees. However, the proportion of male
employees who received a bonus is higher than the
female employees who received a bonus.
We are committed as a business to
employ people who have the relevant
qualifications, attributes and skills
regardless of gender.”
We are equally committed to ensuring that employees
are paid the correct rate for the job regardless of gender.
We have invested in a new HR and Payroll system, which
allows us greater control and reporting in this area.
Vp plc consolidated data
Mean hourly pay gap
0.18
Median hourly pay gap
(1.36)
34
Vp plc Annual Report 2024
Health and safety
The health and safety of both our colleagues and customers
is a fundamental priority of our business, not least because
of the sectors in which we operate. The Group sets an
overall policy for the management of health and safety. The
Chief Executive retains oversight in this area and discusses
performance on a regular basis with both the Executive
Committee and the individual businesses and the Board is
updated on overall performance including any serious incidents
that arise. Operational responsibility for health and safety
lies with the Group’s individual businesses, supported by clear
policies and procedures as well as appropriate risk assessment
techniques backed by training and clear communication. To
better understand the good practice across our divisions,
and to ensure we have a consistent approach to our Health
and Wellbeing strategies, we have recruited a Group Health
and Safety Director who will report to our Chief Operating
Officer.
Health and safety monitoring incorporates the analysis of
accidents, near misses and dangerous occurrences. We
concluded the year with an Accident Frequency Rate (AFR)
of 0.18 representing a c.30% decrease on 2023. The AFR is
calculated by multiplying the number of reportable accidents
by 100,000 (the average number of hours worked in a lifetime)
divided by the overall number of hours worked by all members
of staff. Reportable accidents under the Reporting of Injuries
Disease and Dangerous Occurrences Regulations 1995
(RIDDOR) were 11 compared to 16 in 2023.
Our entire commercial driver fleet has been risk assessed
and received online training content that includes emissions
reductions through improved driver habits.
Community
Our operations are in the heart of local communities, with
many of our depots employing people from the surrounding
area. Such integration helps us to consider how we operate
within, and what we give back, to the communities across our
network. Many of our teams support local causes and engage
in a range of activities, such as volunteering.
At a Group level, we recognise the need to have a more
formal approach to our community programme. This year, we
embarked on a partnership with Business in the Community
(BITC) and have completed their Responsible Business Tracker
and are working to focus on priorities for 2024 and beyond.
Our work with BITC will create a strategy that defines targets
and accountabilities that will tangibly measure progress on our
community activities and engagement.
During the year, the Group donated £109,520 (2023: £85,000)
to charities excluding the additional investment on restoration
and conservation projects.
Case study
Digital devices donated to Reboot
North Yorkshire
The Group has donated 250 old tablets to a charity
which will refurbish, recycle and distribute the hardware
to a range of people in society who struggle to access
the internet. The tablets, which Vp employees no longer
use, have been donated to the charity, Reboot North
Yorkshire, which recycles IT equipment. Our devices
will be used by children from families with limited access
to the internet so they can access school lessons and
homework online. They will also be made available to
vulnerable and older people who need a device to access
online services such as banking, ordering prescriptions
and shopping, or to keep in contact with family and
friends.
250
tablets donated
The Vp Group Risk and Sustainability team with Catherine Skyvington
(centre), North Yorkshire Council library supervisor at Harrogate Library,
where Vp tablet computers were handed over to the North Yorkshire
Council Reboot scheme.
35
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Environment
03
The Group is committed to improving its environmental footprint through continual
review and adaptive management.
It is our aim to do no harm. Where negative environmental consequences of our business persist, the Group is addressing this
imbalance through finding and investing in local, impactful solutions to these global challenges. We recognise the intrinsic value of a
well-managed, functioning biosphere as well as the invaluable utility nature has in providing the many and varied ecosystem services
on which humanity depends. We acknowledge the twin challenges of biodiversity collapse and climate warming and we aim to be
part of the solution in some way, where possible.
Climate risk and policy
We are aware of the threat to our collective future that climate change poses. We recognise climate change and environmental
impacts as a principal risk to our business, while acknowledging that the construction industry and oil and gas sectors are significant
contributors when it comes to driving planetary warming. We aim to mitigate these impacts wherever possible.
Net zero target and other commitments
Scope
Target and performance
Long-term absolute reduction target
The Group commits to reach net zero GHG emissions across the value chain by
2050 from a 2023 base year.
Near-term targets
The Group commits to reduce absolute Scope 1 GHG emissions 50% by FY2032
from a FY2023 base year.
The Group also commits to reduce absolute Scope 3 GHG emissions 50%
from purchased goods and services, capital goods, use of sold products and
downstream leased assets within the same timeframe.
The Group further commits to increase annual sourcing of renewable electricity
from 87% in FY2023 to 100% by FY2030.
Short-term targets by the end of FY2025 -
not validated by the SBTi
The majority of our top 250 suppliers by emissions will have set science-based
emissions reduction targets.
All employees will be carbon literate and trained in sustainability.
The Group will reduce its energy consumption intensity (kWh/m2) 20% from a
2021 baseline.
The Group will reduce waste production intensity 30%, recycle more than 85%
waste and divert more than 95% waste from landfill using a 2021 baseline.
Renewable energy
The Group’s entire UK estate is now under a renewable electricity agreement.
We are looking to develop this mandate overseas, however, there is currently
limited availability and opportunity to achieve this in our key operating areas of
Australia, NZ, and Singapore.
Planning the journey to net zero
Detailed plans to transition to net zero greenhouse gas emissions by 2050 are currently being worked on by all our divisional
businesses. This work is helping us to identify where, and more importantly, how reductions will be made and by when. The activity
identified within each business will set us on the right path to meet our near-term targets by 2033. These plans will be consolidated
and fully costed to give our Board the level of data they need to inform decisions relating to net zero commitment dates and future
capex programmes. To build on these plans, we are training all employees in carbon literacy, to increase the workforce awareness of
sustainability, as well as updating employees on what the business is doing, and what part they play, moving forward.
Whilst we acknowledge the urgency and need for action surrounding climate change, we have chosen to keep our long-term target
at 2050. We pride ourselves on setting realistic targets and have a reputation for delivering on our promises. Having considered this
carefully, we therefore felt an achievable target with clear actionable plans would be more beneficial and would allow us to maintain
the probity of our business model given that the majority of our emissions relate to our rental fleet.
Environment, social and governance continued
36
Vp plc Annual Report 2024
Case study
Restoring Peatlands across Lancashire
A scheme to re-establish peatlands in Lancashire is
receiving funding of £10,000 from our business, a sum
which will be matched by the Lancashire Wildlife Trust.
Degraded peatlands release carbon and become a
net source of greenhouse gases, as well as losing their
biodiversity and other benefits.
The funding will be used to support a number of sites at
different stages in their restoration journey, following
historic mismanagement. Some of these sites are Sites
of Special Scientific Interest (SSSI) which need additional
help to move to full functioning peatlands, whereas
others, such as Birch House Farm, are at a much earlier
stage of recovery.
Work includes:
• Physical restoration works, such as blocking drainage
to raise water levels to restore hydrological function.
• Activities to re-establish peatland habitat on peat
soils such as re-instating peat-forming vegetation,
in places that may be drained or bare due to past
mismanagement.
Employees will be able to volunteer on the project at
four peat restoration days during the course of the year.
Offset
We are committed to reducing our impact organically and not
to rely on offsets until we can gain assurance of the probity
and long-term benefits to the environment of these schemes.
Therefore, our position remains unchanged from last year.
Biodiversity approach and programmes
Our approach is underpinned by our sponsorship of restoration
and conservation projects.
To date, the UK has failed to reverse the steep loss of
biodiversity with 41% of UK species in decline and one in
ten species threatened with extinction. To do our part, we
are proud to sponsor some of the best examples of nature
conservation projects around the UK each year including
the reintroduction of beaver, bison, lynx and eagles and the
restoration of seagrass beds, wildflower meadows, sand dunes
and peatlands.
We are especially proud to have committed support to the
training of Wildlife Trust land advisers who, given >70% of the
UK’s land is farmed, have a crucial role in promoting nature
alongside our food production to the betterment of both.
Moreover, we have made a further financial commitment for
FY2024/25. The Group is providing funding for the fourth year
to conservation projects in 2024, totalling £100k. Most of this
amount is shared between four new projects chosen by over
10% of our employees following a survey choosing from a list
of seven potential projects creating engagement and ownership
across our workforce. The projects chosen by our employees
are a rewilding project in the Scottish Highlands, a Kelp
recovery programme in Sussex, a natural flood management
scheme in Sheffield and a project to restore peatlands in
Lancashire. The balance is being divided into smaller grants
for projects that we have committed to funding previously.
The projects, which are all based in the UK, have given our
employees the opportunity to volunteer during their working
day. We believe this generates a collaborative working culture
while supporting the charities.
Case study
Natural Flood Management
in Sheffield
A flood defence scheme to protect Sheffield, combined
with nature and habitat improvement to reverse the
decline of local wildlife, is receiving £12,500 in funding
from the Group. Natural Flood Management is using
nature-based techniques to restore or mimic the natural
functions of rivers and floodplains, by storing water so
slowing the rate at which water runs into rivers. This
helps protect vulnerable communities downstream from
flooding and provide increased biodiversity and wider
ecosystem.
Activities include building ponds, swales and leaky
dams, and engaging with landowners and mapping
opportunities. The benefits of this approach include
carbon storage, water regulation and water quality
improvements, as well as increased biodiversity
through habitat creation and restoration including
habitat for the seriously endangered white clawed
crayfish. Our employees are able to volunteer to help
with environmental DNA sampling, invasive species
management and small-scale conservation tasks.
37
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Net zero roadmap
To ensure a robust transition plan, we have aligned our targets, specifically with the SBTi’s net zero standard and to a 1.5°C
planetary warming trajectory. The roadmap below demonstrates the approach the Group is taking to the various elements of work
required.
2023
2024
2033
MEDIUM
TERM
ROADMAP
TO NET
ZERO BY
2050
2024 - 2033
WASTE
By 2025, Vp will reduce waste production intensity
30%, recycle >85% waste and divert >95% waste
from landfill using a 2021 baseline
RENEWABLE ENERGY
Expand renewable electricity procurement
to 100% Vp-wide by 2030 | Explore power
purchase agreements
CONSERVATION FUND
Support fourth year of nature conservation
projects | Continue nature enhancement
across Vp
ENERGY EFFICIENCY
Vp will reduce energy consumption intensity
by 20% by 2025 from a 2021 baseline
FLEET MANAGEMENT
Continue to introduce PHEVs, EVs and
chargers in line with our target to reduce
scope 1 emissions 50% by 2033
Create costed three year
transition plans across all
Vp divisions
Vp’s net zero, near term and long term emissions
targets were validated by the SBTi
SUSTAINABLE
PROCUREMENT
Analyse first year of key supplier
sustainability datasets and manage
accordingly
The majority of Vp’s top 250 suppliers,
by spend, will have set science-based
emissions reduction targets by 2025
SOCIAL VALUE
Formalise and enhance Vp’s
social initiatives into a social
value strategy and policy
By 2033, absolute scope 1 GHG
emissions and select scope 3
emissions will be reduced 50%
from a FY2023 base year.
WATER
Consolidated water contracts to establish a baseline and set targets |
Expand grey water recycling and rainwater harvesting facilities
TRAINING
Became partners of the Supply Chain Sustainability School |
All employees will be carbon literate and trained in sustainability by 2025
SCIENCE BASED TARGETS
SUPPLIER ENGAGEMENT
TRANSITION
PLANS
2025
Share with customers data on
transport and product emissions, both
embodied and operational | Create a
customer data portal
DATA SHARING
A lower carbon operating model
In addition to the examples described above, we continue to work with our supply chain partners and customers in seeking more
sustainable solutions. For example, we have been working with Barratt Homes on HVO fuel in our telehandler fleet to replace diesel.
We have also partnered with Balfour Beatty to co-locate on a site in close proximity to the construction work going on at Sizewell C
and worked with Overbury on an on-site MEP shop at Citi-Tower in London.
Carbon intensity measure: Scope 1 and 2 emissions
0
20
40
60
80
100
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
We have reduced our greenhouse gas emissions in the last ten years on a carbon
intensity basis (which calculates tonnes of CO2 in relation to £m revenue) to 42
in FY2024.
38
Vp plc Annual Report 2024
Environment, social and governance continued
Carbon emissions inventory
Scope 1 and 2 emissions inventory FY2023/24
2024
2023
UK
Scope 1 (Tonnes CO2e)
13,469
15,946
Scope 2 Location-based (Tonnes CO2e)
1,650
1,269
Scope 2 Market-based (Tonnes CO2e)1
–
–
Total Scope 1 & 2 Location-based (Tonnes CO2e)
15,119
17,215
Total Scope 1 & 2 Market-based (Tonnes CO2e)
13,469
15,946
Energy consumption of Scope 1 & 2 (kWh)
56.9m
65.4m
Intensity Ratio Location-based Tonnes CO2e (gross Scope 1 + 2) / £1 million
revenue
46
52
Intensity Ratio Market-based Tonnes CO2e (gross Scope 1 + 2) / £1 million revenue
41
48
Global
Scope 1 (Tonnes CO2e)
15,137
18,252
Scope 2 Location-based (Tonnes CO2e)
1,859
1,460
Scope 2 Market-based (Tonnes CO2e)1
209
191
Total Scope 1 & 2 Location-based (Tonnes CO2e)
16,996
19,782
Total Scope 1 & 2 Market-based (Tonnes CO2e)
15,346
18,513
Energy consumption of Scope 1 & 2 (kWh)
64.9m
73.6m
Intensity Ratio Location-based Tonnes CO2e (gross Scope 1 + 2) / £1 million
revenue
46
53
Intensity Ratio Market-based Tonnes CO2e (gross Scope 1 + 2) / £1 million revenue
42
50
Scope 3 emissions inventory (tonnes CO2e)
Scope 3
Purchased Goods and Services (PG&S)
53,778
68,132
Capital Goods
64,897
47,604
Use of Sold Products – Use of
136,689
136,427
Downstream Leased Assets
85,843
86,953
Other Scope 3 Categories2
16,614
16,728
Total Scope 3 (CO2e)
357,821
355,844
Total Group Carbon Inventory (market based)
373,167
374,287
15%
24%
38%
18%
5%
Waste, business travel, employee
commuting, and other
Purchased goods and services
Capital goods
Use of sold products
Downstream leased assets
Scope 3 emissions - analysis by key categories
1 Location-based calculations use the average emissions intensity of the grid where we obtain the energy, while market-based calculations use the emissions intensity
based on the specific energy mix that we procure.
2 All material categories are stated above, some categories of Scope 3 were not relevant to our business model.
39
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Supply chain
04
The assessment of our sustainability performance will not be limited to our own
operations. Under our commitments to manage our Scope 3 emissions, this involves
an appreciation of carbon emissions in both upstream and downstream activities from
our operations.
Additionally, incoming regulatory standards for sustainability
disclosure will require an awareness of indirect resource
management and conditions for the workers who exist in
our supply chain. These factors will lead to enhanced audit
assessment of suppliers (e.g. equipment manufacturers) and the
reinforcement of standards that we already expect partners to
adhere to as part of our sustainable procurement policy.
Supply chain assessment and management
Our strategy related to our supply chain engagement is part of
our overall governance improvement plan.
The aim is to demonstrate to our stakeholders that we are:
• Engaging proactively with our supply chain
• Assessing where suppliers do not demonstrate the level of
governance we expect; and
• Developing action plans at divisional level to address areas
of concern, noting that our approach will be educational as
opposed to sanction.
To help us achieve this aim, we have we have partnered with
a recognised leading software platform, Eco Online. Internally
branded as “Capture”, the system provides multi-user,
group-wide access for our businesses to record accident and
near miss data, audit results and has a separate model for
Supplier Management (SM). The SM module houses a supplier
questionnaire, which we have issued to our top 80 suppliers
based on their level of carbon emissions (as opposed to
supplier turnover). We are currently developing our protocols
for analysing the results and agreeing actions where anomalous
performance exists.
We have set up a Sustainable Procurement Group chaired
by the Group Risk and Sustainability Director. Each division’s
procurement lead attends regular meetings of the group at
which there are opportunities to discuss relevant subject areas
including:
• Developing the culture of bringing sustainability into
procurement decisions, and to extend the current criteria
related to cost, availability and quality
• Understanding how cost premiums are justified for more
expensive sustainable alternatives
• The profile of Group and divisional carbon inventories
• Embodied and usage carbon challenges
• Supplier engagement methodologies
• Protocols for managing supplier data
• Development and roll-out of our sustainable
procurement policy
Notes to carbon inventory
The data on page 39 shows the Group’s 2023/24 carbon calculations/emissions inventory. Some calculations from the prior year have
been restated due to findings from the SBTi validation process. We have developed our financial reporting process to categorise our
spend more accurately - this has changed the mix between capital goods and purchased goods and services in FY2023/24.
Commentary on carbon inventory
Our calculations show that we are heading in the right direction and that internal actions hold great promise for effective
improvements in future years. We highlight in particular that our Scope 1 emissions have decreased by c.3,000 tonnes, reflecting an
increased deployment of cleaner vehicles into our fleet, and investment in route planning software in our divisions for the majority of
our commercial vehicles.
Our value chain emissions (Scope 3) represent 96% of our total Group emissions. Over 75% of our total carbon inventory relates to
three categories within Scope 3, all relating to the carbon performance of our rental fleet in both the embodied carbon and usage
carbon. The three categories are:
• Capital goods (the embodied carbon in all of our capital expenditure on our rental fleet)
• Use of sold products (the usage carbon of our sales direct to customers and from our asset disposals on an assumed useful
economic life calculation)
• Downstream leased assets (the usage carbon on the rental products rented within the financial year).
The work we are undertaking in these areas will take longer to show clear evidence of improvement (as the average useful economic
life of our assets is c.5 years). The Group has a clear commitment to reducing our impact on the environment in line with our stated
intentions. To achieve this we will need to continue to commit resources to work with our supply chain partners. Our plans set out
clear, actionable targets which will subsequently lead to a more sustainable future.
40
Vp plc Annual Report 2024
Environment, social and governance continued
Case study
Partnership approach
with our supply base
Corporate collaboration is a key
element in driving sustainability
solutions across various industries.
Our supply chain faces complex
environmental challenges that no single entity can solve
alone, making collaborative efforts essential. We have
partnered with the Supply Chain Sustainability School.
Current partnerships are leveraging shared resources,
knowledge, and innovation to achieve goals that provide
mutually beneficial data.
We are also in the process of renewing our gold status
accreditation for the Plant Charter with the SCSS. The
Charter aims to reduce onsite carbon emissions that
are harmful to human health caused by the plant and
equipment we all use.
The Group exhibiting rail solutions to customers and suppliers at Rail
Live 2023.
Indirect workforce
Our legal and regulatory obligations to protect people from
exploitation through modern slavery remains a key focus for
the Group. We are developing online training content to be
delivered to all colleagues through our learning academy and
we have also engaged in audits with our key customers in these
areas. During this year, Balfour Beatty audited two of our
divisional businesses in this area and the audits provided no
items to address.
Supply chain emissions
We are prioritising engagement with our key suppliers on
understanding their impact on our carbon inventory. This
will allow us to refine our Scope 3 emissions calculations
– at present our embodied and usage carbon figures are
based on estimates (the spend-based method). Therefore,
we are advocating that our suppliers address the following
requirements:
• Provide Environmental Product Declaration (EPD)
information. The Group has engaged with a supplier called
Hydro Aluminium UK Ltd in Derbyshire in relation to
its production and supply of intermediate products (i.e.
aluminium billets) which feed other manufacturing steps that
go into our end-use rental products.
• Challenge suppliers to find more sustainable products – from
both an embodied and usage carbon perspective.
The programme of suppliers preparing relevant EPD data is still
in its infancy, however, we are encouraged that suppliers will
continue to develop their disclosures in the short term.
41
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
General
The Board has refined its thinking around the global climate
situation and has re-iterated its commitment to ensuring
appropriate resources are allocated internally to the
management of the many risks and opportunities to our
business model and strategy. This analysis has been renewed
and refreshed for this reporting period.
We have completed a full assessment of the TCFD framework
and supporting guidance documents, including the all sector
guidance of the TCFD annex. This report provides an updated
point in time assessment of progress against the frameworks
and its requirements, and demonstrates the changes since our
previous declaration. The Group view this area of governance
as an iterative process and will continue to develop its
reporting in accordance with the requirements.
This year we have provided a greater level of transparency and
granularity regarding elements of our sustainability strategy,
which is intrinsically linked to the overall risk of climate change,
and to our overall corporate strategy. The details provided
below illustrate the work completed and planned for future
financial years.
The Group has committed to be net carbon zero emissions
by 2050 at the latest and our emissions inventory and plans
to reduce our impact on the environment were validated in
November 2023 by the SBTi. This has provided clarity on our
entire Group emissions inventory and provided focus on our
emissions hotspots.
This section of the Annual Report covers all statements made
by the Group regarding TCFD – it is not covered elsewhere in
this report.
Governance and Risk
Environmental risk is included in the Group’s Principal
Risk statement on pages 51-55. All principal risk areas are
considered by the Board and by applying the Group’s risk
management processes – more details on these processes are
included on page 51.
The Board takes responsibility for the management of risks
and opportunities arising from climate change. The Board is
informed by the Risk Committee, the Environmental Steering
Group and directly from the Group Risk and Sustainability
Director (GRSD). The Board sets the overall corporate
strategy, which ensures climate and sustainability risks and
opportunities are clearly defined from the very top and are
and being effectively managed. Critically the Group is building
resilience in its business model by continuing to invest in
sustainable hire fleet alternatives for our customers.
Regular communication is enabled between the GRSD and
wider management team through senior management meetings.
This acts as a two way process:
• To inform management of the overall strategy and their
obligations in fulfilling the elements of it; and
• Receiving feedback from the Group’s divisions regarding
customer and other stakeholder expectations and
requirements.
The below graphic illustrates the pillars of the Governance
structure in place at Vp:
Main Board plc
Group Risk and Sustainability Director
Environmental
Steering
Group
Divisional
Meetings
Risk
Committee
Audit
Committee
The Enviromental Steering Group which met four times in
FY2023/24, routinely monitors progress with, and redefines,
the strategic plan. In the reported financial year, the climate
change risk register has also been updated. The GRSD takes
responsibility for this and reports directly to the Board on
these matters. The ESG considers how governance processes
are working in practice on an ongoing basis.
TCFD
area
TCFD area
description
Vp’s
assessment
Governance a)
Board oversight
of climate-
related risks and
opportunities (CRRO)
Consistent
Governance b)
Management’s role
in assessing and
managing CRRO
Consistent
42
Vp plc Annual Report 2024
Task Force for Climate-related
Financial Disclosure (TCFD)
Strategy
The Board has ultimate responsibility for setting the strategy for delivering on the Group’s sustainability intentions. In development
of these strategic objectives the process is informed by a risk and opportunity analysis listed in summary form below and how this
links to our financial planning processes.
Strategy
Description
Related risk
Corporate
commitment
Overall corporate commitment regarding emission reduction includes
our net zero commitment and our near-term (as defined by the Science
Based Target initiative) emissions targets (2033) and longer-term net zero
aspirations (2050). The high level transition plans related to near and long-
term targets are reviewed regularly. The Environmental Steering Group is
content with the level of change being achieved.
Enhanced emission reporting.
Requirement to comply with
legal/regulatory obligations
relating to climate change.
Composition of
Vp’s hire fleet
Where possible our divisions are investing to alter the makeup of our
fleet to include more environmentally friendly options, which has a
lesser impact on the issue of climate change. Our Group is split between
powered hire fleet and products that are zero emissions at the point
of use. In reviewing the sustainability of these products our divisional
companies are considering embodied and usage emissions and working
with our suppliers to consider environmental product declarations
(EPDs).
This review remains an ongoing process and is a combination of innovation
and demand driven forces. An example of this is our submission to be
compliant with the Plant Charter which is an initiative driven by the Supply
Chain Sustainability School.
Customer preference
changes.
Sustainable
Procurement
Our Scope 3 emissions inventory highlighted where the hotspots are in
our value chain, identifying that reducing embodied carbon in the products
we procure for hire is an immediate priority. To this end, our Sustainable
Procurement Group has been active for over a year. Many workstreams
have been completed in the year which will enable the Group to move
forward, for example:
• Investment in a system to enable robust assessment of suppliers and log
the carbon emissions of the products they provide – ongoing
• Development of a sustainable procurement policy - complete
• Consideration of the recommendations of ISO 20400 (Sustainable
Procurement) - ongoing
• Transitioning to low carbon supply alternatives (general supply and fleet
for hire) – ongoing.
Transition to a lower carbon
operation.
Low carbon
operation
The Group has been successful in gaining accreditation against ISO 50001
– the energy management accreditation. The Group has also consolidated
waste and water supply ensuring better data is available to reduce usage.
Transition to a lower
carbon operation, customer
preference changes.
Awareness and
training
Our Learning and Development module will be used to deliver key
messages to all employees in the Group. We are working towards an
aspiration of ensuring all of our employees receive carbon literacy training
by the end of 2024.
Transition to a lower carbon
operation.
43
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
The following tables highlight the key risks and opportunities
that have been considered by the Environmental Steering
Group and Board. At this point the analysis below represents
the entirety of the Group’s operating locations. This analysis
is an intrinsic part of determining our strategy and is built
up using our standard risk management model, assessing
risks and opportunities using an impact and likelihood scale.
The position of the risk/opportunities on this scale will
determine management’s approach to mitigation of the risk or
pursuing the opportunity. Areas highlighted as a priority for
management are denoted with a (P).
Within the Group, impact or materiality is assessed using three
methods – impact on Group profit, impact on reputation, and
potential disruption to the Group. Likelihood is based on the
probability that the risk/opportunity is to crystallise and over
what time scale.
The timelines used in our risk analysis are:
• 2024–2026 Short Term
• 2027–2033 Medium Term
• 2033–2050 Long Term
Transition Planning: The Group sustainability team has been
working with our divisional management teams to develop
thinking with the ultimate aim of each division creating
and embedding a transition plan. We are in the process of
consolidating these plans and providing accurate costings,
which will better inform the Board on our emission reduction
pathways. These action plans set out how we transition to a
lower carbon operation including hire fleet purchasing.
Opportunities
Timelines
Perceived
impact (post
mitigation)
Response
Transition
• Changing fleet dynamic to meet customer
demand – proactive innovation and reacting to
demand (P)
• Market leadership through development of a
sustainable range of products (P)
• Engaging with technological advancements in
our strategy to reduce carbon emissions
ST – Ongoing
ST – Ongoing
ST – Ongoing
Medium
Low
Low
Our divisional management teams
are continually assessing fleet options
through product review groups.
Innovation is considered by the Board
within the overall strategy for the Group.
• Value engineering of operational processes to
consume less energy (P)
ST – Ongoing
ISO 50001 challenges the business to
achieve demonstrable change in energy
consumption.
Physical
• Greater demand for our products related to
temperature control and flood relief.
ST – Ongoing
Very Low
The Group may experience benefits
from increased rental income as climate-
related issues become more prevalent.
44
Vp plc Annual Report 2024
Task Force for Climate-related
Financial Disclosure (TCFD) continued
Risks
Timelines
Perceived
impact (post
mitigation)
Response
Transition
• Customer preference changes and regulatory
requirements to move to a “cleaner” hire
fleet (P)
ST – Ongoing
Medium
Our divisional management teams
are continually assessing fleet options
through product review groups.
Innovation is considered by the Board
within the overall strategy for the Group.
• Transition to a lower carbon operation (P)
ST – Ongoing
Medium
The varied workstreams agreed by our
Environmental Steering Group address
this risk. The completion of our Scope 3
emissions inventory has unlocked many
further areas to focus on.
• Requirement to comply with legal/regulatory
obligations relating to climate change
ST – Ongoing
Low
Our Environmental Steering Group has a
standing agenda for horizon scanning.
• Availability of capital
ST – 1-3 years
Low
Our CFO is in constant dialogue with
our lenders and how our approach to
sustainability and climate change could
impact on the business.
• Enhanced emission reporting
ST – Ongoing
Low
The Board and Enviromental Steering
Group are comfortable with the concept
of completing an emissions inventory.
Our work has been validated by the SBTi.
• GHG offset pricing
Long term
Low
The Group is focusing efforts on organic
reduction in emission values, however,
is vigilant to the offset space and the
potential impact on the business.
Physical
• Flood, extreme heat, fire, water availability,
rising sea levels, biodiversity loss
ST – Ongoing
Low
The TCFD appendix - scenario planning
(page 49) considers three planetary
warming scenarios and the impact on the
Group’s operations.
• Supply chain continuity risk
ST – Ongoing
Low
The feedback loop within the business
is our Sustainable Procurement Group,
which reports into our Enviromental
Steering Group. The Group has not
reported material supply chain issues as
at the year-end but will keep this under
continual review.
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Financial Statements
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Impact assessment
Transition – We are committed to decarbonising our supply
chain but realise this is a longer-term engagement. The general
transition risks, however, are more immediate in timing. The
Group continues to assess the impacts but, at the time of
writing, these are considered minor because our review of our
hire fleet make up is an ongoing process. The greater demand
for low carbon products (embedded and emission generating)
has been successfully built into our business planning. The Risk
Committee will continue to review this approach.
Physical – The Board recognises that the physical risk elements
mentioned above are active threats. Some elements have
experienced increased prominence in the financial year – flood
and increased rainfall is a good example.
We have overlaid the risk analysis onto our operating model
in terms of trading and supply chain locations and reliance
on key sites. The initial assessment of the impact at current
planetary warming trajectories is rated as minor. See Appendix
for further details regarding our recently completed scenario
analysis.
TCFD
area
TCFD area
description
Vp’s
assessment
Strategy a)
Risk and opportunities
identified
Consistent
Strategy b)
Impact of climate-
related risks
Consistent
Strategy c)
Resilience of strategy
considering climate-
related scenarios
Consistent
Risk management
As described on page 51 the Group’s embedded risk
management approach applies equally to climate change as it
does to any other area of management. An incumbent part of
the Group’s risk management process is to horizon scan to
assess the risk environment.
The responsibility for assessing climate risks ultimately falls
with the Environmental Steering Group. Significant issues
are formally reported to the Risk Committee and the Board
to determine the approach taken to achieve appropriate
mitigation. The governance structure within the Group is
that the Risk Committee is a sub-committee of the Audit
Committee.
The Board is routinely made aware of the following
information:
• Risk relating to climate change and sustainability matters
• The strategy determined by the Environmental
Steering Group
• The progress on key workstreams that support the overall
strategy
For the financial year being reported on, the Group Risk and
Sustainability Director attended the Board meeting twice to
discuss the above matters.
Our standard risk register model details risk owners and
control owners. It is the risk owner’s responsibility to ensure
that the controls are delivered on a timely basis and continue
to mitigate the risk identified. Where owners are multiple
and/or spread across the organisation, it is the responsibility
of the Group Risk and Sustainability Director to monitor the
mitigation. Exceptions will be raised at Risk Committee level.
The effectiveness of our risk management is continually
reviewed by our internal audit function who carry out
independent reviews of all principal risk areas and who
report into our Risk and Audit Committees. In areas
where shortcomings are raised, these will be prioritised for
remediation with an action plan. During the full year, the
Internal Audit function provided a review of the calculation
of Scope 3 emissions, the issues raised were immediately
addressed.
TCFD
area
TCFD area
description
Vp’s
assessment
Risk
management a)
Process for identifying
and assessing climate-
related risks (CRR)
Consistent
Risk
management b)
Management of CRR
Consistent
Risk
management c)
Integration of
CRR management
into overall risk
management
Consistent
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Vp plc Annual Report 2024
Task Force for Climate-related
Financial Disclosure (TCFD) continued
Metrics and targets
The principal metrics the Group calculates and reviews are
Emissions, Waste, Energy and Water use. The Group has
robust processes or defined plans in place to facilitate the
Environmental Steering Group and Board to review metrics
which drives the following actions:
• Provision of an indicator of the risk related to a particular
part of the business
• Provides a measure of trends
• Provides a measure of achievement (or likely achievement
in the case of longer-term goals) of our targets to have a
positive impact on the environment.
The Group has disclosed some of the above metrics highlighted
above in the ESG Report on pages 26 - 41.
Emissions
The Group continues to calculate Scope 1 and 2 emissions and
provides a relative measure in relation to tonnes of CO2e in
relation to £m of revenue. The detail is included on pages 38 -
39 of this report. One area the Board remains committed to is
the purchase of REGO-backed renewable electricity.
Our Scope 3 emissions inventory has been completed as
directed by GHG Protocol Technical Guidance. The Group
is using a base year of 2023 i.e. year ended March 2023. In
accordance with the requirements under SBTi validation we
have declared our Scope 3 emission figures for the first time on
page 39.
Along with the Scope 3 inventory we have submitted our near
and long-term targets to be net carbon zero by 2050.
Emissions performance against SBTi short-term targets
The Group’s complete carbon inventory is shown on page 39.
This shows our performance against our emission reduction
plans agreed with the SBTi.
• Long term targets – we have not changed our commitment
set at 2050
• Near term targets
– Scope 1 – Our global scope 1 emissions reduced by 3,115
tonnes of CO2e in the first year since our base year (2023)
was declared, representing a 17% decrease
– Scope 3 – Our global scope 3 emissions increased by 1,977
tonnes in the same period, representing a 0.55% increase.
• There has been no material change in the percentage of
renewable energy use between the base year and FY2024.
The reduction in year one or our ten year time horizon
(defined by the near-term targets) is a minimal reduction. As
a business we expect that the majority of emission reductions
will be experienced in the second half of this time horizon given
that 75–80% of our Group emissions relate to our rental fleet.
The targets set out by the Group are noted on page 36.
Financial impact
Other metrics used by the Group are change in average cost
prices in our capital expenditure, energy consumption and
remediation of physical risks (insurance/repair costs). As part
of our annual review, none of these cost elements are showing
a material impact on the Group’s operations or finances. but
are deemed gradual. As the impacts of the climate challenge
become more transparent, it will become possible to identify
material financial impacts and provide meaningful quantification.
An example of the gradual change is asset values and useful
lives of our hire assets. The Group constantly reviews this on
a division by division basis. The Board feels that this review
process would trigger any required changes under TCFD.
Targets
The Group is currently in the process of considering the data
it received in relation to water use. Once we have complete
confidence in the data sets, the Group will formally set targets.
During the year under review, the Group has gained ISO 50001
accreditation. Part of the process of gaining accreditation is
to formalise year-on-year targets for energy consumption
reduction. These targets now form our baseline and future
accreditation will be reliant on achievement. The Group will
need to demonstrate the improvements stipulated to the ISO
auditor at the time of gaining accreditation.
Once we have confidence in the data we receive the Board
will be able to formalise the suite of metrics and targets and
complete the link to the risks and opportunities identified
earlier in the report.
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Executive pay
The current remuneration packages for Executives and
Senior Management are not linked to climate-related metrics.
The Remuneration Committee will continue to keep this under
review as progress is being made with formalising metrics.
TCFD
area
TCFD area
description
Vp’s
assessment
Metrics and
Targets a)
Metrics used by the
organisation
Consistent
TCFD
area
TCFD area
description
Vp’s
assessment
Metrics and
Targets b)
Scope 1, 2 and 3
emissions
Consistent
Metrics and
Targets c)
Targets used by the
organisation
Partially
consistent – see
compliance
statement below
TCFD Compliance Statement – concluding analysis
In consideration of the ongoing assessment undertaken, the view of the Board is that this TCFD statement is not fully
consistent with the complete TCFD framework.
The Board is committed to be consistent with the TCFD and aim for this to be achieved during the financial year ended
March 2025. We have identified the last elements of work to ensure consistency with TCFD and we are confident we have an
appropriate governance structure and resource to achieve this.
Reconciliation of consistency
TCFD
area
TCFD area description
Vp’s
assessment
Vp’s roadmap to
consistency
Metrics and
Targets (c)
Targets used by the organisation
to manage climate-related risk and
opportunities and performance against
targets.
Scope 1, 2 and 3 emissions have
been reported on page 39 of this
document.
Energy/Water/
Waste targets will
be operational by
March 2025.
48
Vp plc Annual Report 2024
Task Force for Climate-related
Financial Disclosure (TCFD) continued
In order to consider both the physical and transitional risks to
our business due to future climate change, we have decided
to use three Shared Socio-Economic Pathways (SSPs) for
our analysis. SSPs build on the widely used Representative
Concentration Pathways (RCPs) with the addition of various
socio-economic factors. By combining the socio-economic
impacts of the SSPs with the physical temperature changes of
the RCPs, we can build a better picture on what the possible
impacts of future climate change may be on the Group.
One important difference between the SSPs and our previously
set targets surrounding sustainability is the difference in time
frames. The SSPs “short-term” scenario starts in 2041 whereas
our “long-term” goals end in 2050.
In order to ensure consistency, it was decided that the SSP
temperature projections would be brought forward to be
aligned with our time frames and consequently, assume the
same impact for short, medium and long-term time frames.
Because of this, we consider our approach prudent as the
impact is accelerated across the short/medium/long internal
timelines when assessing the financial impact of climate change
on our business.
Below are the options chosen for our scenario analysis along with the justifications:
SSP
Description
Justification
Associated
temperature
change
1
Driven by an increasing commitment to
achieving development goals, consumption
is oriented toward low material growth
and lower resource and energy intensity.
A ≤2°C scenario is required by the TCFD and this
scenario allows Vp to consider the financial risks and
opportunities posed from a transition to a less carbon
intensive society. This scenario is likely to initiate sudden
change and it is important We are prepared to adapt
to these changes to maximise efficiency and minimise
negative impacts on the business.
1.8
2
The world follows a path in which social,
economic, and technological trends
do not shift markedly from historical
patterns. Intensity of resource and energy
use declines. Challenges to reducing
vulnerability to societal and environmental
changes remain.
This scenario describes “middle-of-the-road” emissions
and the continuation of a transition away from fossil fuels.
This allows a gradual change in the makeup of our fleet
along with other changes enabling a sustainable transition
within the business both environmentally and financially.
2.7
5
Push for economic and social development
is coupled with the exploitation of
abundant fossil fuels. There is an
exploitation of resources through energy
intensive lifestyles.
This scenario allows the business to account for the
“worst case scenario” of warming and the potential risks
and opportunities associated with a resource and energy
intensive society. While this scenario is extreme, we
acknowledge the risks and opportunities posed to the
Company under a society prioritising development and
fossil fuel dominance.
4.4
For our scenario analysis, the risks deemed as having the largest impact were chosen in application of the above SSPs The below
risks were selected based on the perceived impact, as per the above TCFD statement.
• Customer preferences change leading to an increased demand for a cleaner hire fleet.
• Physical risks to operations and assets.
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TCFD appendix – scenario analysis
The table below provides more information under each SSP:
Requirement to consider
operating locations and
impacts of climate changes
on our key suppliers.
Risk/Opportunity
SSP 1
SSP 2
SSP 5
Customer preferences
change leading to an
increased demand for
the ‘cleaner’ hire fleet.
Physical risks to
operations and assets.
On going changes to a more environmentally friendly hire fleet in line with our customer
requirements, revenue and costs are built into ongoing budgets under a ‘ business as usual’
approach. Transition within the fleet is orderly and controlled.
Negligible overall risk
of disruption.
Low risk generally with
the potential for medium
regionalised risk.
Negligible need for financial changes
‘Business as usual’
Financial changes to be made
Explanation of risk scoring:
• Negligible need for financial changes assumes that the level
of planetary warming does not warrant enough risk to make
direct significant financial changes.
• The term “business as usual” in the above analysis refers to
the concept that we will consistently be making sustainable
changes to our hire fleet. As this will be accounted for in the
budgets and completed at a financially sustainable pace, it is
assumed that financial risk/impact overall will be categorised
as business as usual. Adapting to customer needs is
something that we and other hire companies would naturally
be reviewing on an ongoing basis so this wording allows us to
account for the adaptability of the industry. We will continue
to build on our scenario analysis in the future and create a
more thorough analysis moving forward.
• The final category “financial changes to be made” assumes
that changes above the level of “business as usual” are
scheduled to be made solely due to planetary warming.
Moving forward and based on the scenario analysis, we will
monitor the physical risk to assets and continue to work
towards our near and long-term emission reduction targets.
The Environmental Steering Group alongside our Sustainable
Procurement Group will continue to monitor any variance
from “business as usual” when considering the transition
towards a “cleaner” fleet. In the future, we will focus more
on specific sites in which physical impacts may be felt in
consideration of the wider risk assessment.
Based on the above analysis we consider that changes made
within our business align with Group strategy and business
model, and this demonstrates resilience to future climate
change detailed in the scenarios above.
50
Vp plc Annual Report 2024
TCFD appendix – scenario analysis continued
The Board recognises that good risk management aids effective decision making and helps to ensure
that risks taken on by the Group are adequately assessed and challenged.
The Board is responsible for the systems of internal control
and risk management, including reviewing its effectiveness
and determining the level and nature of risks it is appropriate
to take in delivering the Group’s strategy and its day to
day objectives. The Group’s risk management framework
is designed to ensure that all key risks are recognised, and
mitigation plans are constantly evaluated for effectiveness.
Ensuring that risk decisions are being made at the correct point
of the management structure is crucial to the success of our
programme, and to this end a project is underway to review
accountability within both the Group structure and at divisional
level. The risk management framework is under constant review
by the Board and the Executive Committee.
In line with the work to develop the Group’s corporate
governance processes, two key exercises to enhance risk
management have been delivered, further detail of which is set
out below.
Risk Committee
The Risk Committee met three times during the financial year.
The attendees are the Chief Executive, Chief Financial Officer,
Chief Operating Officer, General Counsel and Company
Secretary, Group IT Director, Group Risk and Sustainability
Director, Group HR Director and the Head of Internal Audit.
The Risk Committee reports into the Audit Committee. The
agenda is shared with the Chair of the Audit Committee in
advance of the meeting and an open invitation exists to all
meetings for our Non-Executive Directors. The meetings aim
to address key risk areas (current and emerging) that exist in
the business and consider the mitigating actions deployed.
If deemed necessary, the Group Risk and Sustainability Director
will be invited to main Board meetings throughout the year to
discuss risk management. This happened once in the financial
year to participate in a discussion regarding risk appetite.
The Committee has been successful in applying a consistent
approach to managing high-level risk in the Group and providing
additional assurance to the Audit Committee and the Board
around risk management processes in the Group.
Risk appetite
The Board recently refreshed the approach to risk appetite with
a dedicated analysis exercise. The exercise was facilitated by the
Group Risk and Sustainability Director through a 1:1 discussion
with each main Board member, followed up with a summary
presentation and discussion at our March 2024 Board meeting.
The session cemented a collective view of the level of risk the
Group is willing to take in the pursuit of its objectives and what
levels of mitigation and approach are required in each key area
of business management.
The results of the process were also discussed with our
Executive. The priority at this point is to ensure the results of
the exercise are communicated effectively with our divisional
structure to ensure all activities and work streams undertaken
are within appetite.
Process of management
In addition to the changes above, the Group has an established
risk management strategy. The Board regularly reviews
divisional and departmental risk registers as well as the
summary risk registers covering strategic, reputational and
fraud and loss risk.
All risk registers have a documented action plan to mitigate
each risk identified. The progress made on the action plan
is considered as part of the risk review process. Within the
last financial year, the Group Internal Audit department has
completed targeted assurance reviews across all departments
and divisions, the review being selected on a risk-based
approach. Internal Audit and other assurance programmes are
designed to inform the overall risk management process. The
Internal Audit plan includes the facility to engage with emerging
risks and, therefore, respond to changes in the Group’s risk
environment.
A risk register is prepared as part of all major Group initiatives.
This will include work to deliver change programmes, major
investment due diligence programmes (acquisitions and major
fleet investments) and adherence with changing regulation.
Consideration of the systems of internal control and risk
management
The Board considers the current systems fit-for-purpose and
in accordance with the guidance within the Financial Reporting
Councils “Guidance on Risk Management, Internal Control
and Related Financial and Business Reporting” document. To
this end, the Board has signed off the Effectiveness of Internal
Control and Risk Management completed for the year ended
March 2024. The diagram below summarises the layers the
Group utilises to ensure risk management is robust.
Risk management governance
Divisional Assurance Teams
Management Teams
Risk Indicator/Risk Events
Risk Committee
Executive Committee
Group Internal Audit
Group Risk & Sustainability Director
Vp plc Board
Determines appetite, assesses risk impacts, in the context of objectives
Audit Committee
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Corporate Governance
Financial Statements
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Corporate Governance
Financial Statements
Strategic Report
Risk management
Principal risks
Risk description
Mitigation
How risk
is monitored
Market and competition:
Economic cycles and headwinds can
impact our business and we have
experienced a worsening levels of
activity in some of the end market
we serve.
The equipment rental market is a
competitive marketplace and this
is constantly evolving from a risk
perspective.
Change from previous year
• Our specialist approach and diversified
business model provides some insulation to
market and competitive forces.
• Market changes are considered by our
experienced leadership team, both at
Group and divisional level.
• We provide products and services to a
range of markets with some geographic
spread.
• The Group aims to provide a first class
service to its customers in a range of
specialist niche sectors.
• Our balance sheet strength enables agility in
the competitive environment we exist in.
• A divisional structure that facilitates
consistency across budgeting, decision
making, risk management, technology and
strengthening of the Vp brand.
• The Group regularly monitors
economic conditions and our
investment in fleet can be flexed with
market demand.
• The Board monitors the revenue
activity and economic trends closely.
Many aspects of our business are
linked to the Infrastructure and
Construction markets, therefore,
long-range trends are under regular
review.
• Revenue is analysed by market
segment and Group customer
analysis is completed.
• Competitive forces and competitive
actions are experienced daily by
our divisional management teams.
Key issues are discussed with our
divisional teams and the Board
considers Group level concerns.
• Operating reviews of each business
unit to ensure alignment to Group
expectations.
People and culture:
Retaining and attracting the best
people is key to our aim of exceeding
customer expectations, enhancing
shareholder value and becoming an
employer of choice. The Group’s
attrition rate in certain operational
positions is a key priority for
reduction.
With recent senior management
changes, the blend of new and old
talent and experience is promoting
fresh momentum of activity and
energy across the Group to improve
operational excellence and grow
the business This shift has resulted
in many new workstreams e.g.
work on digital enhancement,
improved operational efficiencies
and strengthened governance. These
changes are being communicated
across the business.
Change from previous year
• Vp has many long-serving employees, but
also recognises the need for new ideas and
change in how the Group operates.
• The Group is working to deliver a working
environment that demonstrates how much
we respect and value all of our employees.
• A review of reward to ensure parity across
the divisions to provide an externally
verified approach to remuneration.
• Enhancements to succession planning,
development of our learning and
development software; and improvements
to our working environments.
• Regular update communications from the
Chief Executive delivered across the Group.
• Senior leadership team quarterly updates
from the Executive team.
• The Group fosters an inclusive working
environment where all employees are given
equal opportunity to fulfil their potential.
• A dedicated internal learning and
development team.
• Routine reporting is provided on
vacancy levels, employee turnover
by role and sickness. This is provided
for each division and at Group level.
• Training hours are monitored from
our learning and development
systems.
• External benchmarking e.g. gender
pay reporting.
• Comprehensive review of reward
to ensure parity across the divisions
to provide an externally verified
approach to remuneration.
Decreased risk
Increased risk
No change
Key to risk change
52
Vp plc Annual Report 2024
Risk description
Mitigation
How risk
is monitored
Fleet management and investment:
Organic growth – in order to grow
it is essential the Group obtains
innovative, first-class products
at attractive prices and maintains
them to ensure reliability for our
customers. The Group is aware that
the appetite for sustainable products
is increasing across its customer base.
Acquisitive growth – the Group
has a track record of delivering on
acquisitions as an enabler for growth.
These investments inherently possess
a higher risk premium.
Change from previous year
• The Group has well established processes
to manage its fleet from investment
decision, maintenance, depreciation through
to disposal.
• We have a consistent approach to the
appraisal of investment opportunities. This
is demonstrated by our consistently healthy
return on capital (ROACE).
• Enhanced review processes have been
implemented for all major capex investment
with active consideration of prior
performance to inform future decisions.
• The Group has revisited its governance
processes for acquisitive growth and
continues to review proactive and reactive
opportunities as they arise.
• ROACE is a key measure in our
business and review of this metric
will drive business decisions.
• The Board receives data on disposal
proceeds and margins, which informs
whether depreciation rates remain
suitable.
• Individual investments will be
subject to review throughout their
lifecycle to inform future investment
decisions.
Health & safety:
The Group operates in industries
where health and safety is a key
consideration for both the wellbeing
of our employees and customers
that hire our equipment. Failure in
this area would impact both our
performance and our results and
reputation.
Change from previous year
• The Group has robust health and safety
policies and management systems
supported by our induction and training
programmes. We have compliance teams
in each division with Group-level oversight.
We provide support to our customers
exercising their responsibility to their own
workforces when using our equipment.
• Some further areas have been identified
for focus in the last and current financial
year. The Group recently partnered with
Business in the Community to conduct a
Responsible Business Health Check, which
has further identified some future areas on
which to concentrate.
• We recently completed a roll-out of
enhanced driver training for our commercial
fleet drivers in an attempt to minimise road
related incidents and to improve safety for
our own employees and for members of the
public.
• A review and refresh of our crisis
management and incident response planning
has been undertaken.
• The appointment of a new Group Health,
Safety and Sustainability Director and a new
Head of Estates will help meet health &
safety requirements across our network of
branches.
• Data from our internal compliance
teams and external H&S consultants
is tabled at all Executive Committee
and main Board meetings.
• All of our trading locations are
inspected twice per year. and trend
and root cause analysis is completed
on the outputs generated.
• Group Internal Audit will include
safety matters in the scope of some
of their audits and provide further
insight to the Board.
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Financial Statements
Strategic Report
Principal risks continued
Risk description
Mitigation
How risk
is monitored
Financial:
Vp needs access to sufficient funding
at a reasonable cost. Sufficient
funding is crucial to allow agility in
delivery of our business model and
overall Group strategy.
The Group has experienced an
increased exposure to credit risk
with a slight uptick in our metric of
write-off as a percentage of turnover
due to some customers defaulting
on payments from the backdrop
of a challenging market place.
This currently sits within our risk
tolerance.
Change from previous year
• In FY2023/24 the Group re-negotiated
its borrowing facility £90 million facility
and £30 million headroom to secure the
medium to long ability to pursue business
growth. Balance sheet strength and cash
generation are key enablers to allow this
growth to be pursued.
• Our covenant metrics and gearing remain
comfortably within the stated requirements
and internal targets.
• The Group is alert to an operating
environment where credit offered by us
represents a higher risk profile.
• The Group and divisional management
teams constantly review this exposure to
ensure the optimal equilibrium between risk
and opportunity is maintained.
• Daily cash reporting forms the
lowest level indicator of our liquidity
situation. At a higher level the Board
will consider total facility, headroom
and cash generation trends.
• Debtor days by division is monitored
and negative trends are addressed
with customers.
• Proactive engagement with our
lenders in advance of renewal dates.
• Sensitivity analysis of key metrics
(including working capital and
debt)are presented to the Audit
Committee.
Governance and legal/regulatory
requirements:
Failure to comply with legal or
regulatory obligations culminating
in financial penalty, regulatory
consequences and/or reputational
damage.
The Group is alert to changes in the
corporate governance landscape
under review through training and
updates from its advisers.
Change from previous year
• The Group appointed a General Counsel
and Company Secretary in September 2023,
who is responsible for all Governance, Legal
and Regulatory matters.
• In reaction to legislation, the Group
together with the General Counsel and the
Group Risk and Sustainability Director will
implement all necessary changes.
• The Group Risk and Sustainability
Director and General Counsel/Company
Secretary meet regularly to discuss risk and
governance matters.
• Mandatory training programmes have
been specified and are targeted at the
appropriate level of employees determined
by job type.
• In the last year, the Board and the Executive
Committee, the Managing Directors and
Finance Directors have received refreshed
compliance training provided by the Group’s
level advisers. Further training will be
implemented as required.
• Regular updates and training from
external advisers.
• Our General Counsel/Company
Secretary attends our main Board
meetings to keep the Board updated.
• The Risk Committee will provide
intelligence to the Audit Committee
and Board of current regulatory
requirements as well as horizon
scanning for impending Corporate
Governance changes.
• The internal Whistleblowing policy
has been refreshed and rolled out
across the Group. All whistleblowing
reports will be thoroughly reviewed.
Decreased risk
Increased risk
No change
Key to risk change
54
Vp plc Annual Report 2024
Risk description
Mitigation
How risk
is monitored
Environmental:
The effects of climate change and
the transition to a lower carbon
economy could lead to increasing
levels of regulation.
The Group is experiencing increasing
demand from our customers for
lower carbon hire fleet alternatives.
Other stakeholder groups e.g.
employees and investors have
significant interest in how the
business reacts to the risk of
climate change and future-proofing
the business to a lower carbon
operation.
Change from previous year
• Dedicated sustainability team.
• The Group has formally declared its
intention to be net carbon zero by 2050 at
the latest. This declaration is part of a wider
body of work in relation to the quantifying
and ultimately reducing the environmental
impact of the Group’s operations.
• In November 2023, our emissions inventory
and near and long-term reduction targets
were validated by the Science Based Target
initiative.
• The results of our Scope 3 inventory
provided focus on our carbon hotspots that
required addressing.
• Our emissions inventory is the most
basic indicator of the impact our
business has on climate change.
• Energy use and water consumption
are key metrics which we are
working on to allow prioritisation in
our approach.
• Our Environmental Steering Group,
chaired by our Chief Executive
considers information and data from
its sub-committees, including our
Sustainable Procurement group. This
group works closely with our key
suppliers.
Technology and IT resilience:
Technology within Vp is seen as an
enabler to do business in a more
efficient and effective way from both
an external and internal customer
perspective. The management of
our IT offer is crucial to the future
success of the business.
As is the case with most businesses,
the Group is reliant on the consistent
availability and security of our key IT
systems. Disruption to, or failure of,
our principal systems could result in
significant disruption to our business,
potentially leading to reputation and
financial loss.
The Group continues to develop
existing systems and introduce new
software packages. As such cyber
and data risks have become an area
of increased focus and controls are
constantly evolving.
Change from previous year
•
The Group is engaged in an ongoing
digital transformation program to deliver
on improved customer experience and
to meet an overall aspiration to make Vp
an easier group to do business with. The
governance around the transformation
work is sponsored at the highest level
within the business.
•
Resilience - This area is being led by our
Group IT Director supported by our
IT Technical and development teams.
Where appropriate, consultancy is
provided by trusted third parties who
understand and validate the level of risk
the Group faces in its various processes,
systems and interfaces. From this work
some enhancements have been made
such as managed detection service and
multi-factor authentication.
•
The Group has tested continuity plans in
place and is reviewing the level of cover
we have on an ongoing basis.
•
Employee awareness of the potential risk
areas continues and is being enhanced.
•
The Group has achieved Cyber Essentials
and Cyber Essentials Plus and is working
towards ISO 27001, the international
standard to manage information security,
across our entire Group.
• Progress reports on digital work are
provided to Executive Committee
and the Board.
• System downtime is reported to the
divisions and at Group level.
• Instances of reported incidents are
considered for severity, root cause
and corrective actions required.
55
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Viability statement
The Directors have assessed the viability of the Group
In accordance with the Corporate Governance Code, the
Board have assessed the viability of the Group over the two-
year period to 31 March 2026. The Board believe this period to
be appropriate as the Group’s detailed plan encompasses this
period.
Process and scenarios considered
The Group’s detailed plan considers the profit and loss, balance
sheet, cashflows, debt and other key financial ratios over a
two-year forward-looking period. Compliance with existing
covenant arrangements and headroom to borrowing facilities
are also assessed.
The detailed plan has been subjected to sensitivity analysis
in which a number of the main underlying assumptions
are adjusted and tested to consider alternative risk-based
scenarios. The plan has been stress tested to take into account
severe but plausible scenarios.
These scenarios include consideration of market risk arising
from the impact of a downturn in economic activity. The
modelling is at least as severe as the most recent financial
downturn and more severe than the financial year 2020–21
which included two full lockdowns in our major regions.
The Board has also considered the availability of the Group’s
borrowing facilities, which have a range of maturity dates, the
earliest of which is November 2026.
While it is impossible to foresee all risks (or take into account
risks which are currently immaterial but could turn out to
be significant), mitigating activities could be performed, for
example reducing capital expenditure or discretionary spend.
In the most severe scenario modelled, the test indicates that
the Group has sufficient headroom in its borrowing facilities
and would not breach any of the associated covenants. Details
of the Group’s financing arrangements can be found in note 16.
Having assessed the current position of the Group, its
prospects and principal risks and taking into account the
assumptions above, the Board has determined that it has a
reasonable expectation that the Group is financially sound and
stable and, therefore, will be able to continue in operation and
meet its liabilities as they fall due over a period of two years
from 1 April 2024.
Non-financial and sustainability
information statement
This section of our Strategic report constitutes Vp plc’s non-financial and sustainability information. This statement has been
prepared to comply with sections 414CA(1) and 414CB(1) of the Companies Act 2006, to provide an understanding of the Group’s
development, performance and position and the impact of our activities. Information regarding non-financial matters is also included
throughout our Strategic report.
An overview of our business model is set out on pages 10-11.
Our policies are available on our website www.Vpplc.com
Reporting
requirement
Relevant policies and standards governing our approach
Where to read more
Environmental
matters
The impact of climate change is a principal concern for stakeholders and our
sustainability work reflects this.
More granular detail on the risks and opportunities posed by climate change
can be found in our TCFD disclosures.
We understand that our activities and business model do have an impact on
the environment and that we have an ongoing responsibility to minimise these
impacts.
The validation of our science-based targets and emissions inventory have
solidified our thoughts on how best to move forward with our emission
reduction plan.
Environmental Policy – website
ESG pages 26 - 41
ESG pages 26 - 41
Sustainable Procurement Policy and
Climate Change Policy – website
Climate
related
financial
disclosures
A description of the Company’s governance arrangements in relation to
assessing and managing climate related risks and opportunities can be found
in our TCFD disclosures. More granular detail on the individual risks and
opportunities posed by climate change are detailed in the disclosure.
TCFD statement inclusion in this
annual report – pages 42 - 50
Performance against our targets
agreed with the SBTi are highlighted
in detail on page 47 under paragraph
‘Emissions performance against SBTi
short term targets’.
56
Vp plc Annual Report 2024
Reporting
requirement
Relevant policies and standards governing our approach
Where to read more
Employees
Our approach is to attract the highest calibre talent into our business
irrespective of role and level of responsibility. We are working on
improving retention of our existing talented individuals through various
value adding workstreams that include reward, wellbeing focus and
working hours review.
We continue to ensure that our workforce is truly representative of
all sections of society and for each employee to feel respected, while
realising their full potential.
Our Health and Safety Policy sets out the Group’s occupational
safeguarding aims and is implemented through our Occupational Health
management system for all operational activities.
Our partnerships on restoration and conservation projects combine
with our employee volunteering programme and colleagues are able to
participate outside of their holiday entitlement.
Diversity and inclusion policy –
website
Health and Safety Policy – website
Whistleblowing Policy – website
Employee Handbook
Social matters
Community development is one of our sustainability pillars and a key
area of focus for the business. Some of our target impact areas:
Donations – we recently donated 250 end-of-life tablets to a Reboot
scheme, organised by North Yorkshire Council, which provides IT
hardware for members of society who have difficulty accessing the
internet.
For FY2024/25 we have committed to four new restoration and
conservation projects taking our investment to £100k per annum, the
highest amount in our four-year history of partnership work.
ESG - page 35
Human
rights
We continue to treat our stakeholders with fairness and respect.
Our approach to this in relation to suppliers is laid out in our Modern
Slavery Policy.
Our Modern Slavery Statement sets out the steps taken by us to
prevent workforce exploitation and human trafficking within both the
Group’s businesses and its supply chain.
We expect our suppliers to comply with the high standards we set.
We are currently engaged in a detailed diligence programme with
our supply chain. Where areas for improvement are identified we
will work with these suppliers to take any learnings to support future
development.
Modern slavery policy and statement
- website
ESG - pages 40 - 41
Anti-fraud,
bribery and
corruption
Our aim is to establish and develop a culture within the Group in which
bribery and corrupt practices are never seen as acceptable behaviours.
Our Anti-Bribery Policy outlines our approach to the prevention of
unethical conduct of this kind.
We consider ourselves to be a positive force for corporate good,
compliant will all local laws in our areas of operation and strong
economic contributor, which is underpinned by our historical and
current approach to regulatory levies as defined by our Board-
approved tax strategy.
Anti-Bribery Policy – website
Competition Law policy – website
Whistleblowing Policy - website
Group tax strategy policy – website
Employee Handbook – available for
all employees
Business
model,
principal risks
and non-
financial KPIs
We measure a number of non-financial performance indicators to
ensure the business is effectively managing its responsibilities.
Business Model – pages 10 - 12
Principal risks - pages 52 - 55
Non-financial KPIs - page 13
By order of the Board
Anna Bielby
Chief Executive
4 June 2024
57
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Strategic Report
Contents
Board of Directors
60
Governance at a glance
61
Corporate governance report
62
Nomination Committee Report
65
Audit Committee Report
67
Remuneration report
70
Directors’ report
85
Independent Auditor’s report
88
CORPORATE
GOVERNANCE
Image:
The Vienna metro extension utilises Groundforce’s
modular bracing equipment.
58
Vp plc Annual Report 2024
Financial Statements
Corporate Governance
Strategic Report
59
Vp plc Annual Report 2024
Jeremy Pilkington
Chair
Anna Bielby
Chief Executive
R
N
Stuart Watson
Independent Non-Executive Director
Phil White
Independent Senior Non-Executive Director
N
A
Keith Winstanley
Chief Financial Officer
Mark Bottomley
Independent Non-Executive Director
Sally Jones
Company Secretary
A
A
N
N
Appointment
Appointed to the Board in 1979 and
became Chair in 1981.
Previous experience
Jeremy was Chair and Officer to Chief
Executive between 1981 and 2004.
Appointment
Appointed to the Board as Chief
Financial Officer in January 2024.
Experience
Keith previously held senior finance
roles at both Lookers plc and KCOM
plc. Keith is a Chartered Accountant.
Appointment
Appointed to the Board in January 2023.
Experience
Stuart retired as a senior partner in EY
in 2017. He is a Non-Executive Director
and Audit Committee Chair of both
the Humber and North Yorkshire
Integrated Care board and Flowtech
Fluidpower plc.
Appointment
Appointed as General Counsel and Company Secretary
in September 2023.
Previous experience
Sally is a corporate lawyer with over 20 years of experience,
including General Counsel and Company Secretariat
experience at Zenith (car leasing) and KCOM plc.
Appointment
Appointed to the Board in January
2023, became Chief Executive on 1
September 2024.
Experience
Anna was previously Chief Financial
Officer at KCOM plc and Lookers plc,
before which she was a director at PwC.
Appointment
Appointed to the Board in January 2023.
Experience
Mark is currently Chief Financial Officer
of Cranswick plc and historically has
held senior finance roles in the food
production industry.
Appointment
Appointed to the Board in April 2013.
Experience
Phil has extensive experience within
both listed and private companies
including as Chief Executive of National
Express Group and Chair of Unite
Group, Lookers plc, Kier Group.
A
R
N
Key to Committee membership
Committee Chair
Audit Committee
Remuneration Committee
Nomination Committee
R
R
60
Vp plc Annual Report 2024
Board of Directors
Financial Statements
Corporate Governance
Strategic Report
5
3
1
5
Board
Audit
Remuneration
Nomination
Number of
meetings held
6
3
3
2
Executive Directors
Jeremy Pilkington
6
–
–
2
Neil Stothard
2
–
–
–
Anna Bielby
6
–
–
–
Keith Winstanley
2
–
–
–
Non-Executive Directors
Phil White
6
3
3
2
Stuart Watson
6
3
3
2
Mark Bottomley
6
3
3
2
Committee meeting attendees by invitation include (but are not limited to) the
Chair, Chief Executive and Chief Financial Officer
Board composition
Gender
1
2
3
11
11
Less than one year
One to nine years
More than
nine years
Length of service
of Directors
31 March 2024
1
3
2
Chair
Executive
Non-Executive
Balance of
Directors – Role
31 March 2024
Board
31 March 2024
Executive
Committee
31 March 2024
Wider Senior
leadership team
31 March 2024
Male
Female
Male
Female
Male
Female
Meeting attendance
Board and senior leadership training
January 2024
• Anti Trust and Competition Law Training
February 2024
• Directors’ Duties
• UK Market Abuse Regulations
• Horizon Scanning: Legal & Regulatory
• UK Corporate Governance Code 2024
• Key activities by the Board during the year
New
Strategy
Refreshed
Governance
Structure
New
Leadership
Team
Improved
focus on
stakeholder
engagement
Formation of new
Executive Committee
Simplified
management structure
Digital roadmap: driving
simplicity and consistency
Improved operational efficiency
Building on rich heritage
New corporate
development strategy
Appointment of General
Counsel and Company Secretary
Formation of new
Risk Committee
Investors
Improved governance and
internal controls and processes
Customers
Suppliers
Employees
All divisional managing
directors and finance
directors
61
Vp plc Annual Report 2024
Governance at a glance
Corporate governance report
The values and ethical standards of the
Group are based upon principles of
fairness, integrity and mutual respect”
Dear shareholders
Introduction from the Chair
The Company is led by an effective Board, which promotes
the long-term success of the Company and engages with its
shareholders and stakeholders. The Board has established the
Company’s purpose, values and strategy, and is satisfied that
these, and its culture, are aligned. The Board is also responsible
for the effectiveness of the Group’s corporate governance.
The values and ethical standards of the Group are based
upon principles of fairness, integrity and mutual respect and
the Board seeks to promote and exemplify these values
in discharging its responsibilities. These principles are
commercially central to delivering our strategic and growth
objectives and the long-term success of the Group.
The Corporate governance report is set out on pages 62 to
93 and includes the Remuneration report on pages 70 to 84.
This section of the Annual Report aims to communicate the
Group’s corporate governance standards, policies and practices
and to provide an overview of the Group’s business model and
operations, structure, activities and performance.
The Board reports that throughout the year, the Company has
applied the principles of, and complied with the provisions, of
the UK Corporate Governance Code 2018 (the Code) with the
following exceptions:
• Phil White has served as a Non-Executive Director for
more than nine years. This is considered as an indicator of
independence impairment by provision 10 of the Code. Having
considered the independence of Phil White, the Board is of
the opinion that, given Phil’s extensive experience in listed
businesses together with his knowledge of the business and
management team, Phil brings a valuable level of seniority and
experience during what has been a period of change for the
Group. Phil has also onboarded Mark Bottomley and Stuart
Watson as new Non Executive Directors (each of whom
were appointed in January 2023). The Board has therefore
concluded that Phil White remains an independent Non
Jeremy Pilkington
Chair
Executive Director. Furthermore, Phil will remain as the
Senior Independent Director as he contributes as a consistent
and experienced member of the Board, who is available to
both the Chair and shareholders as required.
• I have served as Chair for more than nine years. The Code
recommends that the term of a Chair’s appointment does
not exceed nine years (provision 19). The Board is of the
view that I bring invaluable stability, corporate memory,
industry expertise and strategic oversight. As such, the
Board considers that it is important to retain my services in
a strategic capacity.
• I previously received pension contributions of 15% of base
salary, which does not comply with provision 38 as it is not
in line with the wider workforce. As of 1 April 2024, this
is being reduced to 10% to bring it within the Code. In line
with the Group’s Remuneration Policy, Anna Bielby and Keith
Winstanley receive a lower pension contribution of 10%.
• The Group is not compliant with provision 5 in respect
of effective engagement with its workforce. Workforce
engagement does occur throughout the year, and this has
been materially improved throughout the year. The methods
of engaging with our workforce are set out on page 24 to
25 in the Stakeholder engagement section and this is led by
our Chief Executive, our Chief Operating Officer and our
Human Resources Director.
• Mark Bottomley became Chair of our Remuneration
Committee in July 2023. On appointment Mark is, and
remains, an independent Non-Executive Director but he
has not served on a previous Remuneration Committee
for 12 months, which is non compliant with provision
32 of the Code. Given Mark’s experience in the listed
business environment and his knowledge of the workings
of Remuneration Committees as an Executive Director,
the Board felt there were clear advantages to appointing
someone new in role as Chair to bring a fresh perspective to
the Committee.
The Board continues to review its governance procedures to
maintain proper control and accountability and, notwithstanding
the explanations above, the Board and its Committees continued
to act in accordance with the spirit of the Code’s principles. The
UK Corporate Governance Code 2018 is available from the
Financial Reporting Council at www.frc.org.uk
This report and the following reports of the Committees
describe the structures, processes and events through which
compliance is achieved.
Jeremy Pilkington
Chair
4 June 2024
62
Vp plc Annual Report 2024
Financial Statements
Corporate Governance
Strategic Report
Corporate governance
Board structure
During the year, the composition of the Board changed. On 1
September Anna Bielby, previously the Chief Financial Officer,
became Chief Executive replacing Neil Stothard who stood
down as Chief Executive with effect from 1 September 2023
and who retired from the Board on 30 September 2023. The
Board immediately undertook a formal recruitment process
for a new Chief Financial Officer, using an external recruiter.
During this process, Anna Bielby undertook the role of Chief
Financial Officer until 1 January 2024, when Keith Winstanley
was appointed as Chief Financial Officer. The Board is now
comprised of two Executive Directors, three Non-Executive
Directors and the Executive Chair.
Additionally in September 2023 the Board appointed Sarah
(Sally) Jones as the Group’s General Counsel and Company
Secretary.
All Directors are subject to annual re-election by shareholders
at the Group’s Annual General Meeting (AGM). Details of the
Group’s Directors are provided on page 60.
The roles of the Chair and Chief Executive are separate and
clearly defined. The Chair, Jeremy Pilkington, is responsible for
the effective working of the Board and leading the strategic
agenda for the Group. The Chief Executive, Anna Bielby, has
operational responsibility for the management of the Group’s
business and for implementation of the strategy, as agreed by
the Board.
The role of the Non-Executive Directors is to provide
independent and considered advice to the Board on matters
of strategy, risk and performance while also providing
constructive challenge, governance and oversight through the
operation of the Board’s Committees.
As set out in the Chair’s introduction on page 62, whilst the
Chair and one of the Non-Executive Directors have served
for more than nine years each, the Board has reviewed these
directorships and has satisfied itself that the contribution by
the Chair and Phil White from a strategic, oversight, continuity
and seniority perspective means that the Board is satisfied that
both Jeremy Pilkington and Phil White should remain on the
Board. The other two Non-Executive Directors are considered
as independent. There are no circumstances or relationships
which may affect judgements.
Our Non-Executive Directors are available to shareholders
if they request a meeting or have concerns, which contact
through normal channels has failed to resolve. No such
requests were received during the year.
Each Director is required, in accordance with the Companies
Act 2006, to declare any interests that may give rise to a
conflict of interest with the Company on appointment and
subsequently as they may arise. Where such conflict, or
potential conflict arises, the Board is empowered under the
Company’s Articles of Association to consider and authorise
such conflicts as appropriate and subject to such terms as they
think fit. No such conflict arose during the year under review.
The Board is assisted by the Audit, Remuneration and
Nomination Committees, from which it receives regular
updates. Separate reports from these Committees can be
found on pages 65 to 84.
Board meetings and operation
There is a clear division of responsibilities between the running
of the Board and the running of the business.
At each Board meeting, the Chief Executive delivers an
overview of performance and her thoughts on the strategic
direction, key projects and challenges facing the business,
and the Chief Financial Officer reports on the financial
performance of the Group. The Board reviews business
and financial performance, considers specific reports, and is
updated on key business areas including strategy, health &
safety, risk, people, ESG, governance, together with an update
on ongoing transformation activities. Additionally throughout
the year, the Executive Committee, managing directors and
other members of senior management deliver presentations
to the Board on proposed strategies, initiatives and ongoing or
upcoming projects.
To assist the Board’s planning and to provide clarity as to
where responsibility for decision making lies, the Board has
a clearly documented schedule of matters reserved for its
approval including:
• Strategy;
• Group results and the Annual Report and Accounts;
• Significant market announcements;
• Dividends and dividend policy;
• Annual budgets and business plan;
• Major capital expenditure, significant investments,
acquisitions or disposals;
• Environmental, Social and Governance matters;
• Review of internal control and risk management; and
• Treasury policy.
To support the refreshed governance, reporting and controls
and processes, during the course of the year, a review was
undertaken of the delegated authorities and capital expenditure
controls in place across the Group, following which updated
controls processes were implemented.
The Company Secretary assists the Chair in ensuring that
Board procedures are followed and is available to assist
Directors generally, as well as advising on matters of corporate
governance.
The Board had six scheduled meetings during the year, but
also met on other occasions and communicated regularly as
required by specific activities.
While Jeremy Pilkington, Neil Stothard (until 30 September
2023) and Anna Bielby are not members of the Audit
Committee, they did attend all meetings; they also attended,
as appropriate, Remuneration and Nomination Committee
meetings. Keith Winstanley similarly attended such Committee
meetings following his appointment.
63
Vp plc Annual Report 2024
During the year, the Non-Executive Directors met with
the Chair without the Executive Directors present, and the
Non-Executive Directors also met without the Chair present,
including an appraisal of the Chair’s performance led by the
Senior Independent Director.
The Board is satisfied that the Chair and each of the Non-
Executive Directors committed sufficient time during the
year to enable them to fulfil their duties as Directors of the
Company.
Appointments to the Board
The Nomination Committee is chaired by the Company’s
Chair, Jeremy Pilkington, supported by the Group’s Non-
Executive Directors. The Nomination Committee meets as
required to consider succession planning and to ensure that
appointments to Board roles are made after due consideration
of the skills, knowledge and experience of the potential
candidates. The report of the Nomination Committee is shown
on page 65.
As referred to on page 63, Anna Bielby was appointed as Chief
Executive Officer with effect from 1 September 2023, and
Keith Winstanley was appointed as Chief Financial Officer from
1 January 2024.
The Board appointed a Company Secretary Sarah (Sally) Jones
as General Counsel and Company Secretary in September
2023. Sally is a lawyer with over 20 years of experience in both
private practice and senior in-house roles.
The Group’s policy on diversity is set out on page 33 in the
Strategic report.
Executive Committee
In order to support robust and effective reporting and
communication, and to support engagement with the
workforce, an Executive Committee was established in
December 2023 made up of the Chief Executive, Chief Financial
Officer, Company Secretary, Chief Operating Officer, Group
HR Director, Group Risk and Sustainability Director, Group
IT Director and the Interim Director of Communications. The
Committee meets monthly and in advance of each meeting
receives detailed papers, including an overview of business and
financial performance. At the meetings, each of the members
of the Committee report on their areas of responsibility,
highlighting key projects and initiatives and any areas of
concern.
Training and induction
All new Directors receive a full, formal and tailored induction
on joining the Board, including meetings with senior
management and advisers and visits to the Group’s operational
locations. In addition, the Board undertook training from its
solicitors in February 2024 on: Director’s Duties; UK Market
Abuse Regime; and the UK Corporate Governance Code. The
training requirements of the Board are kept under regular
review.
Advice is also available from the Company’s solicitors, Auditors
and brokers as required. There is an agreed procedure for
Directors to take independent professional advice at the
Company’s expense.
Performance evaluation
The Board undertakes a periodic appraisal of its performance.
An internal evaluation of Board performance was undertaken
in 2022. Given the changes to the Board during the course of
2023, the Board has agreed to undertake a formal external
Board effectiveness evaluation during the FY2024/25.
Whistleblowing Policy
The Group’s Whistleblowing Policy enables colleagues to
report concerns on matters affecting the Group or their
employment, without fear of recrimination. Posters publicising
whistleblowing channels are distributed to all branches, depots
and offices. The Group has a dedicated whistleblowing hotline
and email inbox, which are both managed independently from
the Group. During the year, the Whistleblowing Policy was
reviewed and approved by the Audit Committee, and the Audit
Committee receives regular summaries of whistleblowing
contacts and resolutions.
Risk management
The Board retains overall responsibility for setting the Group’s
risk appetite as well as risk management and internal control
systems. As set out in the Strategic Report on page 51, the
effectiveness of the Group’s risk management and internal
control systems is under frequent review by the Board.
A Risk Committee was established during the year which
is comprised of the Chief Executive, Chief Financial Officer,
Group Risk and Sustainability Director, Chief Operating
Officer, Company Secretary, Group IT Director and Group
HR Director. This Committee meets quarterly, and reports
into the Audit Committee and includes all Non-Executive
Directors. The Director of Risk and Sustainability is also a
member of the Group’s Executive Committee and provides
monthly updates to that Committee on all risk-related matters,
management and governance.
A detailed report regarding the Group’s systems of risk
management and internal controls is prepared annually. Having
reviewed and discussed this report, the Board is satisfied
that these systems and processes are effective. The principal
and emerging risks to which the Group is exposed and the
measures to mitigate such risks are described on pages 52
to 55.
Directors’ report
The respective responsibilities of the Directors and the
independent Auditors in connection with the accounts are
explained on page 87 and the Statement of the Directors in
respect of going concern appears on page 86. The Group’s
viability statement is set out on page 56.
Annual General Meeting (“AGM”)
The AGM will be held at Rudding Park on Thursday 25 July
2024. The Notice of the AGM and explanatory notes regarding
the ordinary and special business to be put to the meeting will
be set out in a separate circular to shareholders.
Corporate governance report continued
64
Vp plc Annual Report 2024
Financial Statements
Corporate Governance
Strategic Report
Nomination Committee report
Dear shareholders
As Chair of the Nomination Committee I am pleased to report
on the work of the Committee in leading the process for
appointments to the Board and senior management roles, and
building an appropriate succession plan for the Group.
Background
The role of the Nomination Committee is to establish a
framework for appointment of Executive and Non-Executive
Directors and to ensure plans are in place for orderly and
diverse succession to both.
The Nomination Committee meets as required to assist the
Board in considering the skills, knowledge, independence,
diversity and experience requirements of the Board and senior
management, ensuring the Board and senior management’s
size, structure and composition is reviewed and refreshed as
required.
The Committee also considers succession planning in order
to ensure the continued ability of the Group to support
continuous and efficient business function, whilst nurturing
diversity and inclusion. The Group’s policy on diversity is set
out on page 33 in the Strategic report.
Membership and meetings
In addition to my role as Chair, the Committee includes the
Group’s Non-Executive Directors.
The Committee met twice during the year in order to discuss
the succession of the Group’s previous Chief Executive, Neil
Stothard, the appointment of Anna Bielby as the new Chief
Executive and the appointment of a new Chief Financial Officer.
Appointment of Directors
During the year, appointments were facilitated through both
personal recommendation and an external recruitment process.
Anna Bielby was appointed as Chief Executive Officer following
meetings held with each member of the Board. The Committee
discussed the merits of appointing Anna, as well as the
The Board supports the principle of
diversity across its Board, Executive
Committee, senior leadership teams and
wider workforce.
Jeremy Pilkington
Chair of the Nomination Committee
alternative options, together with impact on the business, and
it was unanimously agreed that she had the right skills, attitude
and capability to lead Vp as Chief Executive Officer.
Following an external recruitment process, and discussion with
each member of the Board, Keith Winstanley was appointed as
Chief Financial Officer.
Shareholders are asked to vote annually in resolutions proposing
each Director for re-election at the Annual General Meeting.
Board culture
The Board aims to enlist differences of opinion and areas
of expertise. The Chair encourages open debate to foster
a supportive and co-operative approach for all participants,
during which strategic decisions are discussed openly and
constructively. In line with its overarching strategy, the Board
aims to be open and transparent with shareholders and
other stakeholders, and for the Company to conduct itself
responsibly, ethically and fairly in all of its relationships. It is
the Board’s belief that this contributes to the greater success of
the Company, as well as being an appropriate way to conduct
relations between parties engaged in a common purpose.
Performance evaluation
As stated in the corporate governance report, the Board
undertakes a periodic appraisal of its performance. An internal
evaluation of Board performance was undertaken in 2022.
Given the changes to the Board during the course of 2023,
the Board has agreed to undertake a formal external Board
effectiveness evaluation during the financial year 2024/2025.
Diversity policy
The Board supports the principle of diversity across its
Board, Executive Committee, senior leadership teams and
wider workforce. The Group’s policy is that the Board and
its Committees should be comprised of directors who
collectively display the necessary balance of professional skills,
experience, length of service and industry knowledge and that
appointments to the Board and its Committees should be
made on merit, against objective criteria, including diversity in
its broadest sense.
The objective of the policy is to have a broad range of
approaches, backgrounds, skills, knowledge and experience
represented on the Board. The Directors believe that this
will make the Board and its Committees more effective at
promoting the long-term sustainable success of the Company
and generating value for shareholders by ensuring there is a
breadth of perspective among the Directors and the challenge
needed to support good decision making.
65
Vp plc Annual Report 2024
When appointing new Board members, the Directors will
consider gender and ethnic diversity alongside knowledge,
skills and experience. However, the Board does not feel that
it would be appropriate to set targets as all appointments are
made on merit.
The Board is aware that gender representation objectives have
been set for FTSE 350 companies and that targets concerning
ethnic diversity have been recommended for each FTSE 250
board to have the same by 2024.
Board diversity
The Board is supportive of the FCA’s recently updated Listing
Rules (LR 9.8.6R(9)) to encourage greater diversity on listed
company boards to the effect that:
i. at least 40% of the individuals on its board are women;
ii. at least one of the senior board positions is held by a
woman; and
iii. at least one individual on the board is from a minority ethnic
background.
The FCA’s disclosure requirements apply to financial years
starting on or after 1 April 2022 and will serve as guidelines
when appointing new Directors.
The Company has chosen to align its diversity reporting
reference date with the Company’s financial year-end and
proposes to maintain this alignment for future reporting
periods. The Company has met one of the three targets on
board diversity as at its chosen reference date, 31 March 2024,
the Chief Executive is a woman. Moreover, approximately
two-thirds of the Executive Committee is made up of women.
There have been no changes to the Board that have occurred
between the reference date of 31 March 2024 and the date on
which the annual financial report will be approved.
The relatively small size of the Company’s Board and,
therefore, more infrequent vacancies and opportunities for
recruitment, make achieving diversity on the Board a more
challenging, but ongoing, process. As succession planning of
the Board progresses over future years, the Company will
continue to strive for increased diversity on its Board through
its Diversity policy.
As required under LR 9.6.8 R(10), further details in respect of
the three targets outlined above, as at 31 March 2023 and 31
March 2024, are disclosed as set out below. For the purposes
of the disclosures set out below, made pursuant to LR 9.8.6
R(9) and (10), the relevant data comes from the Board directly
and, in the case of executive management, the data is contained
within the Group’s human resources management system. The
data is provided with the consent of the relevant individuals.
The Group considers that improved employee ethnicity data is
required and this will be worked upon in the coming year.
I hope that you find this report a clear account of the
Committee’s decisions for the year and I would be happy to
answer any questions you may have at the upcoming AGM.
Number
of Board
members
Percentage
of the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
Executive
management
Percentage
of Executive
management
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
Men
5
5
83
83
3
3
–
3
–
38
Women
1
1
17
17
1
1
–
5
–
62
Not specified/prefer not to say
–
–
–
–
–
–
–
–
–
–
Total
6
6
100
100
4
4
–
8
–
100
White British or other White
(including minority White
groups)
6
6
100
100
4
4
–
8
–
100
Mixed/multiple ethnic groups
–
–
–
–
–
–
–
–
–
–
Asian/Asian British
–
–
–
–
–
–
–
–
–
–
Black/African/Caribbean/
–
–
–
–
–
–
–
–
–
–
Black British
–
–
–
–
–
–
–
–
–
–
Other ethnic group,
including Arab
–
–
–
–
–
–
–
–
–
–
Not specified/prefer not to say
–
–
–
–
–
–
–
–
–
–
Jeremy Pilkington
Chair of the Nomination Committee
4 June 2024
Nomination Committee continued
66
Vp plc Annual Report 2024
Financial Statements
Corporate Governance
Strategic Report
• Developing and implementing policy on the engagement of
the external auditor to supply non-audit services, ensuring
there is prior approval of non-audit services and considering
the impact this may have on independence.
Membership and meetings
Committee members
Meetings attended
Stuart Watson – Chair
3/3
Phil White
3/3
Mark Bottomley
3/3
Since the year-end we have met twice.
As mentioned in the introduction from the Chair, Phil White
has served as a Non-Executive Director for more than nine
years. Both the Board and the Committee have considered
the independence of Phil White and have concluded that Phil
remains an independent Non-Executive Director within the
spirit and meaning of the UK Corporate Governance Code. In
particular, Phil White facilitates experienced management of
the Group and has a valuable level of seniority and experience
during what has been a period of change for the Group.
The Committee is authorised to seek outside legal or other
independent advice as it sees fit, but has not done so during
the year.
The qualifications of the Committee members are outlined in
the Directors’ biographies on page 60. The Board is satisfied
that each member of the Committee has recent and relevant
financial experience as required by the Code. The effectiveness
of the Committee in fulfilling its remit was considered by the
Board as part of the most recent evaluation of its performance.
Other regular attendees
The Chair, Chief Executive, Chief Financial Officer, Head of
Internal Audit, Group Risk and Sustainability Director, External
Audit Partner and members of the external audit team attend
by invitation as required.
The Group’s Company Secretary attends as secretary to the
Committee.
Meetings with internal and external Auditors without
management present are held at least once a year.
Dear shareholders
I am pleased to present our Audit Committee report for the
year ended 31 March 2024.
Main responsibilities of the committee
The Audit Committee provides an independent overview of
the effectiveness of the financial reporting process and internal
financial control systems including:
• Reviewing the financial statements of the Group, including its
annual and interim reports, trading updates and preliminary
results announcements, reporting to the Board on the
significant issues considered by the Committee in relation to
the financial statements and how these were addressed;
• Advising the Board in relation to whether the Annual Report
is fair, balanced and understandable;
• Keep under review the Group’s internal financial controls
and risk management systems, including arrangements for
whistleblowing and the detection of fraud and error;
• Monitor and review the scope, remit and effectiveness of the
Group’s internal audit function;
• Consider and recommend to the Board the appointment,
reappointment, and remuneration of the external
Auditors, including considering tendering the external audit
appointment;
• Assessing the scope and results of the annual external audit
and reporting to the Board on the effectiveness of the audit
and the independence and objectivity of the Auditors;
• Reviewing significant legal and regulatory matters; and
• Reporting to the Board on how the Committee has
discharged its responsibilities.
The Board is responsible for the overall
system of internal controls for the Group
and for reviewing its effectiveness.”
Stuart Watson
Chair of the Audit Committee
67
Vp plc Annual Report 2024
Audit Committee report
Activities undertaken during the year
The activities undertaken included:
• Reviewed PwC’s audit strategy and plan for the audit of the
year ended 31 March 2024, including materiality and areas of
particular audit focus;
• Agreed the PwC audit engagement letter and the statutory
audit fee for the year ended 31 March 2024;
• Confirmed the independence of the external Auditors and
assessed the effectiveness of their work;
• Reviewed and discussed the report from PwC setting out
their comments and findings arising from their audit;
• Reviewed and discussed the financial statements and
considered management’s significant accounting judgements
and policies being applied;
• Reviewed the basis for preparing the financial statements as
a going concern and the viability statement included in the
financial statements, and recommending them to the Board;
• Assessed the Annual Report and recommended it to the
Board as being fair, balanced and understandable;
• Considered the findings of Group Internal Audit and the
management response to their findings;
• Reviewed and approved the Group Internal Audit plan for
the year to 31 March 2024;
• Reviewed the effectiveness of the risk management and
internal control systems and recommended to the Board
that they be considered effective; and
• Undertook the annual review of the effectiveness of the
Audit Committee.
Significant accounting issues
In respect of the year to 31 March 2024, the following
significant issues were reviewed.
Going concern and viability statement
The basis for adopting the going concern assumption in the
financial statements is discussed on page 86 of this report. The
Group Viability statement is on page 56.
The Committee, therefore, reviewed management’s paper on
the budget and forecasts for two years, including downside
sensitivity analysis.
We reviewed and approved the continued adoption of
the going concern assumption in the financial statements,
concluded that two years remains an appropriate time horizon
for the Viability statement and approved the Viability statement
disclosure in the financial statements.
Existence and valuation of rental equipment
The Group holds a significant quantum and carrying amount
of rental equipment. Management carries out fleet checks to
confirm the existence of the rental fleet. We have reviewed
management’s judgement in estimating the useful economic
lives, residual values and any impairment of rental assets.
Intangible assets – goodwill
The Group’s opening balance sheet includes £44.6 million of
goodwill. The Group has taken a £28.1 million impairment
charge against intangible assets, including £26.1 million
against goodwill. This goodwill is not amortised but is
subject to an annual impairment test. We have considered
the appropriateness of the assumptions and estimates used
by management in assessing the carrying value of goodwill.
The Committee has specifically considered the discount and
growth rates used in the cashflow projections used to assess
the carrying value of goodwill allocated to the Brandon Hire
Station CGU. Cashflow projections for Brandon Hire Station
have also been considered against current year performance
and budgets. More information is available in note 10.
Fair balanced and understandable views
The Committee reported to the Board its conclusion that
the Report and Accounts for the year ended 31 March 2024,
taken as a whole, is fair, balanced and understandable, and
provides the information necessary for shareholders to assess
the Company’s position and performance, business model and
strategy.
Risk management and internal controls
The Board is responsible for the overall system of internal
controls for the Group and for reviewing its effectiveness. The
responsibilities and processes in respect of risk management
are described on page 51. The Committee has reviewed the
process for identifying, evaluating and managing significant risk
faced by the Group. Risk management reports for each of
the divisions, as reviewed also by Group Internal Audit, were
submitted for review to the Audit Committee. The reports
highlighted risks and mitigating controls. The Committee also
considered the risk tolerance levels that the Group is prepared
to accept in the course of carrying out its business.
The Committee monitored and reviewed the Group’s internal
control systems, accounting policies and practices, risk
management procedures and compliance controls. Internal
control systems are designed to manage rather than eliminate
business risk. They provide reasonable but not absolute
assurance against material misstatement or loss. Management
is responsible for establishing and maintaining adequate internal
control over financial reporting for the Group.
The Committee also reviews the Group’s whistleblowing
policy. There have been no whistleblowing reports that
required changes in the control environment during the year.
The Committee has concluded that the Group continues
to operate a well designed and effective system of internal
controls.
68
Vp plc Annual Report 2024
Audit Committee report continued
Financial Statements
Corporate Governance
Strategic Report
Group internal audit
The Group Internal Audit function provides assurance that the
Group’s system of internal control is effective and appropriate
to the level of risk facing the Group.
The Internal Audit plan is considered and approved at set
intervals by the Committee. The current plan runs from 2023
to 2025, with facility to engage with emerging and new risks
as required. In reviewing the proposed plan, the Committee
considers the Group’s strategic priorities, specific initiatives
which could impact the business, and the Group’s risk register.
The Committee assess the appropriateness of the Group
Internal Audit plan and the resourcing of the Group Internal
Audit function to deliver it. Progress against the plan is
assessed at each Committee meeting.
During the year, the Chair of the Committee met with the
Head of Internal Audit twice, to discuss completed projects
and issues arising. The Head of Internal Audit attended each
Audit Committee meeting and presented Group Internal Audit
reports. The Committee considered the results of Group
Internal Audit and the adequacy of management’s response to
matters raised in them. The Committee were satisfied with the
reports and the management response to them.
Auditor’s effectiveness and independence
The Committee keeps the scope, cost and effectiveness of
the external audit under review. The Committee assessed the
effectiveness of the external audit process during the year,
based on feedback from the Group Finance Team and Group
Internal Audit, and through Committee interactions with the
external Auditors. As a result, the Committee has satisfied
itself that PricewaterhouseCoopers LLP (PwC), the external
Auditors, has provided an effective audit service.
The Committee ensures that the Auditors remain independent
of the Group and reviews this on an annual basis. PwC
provided a written report to the Committee to show its
compliance with professional and regulatory requirements
designed to ensure their independence. The Committee has
satisfied itself that they remain independent.
The Committee has a policy in relation to the use of the
Auditors for non-audit services, set out in an appendix to the
Committee terms of reference. In the year, the only non-audit
service provided by the Auditors was a subscription to an
accounting knowledge portal with fees of £1,300 representing
0.2% of the audit fee.
PwC were first appointed as the Group’s Auditors in October
2014 for the audit of the year ended 31 March 2015 and
re-appointed in October 2021 following a tender process.
Tom Yeates has completed his third year as the Group’s audit
partner.
The Committee recommended to the Board that a resolution
to re-appoint PwC as Auditors be proposed at the Annual
General Meeting. I hope that you find this report a clear
account of the Committee’s decisions for the year and I
would be happy to answer any questions you may have at the
upcoming AGM.
Stuart Watson
Chair of the Audit Committee
4 June 2024
69
Vp plc Annual Report 2024
Our focus moving into FY2025 is on starting to implement a
refreshed long-term strategy and continuing to deliver sector
leading results across each of our key markets. In approving
remuneration outcomes for the year ended 31 March 2024, the
Committee took into account the aforementioned financial and
operational performance and considered also the experience of
its main stakeholders. We are comfortable that actions taken
on pay during the year across the Group were appropriate.
Board changes
During the year, Vp made a number of changes to its Board
and senior leadership team, with the Committee in each
case having determined the remuneration arrangements for
outgoing and incoming Directors, in accordance with the policy
approved by shareholders.
After 26 years with Vp, including roles as Finance Director,
Managing Director and most recently Chief Executive, Neil
Stothard retired from the Group and stood down from the
Board on 30 September 2023. Neil’s notice period runs until 30
June 2024, during which time he will continue to receive base
salary, pension and other contractual benefits in accordance
with the policy. As a retiree, Neil was considered a “Good
Leaver” for the purposes of his variable incentives, and
remained eligible for an annual bonus in respect of the financial
year ended 31 March 2024, pro-rated for his period of active
service. Neil’s outstanding LTIP awards granted in 2021, 2022
and 2023 were pro-rated for time served (where applicable)
and remain subject to the original performance conditions set.
Further details are set out on page 79.
Neil was succeeded as Chief Executive by Anna Bielby, who had
served as Chief Financial Officer of the Group since 1 January
2023. In determining Anna’s remuneration package in her new
role, the Committee took into account her recent experience
serving as a Board Director at Vp and previous experience
at a number of other UK-listed companies. Anna’s starting
salary as CEO was set at £400,000 - slightly lower than her
predecessor and around 10% below market for the role (based
on data provided by the Committee’s external adviser). In line
with the policy, and subject to her continued performance
and development in role, the Committee intends to increase
Anna’s salary to a more market-aligned rate of £450,000 with
effect from April 2025. Anna continues to receive a pension
contribution of 10% of salary, and her variable incentive
opportunities remain unchanged at 150% of salary under the
annual bonus and 100% of salary under the LTIP (in both cases
aligned with her predecessor).
After considering a range of internal and external candidates,
the Board was pleased to appoint Keith Winstanley as Vp’s
new Chief Financial Officer with effect from 1 January 2024.
Keith’s base salary was set at £270,000 – 13% lower than his
predecessor – which took into account his relevant experience
in senior finance leadership roles at other FTSE-listed
companies, while acknowledging that this would be his first
Board Director role. In line with the policy, the Committee will
look to increase Keith’s salary to market levels over the short
to medium term subject to his performance and development
Dear shareholders
On behalf of the Remuneration Committee, I am pleased
to present the Directors’ remuneration report for the year
ended 31 March 2024. I am delighted to have taken over as
Remuneration Committee Chair following the AGM in July
2023, having served on the Committee since my appointment
to the Board at the start of the 2023 calendar year. Phil White,
former Chair of the Committee, remains a member of the
Committee and I would like to thank him for his continued
support.
As in previous years, this report is split into three sections: this
Annual statement, the Directors’ remuneration policy report
and our Annual report on remuneration for the year ended 31
March 2024. Our Remuneration policy was last submitted to
shareholders at the 2023 AGM, with the Committee pleased to
receive 91.38% votes in favour. No changes are being proposed
to the policy this year; however, we have reproduced the
Policy report in full over pages 72 to 76 for ease of reference
and in order to provide context to the decisions taken by the
Committee during the year.
Background
The year to 31 March 2024 saw robust overall results despite
a mixed market backdrop. Group revenues and adjusted profit
before tax, amortisation, impairment of intangible assets and
exceptional items (PBTAE) were 0.8% and 1.9% down on the
prior year. Challenging conditions in the general construction
and housebuilding divisions were offset by further strong
performance across the rail, transmission and water sectors
covered by our infrastructure division. Operational excellence
has remained a priority throughout the year, with continued
progress against both the Group’s digital roadmap and ESG
ambitions, reflecting our customers’ needs and providing an
important point of differentiation for Vp.
Mark Bottomley
Chair of the Remuneration Committee
70
Vp plc Annual Report 2024
Remuneration report
Financial Statements
Corporate Governance
Strategic Report
in role. The remainder of Keith’s remuneration package was
aligned with his predecessor and our recruitment policy,
including a pension contribution of 10% of salary, an annual
bonus opportunity of 150% of salary and a maximum annual
LTIP award of 100% of salary.
2023/24 Remuneration outcomes
Base salary – also see page 77
In line with the Group-wide salary increase, the Committee
approved a 4% salary increase for Anna Bielby and Neil
Stothard which took effect from 1 April 2023; Jeremy
Pilkington’s salary was not increased during the year. As noted
above, on taking up the role of Chief Executive, Anna’s base
salary was increased to £400,000. Keith Winstanley’s salary on
appointment as Chief Financial Officer was set at £270,000.
Pensions – also see page 77
As long-serving employees, pension contributions for Jeremy
Pilkington and Neil Stothard (until his retirement) remained at
15% of base salary during the year. As of 1 April 2024, this is
being reduced to 10% for Jeremy Pilkington. Anna Bielby and
Keith Winstanley received a pension contribution of 10% of
salary.
Annual bonus – also see page 77
The maximum bonus opportunity for the financial year ended
31 March 2024 was 150% of salary.
Targets for the annual bonus were set by the Committee at
the beginning of the financial year and were based upon growth
PBTAE. Targets are set by the Committee to be stretching and
generally reflect year-on-year growth, with entry thresholds set
in line with the Group’s budget PBTAE for the relevant financial
year and full payout requiring a material outperformance of
budget. A similar approach to target setting is taken in respect
of other Group and divisional participants to ensure fairness
and alignment.
For 2023/24, the Committee approved a PBTAE range of £42.0
million (threshold) to £48.0 million (maximum), which was
considered to be both stretching and motivational at the time
the targets were set. Reflecting challenging market conditions,
actual PBTAE1 was £39.7 million, which meant that no bonuses
were payable to Executive Directors in respect of the 2023/24
financial year. No discretion was used to adjust this formulaic
result, reflecting the Committee’s view that the outcome is
a genuine reflection of the performance of the business and
appropriately reflects the experience of stakeholders during
the year.
LTIP – also see page 77
LTIP awards granted to Jeremy Pilkington and Neil Stothard in
2021 reached the end of their performance period at 31 March
2024. Vesting of these awards was based wholly on three-year
absolute EPS performance, underpinned by a minimum ROACE
hurdle. Similar to the annual bonus, and despite the Group’s
resilient performance, a mixed market backdrop meant that the
stretching performance targets were not met and accordingly
these awards will lapse in full in July 2024. The Committee
considered that this outcome was both appropriate and a fair
reflection of underlying performance over the period, and
accordingly has not exercised any discretion in respect of this
vesting result.
Implementation of policy for 2024/25
Base salary – also see page 81
Following a review of Executive Directors’ base salaries, the
Committee approved an increase of 3% for Anna Bielby and
Keith Winstanley with effect from 1 April 2024, in line with the
average increase applied across the wider workforce. Jeremy
Pilkington’s salary will again remain unchanged.
Pensions – also see page 81
To align more closely with the wider workforce pension
contributions for Jeremy Pilkington will reduce from 15% to
10% of base salary. Anna Bielby and Keith Winstanley will
continue to receive a pension contribution of 10% of salary.
Annual bonus – also see page 81
The maximum bonus opportunity will remain at 150% of base
salary for all Executive Directors. Bonuses will be based on
challenging growth targets for PBTAE derived from the Group’s
budget, with the maximum payout target set at a level which is
stretching and appropriately reflects the maximum opportunity
available. As in previous years, details of the target range and
the Group’s actual performance will be disclosed in next year’s
report. In line with the policy, deferral may apply to any bonus
earned in excess of 100% of salary where a Director has not,
at the time of payment, met their minimum share ownership
requirement.
LTIP –also see page 81
Executive Directors will each receive an LTIP award in 2024/25
with face value of 100% of salary. Vesting of this year’s awards
will continue to be based on the achievement of challenging EPS
growth targets, underpinned by a minimum ROACE hurdle,
details of which are set out later in this report.
Looking forward
The Committee will continue to monitor market developments
throughout the year and will consider the appropriateness of
any emerging trends for the Group. I hope that you find this
report a clear account of the Committee’s decisions for the
year and I would be happy to answer any questions you may
have at the upcoming AGM.
This report has been approved by the Board and is signed on
its behalf by:
Mark Bottomley
Chair of the Remuneration Committee
4 June 2024
1 These measures are explained and reconciled in the Alternative Performance Measures section on page 143.
71
Vp plc Annual Report 2024
Directors’ remuneration policy report
This report has been prepared in accordance with the
provisions of the Companies Act 2006, and Schedule 8 of the
Large and Medium-sized Companies and Groups (Accounts
and Reports) Regulations 2008 (as amended). It also meets the
requirements of the UK Listing Authority’s Listing Rules and
the Disclosure and Transparency Rules.
The Vp remuneration policy was approved by shareholders at
the 2023 AGM on 20 July 2023, and came into effect from that
date. The report, save for the minor changes listed below, is as
disclosed in the 2023 Directors’ remuneration report, which
is available to download from the Company’s website at www.
vpplc.com/investors:
• References to financial years have been updated where
appropriate.
• Pay-for-performance charts have been updated to reflect
packages for Executive Directors for the financial year ending
31 March 2025.
• New service contract dates have been added and details of
external appointments have been updated.
Policy overview
The Group aims to balance the need to attract, retain and
motivate Executive Directors of a high calibre with the need
to be cost effective, while at the same time appropriately
rewarding performance. The Committee has designed a
remuneration policy that balances those factors, taking account
of prevailing best practice, investor expectations and the level
of remuneration and pay awards made generally to employees
of the Group. Our remuneration policy is consistent with the
principles set out in Provision 40 of the 2018 UK Corporate
Governance Code, namely:
• The policy is clear, simple and easy to understand, with a
single short and long-term incentive and a small number of
important financial targets. Our approach to remuneration
has remained broadly consistent for a number of years and is
well-understood both internally and externally;
• The design and implementation of the policy takes into
account possible risks. Incentive targets are set by the
Committee ahead of each cycle to be appropriately
stretching and achievable within the risk appetite set by
the Board, and the Committee has discretion to adjust
outcomes where the formulaic assessment would lead to
an outcome that is misaligned with underlying Company
performance. Where it is deemed appropriate, an expanded
list of recovery provisions ensures that the Committee can
withhold or recover incentives in certain cases;
• Incentives are clearly and appropriately capped. The
balance of pay is aligned with market norms and a significant
proportion is dependent on the achievement of stretching
short and long-term targets; and
• Performance measures are aligned with our strategy and
culture.
Policy table for Directors
Purpose and link
to strategy
Operation
Opportunity
Performance metrics
Base salary
To attract, retain
and motivate
individuals with
skills and experience
required to deliver
the strategy. To
provide a competitive
fixed reward
Base salaries are reviewed
annually, taking into account
a range of relevant reference
points. Any changes are
normally effective from 1 April
in the financial year
Current salary levels are set
out on page 77. In determining
Executive Director salary
increases, the Committee
considers the range of increases
for the broader employee
population
None
Pension
To provide retirement
benefits in a
cost-efficient
manner
All Executive Directors are
either members of a defined
contribution scheme or
receive a cash allowance in lieu
of pension contribution
The maximum pension
contribution for Executive
Directors appointed prior to
July 2020 is 15% of salary. As
of 1 April 2024 the pension
contribution for Jeremy Pilkington
has been reduced to 10%. The
maximum pension contribution
for Executive Directors appointed
since July 2020, and for future
Executive Director appointments,
is 10% of base salary
None
72
Vp plc Annual Report 2024
Remuneration report continued
Financial Statements
Corporate Governance
Strategic Report
Purpose and link
to strategy
Operation
Opportunity
Performance metrics
Taxable benefits
To provide market
consistent benefits
Can include car allowance,
health insurance and other
benefits paid from time to
time. The cost of providing
benefits is paid monthly or as
required for one-off events
Benefits values vary by role and
are reviewed periodically relative
to the market. It is not anticipated
that the cost of benefits provided
will change materially year-on-
year over the period for which
this policy will apply
None
Annual bonus
To provide a direct
link between annual
performance and
reward. To incentivise
achievement of
stretching short-term
performance targets
Performance measures
and targets are set by the
Committee at the start of the
year to reflect the Group’s
strategic priorities. At the end
of the year, the Committee
determines the extent to
which these have been
achieved
Annual bonuses are typically
paid in cash following year-end.
For the 2023/24 annual bonus
onwards, where an Executive
Director has not met their
minimum share ownership
requirement at the time of
payment, any bonus earned in
excess of 100% of salary will
be deferred in shares
Payments under the annual
bonus are subject to malus and
clawback provisions, further
details of which are set out in
the notes to this table
Up to 150% of base salary
Bonuses for Executive
Directors will be based
primarily on financial
performance. The Committee
retains flexibility to introduce
an element based on relevant
non-financial measures, where
appropriate (with a total
weighting of not more than
25% of bonus)
The Committee retains
discretion to adjust the
formulaic bonus outcome
(either upwards or
downwards) if it considers
that the payout is inconsistent
with the Company’s underlying
performance when taking into
account any factors it considers
relevant
Long-Term Incentive
Plan (LTIP)
To drive sustained
long-term performance
that supports the
creation of shareholder
value
Annual grant of nil cost
options, which normally vest
after three years, made in
accordance with the LTIP rules
For awards made from 1 April
2021, an additional holding
period applies so that the total
vesting and holding period is at
least five years. Shares subject
to awards may accrue dividend
equivalents. Sufficient shares
can be sold at the end of three
years to cover tax liabilities
The LTIP award to Jeremy
Pilkington will typically be in
the form of notional shares
settled by cash. LTIP awards
are subject to malus and
clawback provisions, further
details of which are set out in
the notes to this table
Up to 100% of base salary
The vesting of awards will
be subject to continued
employment and performance
against relevant metrics
measured over a period of
at least three years. The
Committee will select
performance measures ahead
of each cycle that reinforce
delivery of the Company
strategy. Details of the
performance measures attaching
to awards (and the targets for
these) will be disclosed in the
relevant Annual report on
remuneration
The Committee retains
discretion to adjust the
formulaic LTIP outcome (either
upwards or downwards) if it
considers that the payout is
inconsistent with the Company’s
underlying performance when
taking into account any factors it
considers relevant
73
Vp plc Annual Report 2024
Purpose and link
to strategy
Operation
Opportunity
Performance metrics
Save as you Earn
To encourage share
participation in the
entire workforce
HMRC approved plan under
which regular monthly savings
are made over a three-year
period and can be used to
fund the exercise of an option
whereby the exercise price is
discounted by up to 20%
Up to the savings limit as
determined by HMRC from time
to time (or such lower limit as
determined by the Committee),
across all sharesave schemes in
which an individual has enrolled
None
Share Ownership
Guidelines
To ensure strong
alignment between
Executive Directors
and shareholders
Shareholding to be built
up within five years of
an Executive Director’s
appointment
At least 100% of salary for
Executive Directors
On stepping down from the
Board, Executive Directors will
typically be required to retain
shares to the lower of 100% of
salary or their actual shareholding
at the time. These shares must
be held for at least one year
post-cessation
None
Non-Executive
Director fees
To attract and
retain high calibre
Non-Executive
Directors
To reflect the time
commitment and
responsibilities of
the role, and the fees
paid by similar sized
companies
Fees are reviewed on an
annual basis and are currently
paid 100% in cash
The Company retains
flexibility to pay either
a single ‘all-in’ fee or to
differentiate fees to reflect
additional responsibilities (e.g.
to the Senior Independent
Director, Chairs of Board
Committees, etc.)
No prescribed maximum increase
None
Notes to the policy table
Malus and clawback policy
Annual bonus payments and LTIP awards granted prior to the approval of the remuneration policy detailed in this report (i.e. prior
to July 2023) are subject to clawback in the event of a material misstatement of results.
For annual bonuses and LTIP awards granted following approval of this policy, malus and clawback will apply in cases of a material
misstatement of results, an error in determining performance outcomes, gross misconduct, corporate failure as determined by the
Remuneration Committee, or where a participant has been deemed to have caused, in full or in part, a material loss for the Group
as a result of negligent, reckless or wilful actions or inappropriate behaviour or values. Cash bonuses will be subject to clawback,
with deferred shares subject to malus. LTIP awards will be subject to malus and clawback over the vesting period to the fifth
anniversary of grant.
Payments under existing awards
The Company will honour any commitment entered into, and Directors will be eligible to receive payment from any award granted,
prior to the approval and implementation of the remuneration policy detailed in this report, even if these commitments and/or
awards fall outside the above policy (but were in line with the policy in force at the time, if so required).
Performance measures and targets
Performance measures applying to the annual bonus and LTIP are selected at the start of each performance cycle to reflect the
Group’s short and longer-term strategic objectives. Incentive targets are set at an appropriately stretching level, taking into account
relevant internal and external reference points. LTIP targets will typically be disclosed prospectively in the remuneration report.
Illustration of application of remuneration policy
The chart below illustrates the total remuneration for each Executive Director that could result from the remuneration policy in
2024/25 under different performance scenarios.
The value of base salary for 2024/25 is set out on page 77.
74
Vp plc Annual Report 2024
Remuneration report continued
Financial Statements
Corporate Governance
Strategic Report
The value of taxable benefits in 2024/25 is taken to be the value
of taxable benefits received in 2023/24 as shown in the single
total figure of remuneration table set out on page 77 (valued
on a full-year equivalent basis for Keith Winstanley). On target
performance assumes bonus payout of 75% of salary and LTIP
vesting at 50% of maximum award.
Maximum performance assumes bonus pay out of 150% of base
salary and LTIP vesting at 100% of maximum award. Share price
appreciation has been included in the value of the LTIP under
the fourth scenario, at an assumed 50%.
Jeremy Pilkington
Percentages/Amounts (£000)
Max inc 50%
share app
Maximum
On plan
Minimum
£518
100%
27%
30%
47%
32%
21%
42%
37%
28%
36%
£1,930
£1,106
£1,694
Anna Bielby
Percentages/Amounts (£000)
Max inc 50%
share app
Maximum
On plan
Minimum
£469
100%
28%
32%
48%
31% 21%
41%
36%
27%
36%
£1,705
£984
£1,499
Keith Winstanley
Percentages/Amounts (£000)
Max inc 50%
share app
Maximum
On plan
Minimum
£322
100%
28%
32%
48%
31%
21%
41%
36%
27%
36%
£1,156
£670
£1,017
Bonus salary, benefits and pension
Annual bonus
LTIP
Consideration of employment conditions
elsewhere in the Group
In designing this remuneration policy, the Committee did not
expressly seek the views of employees. Through the Board,
however, the Committee is regularly updated as to employee
views on remuneration more generally. Additionally, when
making decisions around Executive Director remuneration, the
Committee takes into account the pay and conditions of other
employees to ensure fairness.
Overall, there is a strong degree of alignment between the pay
of senior executives and other employees, as follows:
• Our approach to annual salary reviews is consistent
across the Group, with consideration given to the level of
experience, responsibility, individual performance and salary
levels in comparable companies.
• There are a number of pension arrangements across
the Group. However, with the exception of some legacy
arrangements for long-serving employees, the majority of
senior management is eligible for a pension contribution of
up to 10% of salary, subject to their own contribution level.
• Most employees are eligible to participate in an annual
bonus scheme. The maximum opportunities available are
based upon the seniority and responsibility of the role
with business area specific metrics incorporated where
appropriate.
• Certain senior managers can qualify to participate in
the LTIP. Performance conditions are consistent for all
participants, while award sizes vary by organisational level.
• Employees can qualify to participate in approved and
unapproved share option schemes whereby they are granted
rights to acquire shares at a predetermined price, which
cannot be less than the midmarket price on the dealing day
immediately before the date of the award. Awards under
these schemes are not granted to Executive Directors.
• All UK employees are eligible to participate in the Company’s
SAYE scheme on the same terms.
Approach to recruitment
The Group operates in a highly competitive employment
market. The Committee’s approach to remuneration on
recruitment is to pay sufficient to attract appropriate
candidates to the role. The package of a new Executive
Director is likely to include the same elements, and be subject
to similar constraints as those of existing Executive Directors.
In particular:
• The base salary of a new Executive Director will be
determined by reference to relevant market data, experience
and skills of the individual, internal relativities and their
current basic salary. The Committee may set the salary
for a newly appointed Executive Director above that of
their predecessor where it considers it necessary in order
to recruit an individual of sufficient calibre for the role.
Alternatively, where a new Executive Director has their
starting salary set below market level, any shortfall may be
managed with phased increases over a period of up to two
years subject to the individual’s development in the role (and
which may exceed the workforce average increase).
• New appointees will receive company 10% pension
contributions or an equivalent in cash allowance. Benefits
will generally be aligned to those offered to other Executive
Directors.
• The annual bonus structure described in the policy table
will apply to new Executive Director appointees, with the
maximum opportunity (i.e. up to 150% of salary) being
pro-rated to reflect the proportion of the year worked.
• New appointees will be granted awards under the LTIP on
the same terms as other Executives Directors, as described
in the policy table (i.e. up to 100% of salary).
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Vp plc Annual Report 2024
The Committee may make an award in respect of a new
appointment to “buy-out” incentive arrangements forfeited on
leaving a previous employer on a like-for-like basis. In doing so,
the Committee will consider relevant factors including time to
vesting, any performance conditions attached to these awards
and the likelihood of those conditions being met. Any such “buy-
out” awards will typically be made under existing annual bonus
and LTIP schemes, although in exceptional circumstances the
Committee may exercise discretion under the relevant Listing
Rule to make awards using a different structure. Any “buy-
out” awards would have a fair value no higher than the awards
forfeited.
Date of Directors’ service contracts or
letter of appointment
Director
Date of service contract/
letter of appointment
Jeremy Pilkington
10 June 2002
Phil White
15 April 2013
Anna Bielby
1 January 2023
Mark Bottomley
3 January 2023
Stuart Watson
3 January 2023
Keith Winstanley
1 January 2024
The service agreements of the Executive Directors are
terminable by either the Company or the Director on between
six and twelve months’ notice. The contracts contain no
specific provision for compensation for loss of office, other
than an obligation to pay salary and benefits for any notice
period waived by the Company. Non-Executive Directors
are appointed under letters of appointment one of which
is terminable on six months’ notice and the other two are
terminable on thirty days notice. There were no other
significant contracts with Directors.
The terms and conditions of appointment the Executive and
Non-Executive Directors are available for inspection by any
person at the Company’s registered office during normal
business hours and at the AGM.
Approach to leavers
The Company’s policy is to limit severance payments on
termination to pre-established contractual arrangements. Such
contracts contain no specific provision for compensation for
loss of office, other than an obligation to pay for any notice
period waived by the Company, where pay is defined as salary
plus benefits only.
The following payments may also be made to departing
Executive Directors, depending on circumstances. In all cases,
the Committee retains discretion to alter these provisions on
a case-by-case basis following a review of circumstances and to
ensure fairness for both shareholders and participants:
• An annual bonus may be payable for the period of active
service in certain prescribed “good leaver” circumstances
and in other circumstances at the discretion of the
Committee and subject to the achievement of the relevant
performance targets. Outstanding deferred bonus awards
will typically be retained by a departing Executive Director
with no acceleration of the applicable deferral period;
• Unvested LTIP awards will normally lapse. For “good leavers”,
unvested awards will typically vest on the normal vesting
date subject to the achievement of any relevant performance
condition(s) and with a pro-rata reduction applied to reflect
the proportion of the vesting period served. LTIP awards,
which are subject to an additional holding period, will typically
be retained and released at the end of the relevant holding
period;
• At the discretion of the Committee, a contribution to
reasonable outplacement costs may be made where
considered appropriate. The Committee also retains the
ability to reimburse reasonable legal costs incurred in
connection with a termination of employment; and
• Any payment for statutory entitlements or to settle claims
in connection with a termination of any existing or future
Executive Director may be made, as necessary.
Policy on external appointments
Executive Directors are encouraged to hold a non-executive
role in addition to their full-time position in order to broaden
their experience, and may retain any fees received in respect
of such roles. All appointments must first be agreed by the
Committee and must not represent a conflict to their current
role. During the year:
• Jeremy Pilkington, Keith Winstanley and Neil Stothard held
no external directorships and
• Anna Bielby is a director of BLB (UK) Limited, a dormant
professional services company.
Consideration of shareholder views
The Committee considers shareholder feedback received
at the AGM each year. This feedback, plus any feedback
received during other meetings, is then considered as part
of the Group’s ongoing review of remuneration. Given the
best-practice nature of changes proposed, the Committee
did not engage directly with major shareholders during
the most recent policy review. The Committee, however,
remains committed to engagement with investors and their
respective bodies should any material changes be made to the
remuneration policy in future.
Details of votes cast for and against the resolution to approve
last year’s Annual report on remuneration and in respect of the
current remuneration policy are set out on page 84.
76
Vp plc Annual Report 2024
Remuneration report continued
Financial Statements
Corporate Governance
Strategic Report
Annual report on remuneration
The following section provides details of how the remuneration policy was implemented during the financial year ending 31 March
2024 and how it is proposed to be implemented in the financial year ending 31 March 2025. Any information in this section of the
report subject to audit is highlighted.
Single total figure of remuneration (audited)
The following table shows a single total figure of remuneration for the year ended 31 March 2024 together with the comparative
figures for 2023.
Salaries
and fees
Taxable
benefits
Pensions
Annual
bonus
Grant date
face value
of vested
LTIP
shares
Share price
appreciation
(depreciation)
Total
Total
fixed
pay
Total
variable
Executive Directors
£000
£000
£000
£000
£000
£000
£000
£000
£000
Jeremy Pilkington
2024
471
–
71
–
–
–
542
542
–
2023
471
–
71
212
34
(6)
782
542
240
Neil Stothard
2024
204
12
31
–
–
–
247
247
–
2023
392
25
59
176
27
(5)
674
476
198
Anna Bielby
2024
363
16
36
–
–
–
415
415
–
2023
75
4
8
34
–
–
121
87
34
Keith Winstanley 2024
68
4
7
–
–
–
79
79
–
2023
–
–
–
–
–
–
–
–
–
Non-Executive Directors
Phil White
2024
50
–
–
–
–
–
50
50
–
2023
46
–
–
–
–
–
46
46
–
Mark Bottomley
2024
50
–
–
–
–
–
50
50
–
2023
12
–
–
–
–
–
12
12
–
Stuart Watson
2024
50
–
–
–
–
–
50
50
–
2023
12
–
–
–
–
–
12
12
–
The table above reflects the following changes in roles and responsibilities:
• Neil Stothard stood down as Chief Executive on 1 September 2023 and retired from the Board with effect from 30
September 2023;
• Anna Bielby joined the Board as Chief Financial Officer on 1 January 2023, and was promoted to Chief Executive with effect from
1 September 2023;
• Keith Winstanley joined the Board as Chief Financial Officer on 1 January 2024; and
• Mark Bottomley and Stuart Watson joined the Board as Non-Executive Directors on 3 January 2023.
Base salaries and fees
Following a review of the Executive Directors’ base salaries, the Committee approved an increase of 4% for Neil Stothard and
Anna Bielby with effect from 1 April 2023, in line with the average increase applied across the Group. Anna’s salary was increased
to £400,000 on her promotion to CEO and Keith Winstanley was appointed as CFO on a salary of £270,000. Jeremy Pilkington’s
salary remained unchanged and there was no increase to the fees payable to Non-Executive Directors during the year.
Taxable benefits
Taxable benefits consist primarily of company car or car allowance and private health care insurance.
Pension benefits
As long-serving employees, Jeremy Pilkington and Neil Stothard received 15% of base salary in lieu of pension contributions. As of 1
April 2024, this is being reduced to 10% for Jeremy Pilkington. Anna Bielby and Keith Winstanley receive 10% of base salary in lieu
of pension contributions.
77
Vp plc Annual Report 2024
Annual report on remuneration continued
Annual bonus payments
The annual bonus out-turn presented in the table was based on Group profit before tax, amortisation, impairment of intangible
assets and exceptional items targets as measured over the 2023/24 financial year.
Targets for annual bonus payments typically are set by the Committee at the beginning of the financial year and are based upon
growth in adjusted profit before tax, amortisation, impairment of intangible assets and exceptional items (PBTAE). The targets are
challenging and look for year-on-year growth with entry thresholds set in line with the Group’s budget PBTAE for the relevant
financial year.
For 2023/24, the Committee approved a PBTAE target range of £42.0 million (threshold) to £48.0 million (maximum), which was
considered to be suitably stretching and motivational. Reflecting challenging market conditions, actual PBTAE was £39.7 million,
which meant that no bonuses were payable to Executive Directors in respect of the 2023/24 financial year. Although disappointing,
the Committee is satisfied that this outcome delivered is a genuine reflection of the performance of the business and appropriately
reflects the experience of stakeholders in financial year.
Maximum (%
of salary)
PBTAE
required for
threshold
bonus (0% of
salary)
PBTAE
required for
maximum
bonus (150%
of salary)
Actual
PBTAE
Actual % of
salary
Actual
bonus
Executive
%
£m
£m
£m
%
£000
Jeremy Pilkington
150
42.0
48.0
39.7
–
–
Neil Stothard
150
42.0
48.0
39.7
–
–
Anna Bielby
150
42.0
48.0
39.7
–
–
Keith Winstanley
150
42.0
48.0
39.7
–
–
Vesting of LTIP awards (audited)
The LTIP figures included in the 2022/23 single total figure of remuneration have been updated from last year’s report to reflect the
actual share price at the date of vesting in July 2023 of £5.75 (vs. a three-month average share price to 1 May 2023 of £6.88).
The 2023/24 single total figure of remuneration includes zero value in respect of the LTIP. Vesting of the awards granted in July
2021 was dependent on earnings per share performance over the three years ended 31 March 2024, the achievement of a minimum
return on average capital employed of 12% and continued service until July 2024. Despite the Group’s resilient performance, as a
result of a mixed market backdrop, the stretching performance targets were not met and these awards will lapse in full.
The performance targets for this award and actual performance against those targets was as follows:
Metric
Threshold
target
Stretch
target
Actual
%
Vesting
Earnings per share1
89.65 pence
109.58 pence
74.8 pence
–
ROACE2
12.0%
12.0%
14.5%
–
1 EPS is measured on a net basis, in accordance with International Financial Reporting Standards, but excluding IFRS 16 profit impact and assuming
a fixed corporation tax charge on profits currently at the rate of 25% and excluding any amortisation, impairment of intangible assets and
exceptional items shown on the face of the Income Statement or in the notes to the Company’s accounts and utilising the whole of the issued
ordinary share capital of the Company, assuming a constant level of issued ordinary share capital over the three years, in this case 40.154 million
shares.
2 Return on average capital employed is calculated by dividing the profit before tax, interest, amortisation, impairment of intangible assets and
exceptional items excluding IFRS 16 profit impact by the aggregate of average net assets and average net debt consistent with those shown in the
management accounts of the Company for the relevant financial year.
78
Vp plc Annual Report 2024
Financial Statements
Corporate Governance
Strategic Report
Vesting of LTIP awards (audited) – continued
The LTIP award details for the Executive Directors are as follows
Number of
shares at
grant July
2021
Number of
shares to vest
July 2024
Grant date
face value of
vested shares
Estimated
value
of shares
vesting
Metric
£000
£000
Jeremy Pilkington
51,800
–
–
–
Neil Stothard
41,900
–
–
–
The award of the LTIP above was based upon the policy of awarding up to an equivalent of 100% of salary. As recent joiners, neither
Anna Bielby nor Keith Winstanley held awards under the 2021 LTIP.
Share scheme interests awarded during the financial year (audited)
The following awards were granted to Executive Directors:
Executive
Scheme
Basis of award
granted
Date of grant
Share price
at date of
grant £
Number of
shares
Face value
£000
Performance
period end
date
Jeremy Pilkington
LTIP 100% of salary
20 July 2023
5.68
82,996
471 31 March 2026
Neil Stothard
LTIP 100% of salary
20 July 2023
5.68
71,894
408 31 March 2026
SAYE
N/A
24 July 2023
5.98
753
5
N/A
Anna Bielby
LTIP 100% of salary
20 July 2023
5.68
54,978
312 31 March 2026
SAYE
N/A
24 July 2023
5.98
753
5
N/A
The share price at the date of grant has been used to calculate the face value of the awards granted. Targets for LTIP awards were
disclosed in last years report, with performance in line with threshold resulting in 0% vesting, rising on a straight-line to 100%
vesting for stretch performance. Anna Bielby’s 2023 LTIP was granted when she was Chief Financial Officer, using her base salary at
the time. Keith Winstanley did not receive an LTIP award during the 2023/24 financial year.
Leaver arrangements for Neil Stothard (audited)
Neil Stothard retired as Chief Executive on 1 September 2023, and stood down from the Board on 30 September 2023, with
his notice period running until 30 June 2024. As noted in the Chair’s Statement on page 62, the Committee determined the
remuneration arrangements for Neil in line with the approved policy, as follows:
• Neil will continue to receive base salary, pension and other contractual benefits until 30 June 2024. In respect of the period to
31 March 2024 covered by this report, Neil received phased payments in lieu of base salary of £203,774, pension supplements of
£30,566 and benefits of £12,498 after stepping down from the Board.
• As a retiree and “Good Leaver”, Neil remained eligible for an annual bonus in respect of the financial year ended 31 March 2024,
pro-rated for his period of active service. As noted on page 78, no bonus was earned by Executive Directors for 2023/24.
• Neil was similarly treated as a “Good Leaver” for the purposes of his outstanding 2021 LTIP award. As noted on page 73,
the performance conditions applying to the 2021 LTIP were not met and accordingly the entire award will lapse. Neil has
been treated as a “Good Leaver” also for the purposes of his outstanding 2022 and 2023 LTIP awards. In both cases, these
awards were pro-rated to reflect the proportion of the period served (equating to 33,133 and 23,965 shares respectively). The
proportion of these awards, which ultimately vests, will be calculated in accordance with the original performance conditions.
Payments to past directors and for loss of office (audited)
Details of the leaver arrangements for Neil Stothard are detailed in the section above. No other payments were made to past
Directors or for loss of office in the year ended 31 March 2024.
79
Vp plc Annual Report 2024
Annual report on remuneration continued
Outstanding share awards (audited)
The table below sets out details of unvested share awards held by Executive Directors. Details of vested awards are shown in the
statement of Directors’ shareholdings and share interests as below.
Executive
Scheme
Grant
date
Exercise
price
£
No. of
shares
at
1 Apr
2023
Granting
during
the year
Vested
during
the year
Lapsed
during
the year
No. of
shares
at 31
Mar
2024
Exercise
period
End of
performance
period
Jeremy
Pilkington
Total LTIP Various
Nil 179,000
82,996
4,718
62,682 194,596
Jul 2024 to
Jul 2033
31 Mar 2024 to
31 Mar 2026
Neil
Stothard
Total LTIP Various
Nil 145,000
71,894
3,738
114,158
98,998
Jul 2024 to
Jul 2033
31 Mar 2024 to
31 Mar 2026
SAYE
2020
5.84
616
–
616
–
–
Oct 2023 to Mar
2024
N/A
SAYE
2021
6.93
519
–
–
29
490
Oct 2024 to Mar
2025
N/A
SAYE
2022
5.60
642
–
–
321
321
Jan 2026 to
Jun 2026
N/A
SAYE
2023
4.78
–
753
–
544
209
Oct 2026 to Mar
2027
N/A
Total SAYE
1,777
753
616
894
1,020
Anna
Bielby
Total LTIP
29 July
2023
Nil
–
54,978
–
–
54,978
Jul 2026 to
Jul 2033
31 Mar 2026
SAYE
2023
4.78
–
753
–
–
753
Oct 2026 to
Mar 2027
N/A
Keith Winstanley held no outstanding share awards at any point in the year.
Statement of Directors’ shareholdings and share interests (audited)
Shareholding
as % of salary
/fee at 31 Mar
2024
Shares
beneficially
owned at 31
Mar 2024
Shares
beneficially
owned at 31
Mar 2023
Options
vested but
not yet
exercised 31
Mar 2024
Options
vested but
not yet
exercised 31
Mar 2023
Unvested
LTIP awards1
Outstanding
SAYE awards
Jeremy Pilkington
*
29,220
29,220
257,281
252,563
194,596
–
Neil Stothard2
2,334%
864,790
864,790
–
–
98,998
1,914
Anna Bielby
–
–
–
–
–
54,978
753
Keith Winstanley
–
–
N/A
–
N/A
–
–
Stuart Watson
17%
1,505
–
N/A
N/A
N/A
–
Neither of Phil White or Mark Bottomley held any shares at any point in the year.
The share price used to calculate the value of shares beneficially owned for the purposes of establishing shareholding as a
percentage of salary is the share price as at 31 March 2024: £5.50.
*During the year, Jeremy Pilkington was interested in shares owned by Ackers P Investment Company Limited. This company is
ultimately controlled by a number of trusts of which, for the purposes of Sections 252 to 255 of the Companies Act 2006, Jeremy
Pilkington is deemed to be a connected person. As at 31 March 2024, Ackers P Investment Company Limited owned 20,181,411
shares (2023: 20,181,411 shares).
The LTIP awards outstanding in respect of Jeremy Pilkington are notional shares, which would be settled by a cash payment.
The Executive Directors are each in compliance with the Company’s requirements to hold shares equivalent to at least 100%
of salary, to be built up within five years of appointment. Both Anna Bielby and Keith Winstanley have five years to meet this
requirement having been appointed on 1 January 2023 and 1 January 2024 respectively.
There were no changes in the interests of the Directors between 31 March 2024 and 4 June 2024.
1 Unvested LTIP awards are subject to performance conditions.
2 Shareholding and share interests for Neil Stothard reflect the position as at the date of stepping down from the Board on 30 September 2023.
80
Vp plc Annual Report 2024
Financial Statements
Corporate Governance
Strategic Report
Implementation of the remuneration policy for the year ending 31 March 2025 (unaudited)
A summary of how the Directors’ remuneration policy will be applied during the year ended 31 March 2025 is set out below.
Base salary and fees
The Committee approved a 3% increase in base salary for Anna Bielby and Keith Winstanley from 1 April 2024, in line with the
average salary increase across the Group. No increases are proposed for the Executive Chairman or for the Non-Executive
Directors.
1 April 2024
£000
1 April 2023
(or date of
appointment)
£000
% increase
Jeremy Pilkington
471
471
–
Anna Bielby
412
400
3%
Keith Winstanley
278
270
3%
Phil White
50
50
–
Mark Bottomley
50
50
–
Stuart Watson
50
50
–
A salary increase averaging 3% across the Group was proposed at the annual 2024 pay review, effective from 1 April 2024.
Pension arrangements
To align more closely with the wider workforce, pension contributions for Jeremy Pilkington will reduce from 15% to 10% of base
salary. Anna Bielby and Keith Winstanley will continue to receive 10% of base salary in lieu of pension contributions.
Annual bonus
The maximum bonus potential will remain at 150% of base salary. Bonuses will continue to be based on challenging growth targets
for PBTAE, with the maximum payout target set at a level that appropriately reflects maximum opportunity available.
The Committee is of the opinion that the performance targets for the annual bonus are commercially sensitive and that it would be
detrimental to the interests of the Group to disclose them before the start of the financial year. The targets will be disclosed after
the end of the relevant financial year in that year’s remuneration report.
Long-term incentives
The maximum LTIP award in 2024 will remain at 100% of salary for all Executive Directors. Consistent with past awards, the extent
to which any LTIP awards granted in 2024 will vest will be dependent upon the achievement of a challenging target growth in the
Group’s adjusted earnings per share, underpinned by Group ROACE.
The targets for the LTIP awards granted in 2024 are as follows:
Year of award
Threshold
target (0%
vesting) for
EPS
Stretch target
(100% vesting)
for EPS
Target for
ROACE
2024
82.68
97.62
12%
Clawback and malus provisions in the event of significant misstatement of the results will apply to both the annual bonus and the
long-term incentive as noted on page 74.
81
Vp plc Annual Report 2024
Annual report on remuneration continued
Performance graph and table (unaudited)
The following graph charts the Total Shareholder Return of the Group and the FTSE Small Cap Index over the ten-year period from
1 April 2014 to 31 March 2024.
0.00
50.00
100.00
150.00
200.00
250.00
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Apr-23
Vp plc
FTSE Small Cap
The FTSE Small Cap index excluding investment trusts is regarded as an appropriate benchmark for the Group’s shareholders, being
an index which the Group has previously been a constituent of during the period shown. Total shareholder return is defined as the
total return a shareholder would receive over the period inclusive of both share price growth and dividends.
The total remuneration and incentive payouts for the Executive Chair, Jeremy Pilkington, across the same period were as follows:
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Single figure (£000)
2,259
1,613
1,580
1,498
1,770
919
915
1,098
782
542
Annual bonus (% of maximum)
100
27
72
57
94
–
75
54
30
–
LTIP vesting (% of maximum)
100
100
100
100
100
71
–
24
7
–
Executive Chair pay ratio (unaudited)
The table below provides the ratio between the Executive Chair single figure of total remuneration and total remuneration for UK
employees identified at the lower quartile, median and upper quartile. Consistent with previous years, and reflecting that the data
is already readily available, we have selected the comparative employees using hourly rate data as at 5 April 2023 collected for our
reporting under the gender pay gap legislation (Option B). The day by reference to which the date for the three percentiles was
determined was 31 March 2024.
Pay ratio
Remuneration
Year
Method
25th
percentile
Median
75th
percentile
25th
percentile
Median
75th
percentile
Total remuneration
2024
B
22
18
12
£24,265
£29,331
£46,010
Salary
2024
B
20
17
11
£23,507
£28,293
£42,417
Total remuneration
2023
B
34
28
20
£23,502
£27,863
£39,743
Salary
2023
B
21
18
13
£22,955
£27,000
£35,598
Total remuneration
2022
B
49
41
29
£22,527
£26,880
£38,200
Salary
2022
B
21
18
14
£22,160
£26,000
£34,334
Total remuneration
2021
B
44
38
27
£20,554
£24,238
£33,366
Salary
2021
B
23
20
15
£20,466
£23,968
£30,905
Total remuneration
2020
B
44
37
27
£20,650
£24,624
£33,731
Salary
2020
B
23
20
15
£20,131
£23,915
£30,600
82
Vp plc Annual Report 2024
Financial Statements
Corporate Governance
Strategic Report
The Committee has considered the pay data for the three individuals identified and believes that it fairly reflects pay at the relevant
quartiles among our UK workforce. The median total remuneration ratio has fallen further this year (from 28:1 to 18:1) reflecting
that there was no payout recorded under either the annual bonus or long-term incentive. The Committee has considered the
findings of the pay ratio analysis and believes that it is reasonable in the context of the Group’s sector and taking into account the
composition of the Group’s UK workforce.
Percentage change in all Directors’ remuneration (unaudited)
The table below shows the percentage change in the Directors’ salary, benefits and annual bonus between the financial year ended
31 March 2023 and 31 March 2024 compared to the percentage change for UK employees of the Group for each of these elements
of pay.
Salary
Taxable
benefits
Annual bonus1
Jeremy Pilkington
2024
–
–
(45%)
2023
–
(100%)
9%
2022
5%
1,600%
100%
2021
(5%)
(33%)
(100%)
Neil Stothard
2024
4%
–
(43%)
2023
3%
–
43%
2022
8%
2%
100%
2021
(4%)
(4%)
(100%)
Anna Bielby
2024
32%
–
N/M
2023
N/A
N/A
N/A
Keith Winstanley
2024
N/A
N/A
N/A
Phil White
2024
8%
–
N/A
2023
3%
–
N/A
2022
5%
–
N/A
2021
(4%)
–
N/A
Mark Bottomley
2024
–
–
N/A
2023
N/A
N/A
N/A
Stuart Watson
2024
–
–
N/A
2023
N/A
N/A
N/A
UK Employees
2024
(5%)
(18%)
(19%)
2023
5%
10%
43%
2022
12%
5%
169%
2021
1%
(7%)
(67%)
N/A – not applicable, either because the Director is not eligible for the element of pay or there is no prior year comparative figure.
N/M – not meaningful, e.g. a change from a prior year comparative figure of zero.
The percentage change for UK employees is based upon a consistent set of employees and is calculated using P60 and P11D data.
The employee data set includes employees from all employing entities, including Vp plc, in order to reflect fairly the position across
the Group.
1 To be comparable to the data for the UK employees the annual bonus for the Directors disclosed above is the bonus paid in the relevant tax year.
83
Vp plc Annual Report 2024
Relative importance of spend on pay (unaudited)
The following table shows the Group’s actual spend on pay (for all employees) relative to dividends
2023
2024
% change
Staff costs
£m
123.3
124.3
1%
Dividends
£m
14.5
15.0
3%
Dividend figures relate to amounts paid in respect of the relevant financial year.
Remuneration Committee (unaudited)
The Group’s approach to Executive Directors’ remuneration is determined by the Board on the advice of the Remuneration
Committee.
The primary role of the Committee is to:
• Review, recommend and monitor the level and structure of remuneration for Executive Directors;
• Approve the remuneration packages for Executive Directors; and
• Determine the balance between base pay and performance-related elements of the package so as to align Directors’ interests to
those of shareholders.
The Committee’s terms of reference are set out on the Company’s website.
The members of the Remuneration Committee, all independent Non-Executive Directors, during the year under review were as
follows:
• Phil White (Committee Chair until 20 July 2023)
• Mark Bottomley (Committee Chair from 21 July 2023)
• Stuart Watson
Biographical information on Committee members and details of attendance at the Committee meetings during the year are set out
on pages 60 and 66.
External Advisors
During 2023/24, the Committee received advice on remuneration matters from Ellason LLP (Ellason), who were recommended by
the Committee members’ external networks. Ellason are signatories of the Code of Conduct for Remuneration Consultants, details
of which can be found at remunerationconsultantsgroup.com, and the Committee is therefore satisfied that the advice it receives
from Ellason is independent and objective. The Committee is also satisfied that there is no connection between the advisers and
the Company or individual Directors. The fees paid by the Company to Ellason during the financial year were £9,360 (on the basis
of time and materials) which related to Executive Director benchmarking and Remuneration Reporting drafting support. Ellason
provided no other material services to the Company or to the Group,
Annual General Meeting voting outcomes (unaudited)
The following table details votes for and against the 2023 Directors’ remuneration policy and the Directors’ remuneration report
for 2022/23, along with the number of votes withheld. The Committee will continue to consider the views of shareholders when
determining and reporting on remuneration arrangements.
Directors’ remuneration
policy 2023
Directors’ remuneration
report 2022/23
Votes for
30,858,360 (91.38%)
33,760,970 (99.98%)
Votes against
2,910,178 (8.62%)
7,768 (0.02%)
Votes withheld
900
700
The Company’s remuneration policy was approved by shareholders at the Annual General Meeting held on 20 July 2023 and applies
for up to three years. The Remuneration Committee’s Annual Report for 2022/23 was approved at the Company’s Annual General
Meeting held on 20 July 2023.
Annual report on remuneration continued
84
Vp plc Annual Report 2024
Financial Statements
Corporate Governance
Strategic Report
The Directors of Vp plc present their annual report and the audited financial statements of the Group
and Parent Company for the year ended 31 March 2024.
Principal activities
The principal activity of the Group is equipment rental and
associated services.
Strategic report
Pursuant to sections S414c(11) Companies Act 2006,
elements of required reporting including future developments,
engagement with others, and environmental matters are
included within the Strategic report, which can be found on
pages 1 to 57.
Results and dividend
Group loss after tax for the year was £5.3 million (2023: profit
£23.0 million). The Directors recommend a final dividend of
27.5 pence per share. Subject to approval, the final dividend will
be paid on 7 August 2024 to all shareholders on the register as
at 21 June 2024.
Directors
Details of the Directors of the Company who were in office
during the year and up to the date of signing the financial
statements are given on page 60. Details of Directors’ interests
in shares are provided in the directors’ remuneration report on
page 79. During the financial year, and up to the date of approval
of these financial statements, the Group has maintained an
appropriate level of Directors’ and Officers’ insurance whereby
Directors were indemnified against liabilities to third parties.
This is a qualifying third party indemnity provision.
Share capital
Details of the Company’s share capital structure are shown in
note 21 to the accounts. All shares have the same voting rights.
There are no restrictions on the transfer of shares in the
Company or restrictions on voting rights.
Substantial shareholders
As at 22 March 2024, the following had notified the Company
of an interest of 3% or more in the Company’s issued ordinary
share capital.
Number of
ordinary
shares
Percentage
of issues
ordinary
shares
%
Ackers P Investment Company
Limited
20,209,411
50.33
Jupiter Asset Management
1,824,250
4.54
Chelverton Asset Management
1,633,921
4.07
Invesco Asset Management
Limited
1,430,017
3.56
Aberforth Partners
1,427,965
3.56
Schroder Investment
Management
1,421,073
3.54
Canaccord Genuity Wealth
Management
1,250,000
3.11
Jeremy Pilkington is a Director of Ackers P Investment
Company Limited, which is the holding company of Vp plc.
Financial risk management
Consideration of the financial risk management of the Group
has been included in the Strategic report on page 54.
Engagement with stakeholders
We set out on page 24 of the Strategic report how the Group
meets the needs and expectations of its stakeholders.
Disclosure of information under Listing Rule 9.8.4.
The Directors confirm that the Company has entered into a
relationship agreement with Ackers P Investment Company
Limited (a controlling shareholder) and has complied with
the independence provisions of the agreement. As far as
the Directors are aware, the controlling shareholder and its
associates have also complied with the independence provision.
Pursuant to Listing Rule 9.8.4 the Company is required to
disclose that an arrangement is in place whereby the trustee
of the Company employee benefit trust has agreed to waive
present and future dividend rights in respect of certain shares
that it holds, as the Trust only holds the shares to facilitate
future share awards.
Employee engagement
The Directors are committed to maintaining effective
communication with its workforce on matters which affect
their continued employment, job roles, and future prospects
as well as being transparent about the Group’s financial and
business performance, strategy, market challenges, and key
projects, both operational and transformational.
This communication is multi layered in the form of:
communications from the Chief Executive and wider Executive
Committee, delivered either in person, by video conference or
by emails and/or via the website.
The Group is committed to ensuring opportunities for
employment are available to all those in our communities. With
particular reference to those employers with disabilities, we
have signed a commitment to a government initiative called
Disability Confident, whose aim it is to encourage employees
to recruit and retain disabled people, and those with other
health conditions. It is the policy of the Group to employ and
train disabled people whenever their skills and qualifications
allow and suitable vacancies are available. If existing employees
become disabled, every effort is made to find them appropriate
work and training is provided if necessary.
Further details regarding employees are provided in the
strategic report on pages 26 to 41.
Political and charitable contributions
The Group made no political contributions during the
year. Donations to charities amounted to £109,520 (2023:
£85,000). The donations made in the year principally relate to
environmental initiatives and sponsorship of employee driven
fund raising activities on behalf of local and national charities.
85
Vp plc Annual Report 2024
Directors’ report
Supplier payment policy
It is the Company’s policy to make payment to suppliers on
agreed terms. The Company seeks to abide by these payment
terms whenever it is satisfied that the supplier has provided
the goods or services in accordance with the agreed terms
and conditions. The number of days purchases outstanding at
31 March 2024 was 36 days (2023: 37 days). This figure fluctuates
dependent on the creditor position for fleet purchases at the
year-end compared to the average purchases during the year.
Taxation principles
We operate in accordance with our Tax Strategy, which can be
found at: www.vpplc.com/responsible-business.
In 2023/24 the Group paid £9.2 million (2023: £5.5 million) in
corporate taxes. We are a responsible corporate tax payer
and conduct our affairs to ensure compliance with all laws and
relevant regulations in the countries in which we operate.
Contracts
There are no disclosures required under S417 of the
Companies Act in relation to contractual or other
arrangements with customers or suppliers.
Purchase of own shares
A resolution is to be proposed to the Company’s shareholders
at the AGM to authorise the Company to purchase its own
shares up to a maximum of 10% of the Company’s issued share
capital either to be cancelled or retained as treasury shares.
This resolution will be proposed as a special resolution in line
with previous years. The maximum and minimum prices that
may be paid for an ordinary share in exercise of such powers
are set out in paragraphs (b) and (c) of Resolution 12 of the
Notice of Meeting. The Directors undertake to shareholders
that they will only exercise this power after careful
consideration, taking into account the financial resources of
the Company, future funding opportunities and the price of the
Company’s shares. The Directors will not exercise the ability
to purchase the Company’s own shares unless to do so would
result in an increase in earnings per share and would be in the
best interest of shareholders generally.
During the year ended 31 March 2024, the Company did not
acquire any shares under the authority of the resolution passed
at the Annual General Meeting.
Going concern
The Group ended the financial year in a healthy financial
position. The Group continues to generate strong cash flows.
Net debt, excluding lease liabilities reduced by £9.2 million
from £134.4 million at 31 March 2023 to £125.2 million at 31
March 2024. This was after funding an increase in fleet capital
investment of £62.8 million. EBITDA before exceptional items1
and IFRS 16 impact totalled £91.0 million, which was 2% lower
than prior year of £92.9 million. The business review on pages
14 to 21 sets out the Group’s business activities, markets and
outlook for the forthcoming year and beyond.
The Group finances its operations through a combination
of shareholders’ funds, bank borrowings, finance leases and
operating leases.
The capital structure is monitored using the gearing ratio of
adjusted Net Debt/EBITDA. The Group allocates its capital
using a disciplined capital allocation policy that prioritises
organic growth and ordinary dividends.
In November 2023, the Group refinanced its committed
revolving credit facility with a new three year, £90 million
facility, maturing in November 2026. The revolving credit facility
agreement also includes a £30 million uncommitted accordion
facility. Financial covenants associated with the revolving credit
facility remain unchanged from the previous facility.
As at 31 March 2024, the Group had £183.0 million of debt
capacity (2023: £183.0 million) comprising committed revolving
credit facilities of £90.0 million and £93.0 million private
placements, which are subject to covenant testing. At 31 March
2024, £132.0 million of the combined facilities were drawn
down (2023: £146.0 million). In addition to the committed
facilities, the Group net overdraft facility at the year-end was
£7.5 million (2023: £7.5 million). The Board has evaluated the
facilities and covenants on the basis of the budget for 2024/25
(including 2025/26 long-term forecast). All of which has been
prepared taking into account the current economic climate,
together with appropriate sensitivity analysis. Stress scenarios
have also been considered by the Board. Under these scenarios
material revenue reductions have been applied for the financial
year ended 31 March 2025 against the Group’s original budget
and extended to 30 September 2025. All scenarios retain
adequate headroom against borrowing facilities and fall within
the existing covenants.
Our most severe downside modelling, which reflects a 15%
reduction in revenue levels demonstrates headroom over
borrowing facilities and existing covenant levels throughout the
forecast period to the end of September 2025.
On the basis of this testing, the Directors have a reasonable
expectation that the Group and Parent Company has adequate
resources to continue in operation for the foreseeable future.
For this reason, the going concern basis has been adopted in
preparation of the consolidated financial statements. This is
covered further in note 1 Basis of Preparation on page 104.
Corporate governance
The Corporate governance statement on pages 62 to 64 forms
part of the Directors’ report.
Directors’ report continued
1 These measures are explained and reconciled in the Alternative Performance measures section on page 143
86
Vp plc Annual Report 2024
Financial Statements
Corporate Governance
Strategic Report
Statement of Directors’ responsibilities
in respect of the financial statements
The Directors are responsible for preparing the Annual Report
and Accounts and the financial statements in accordance with
applicable law and regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, the
Directors have prepared the Group and the Company financial
statements in accordance with UK-adopted international
accounting standards.
Under company law, Directors must not approve the financial
statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and Company and
of the profit or loss of the Group for that period. In preparing
the financial statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• state whether applicable UK-adopted international
accounting standards have been followed, subject to any
material departures disclosed and explained in the financial
statements;
• make judgements and accounting estimates that are
reasonable and prudent; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and
Company will continue in business.
The Directors are responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’s and Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the
financial statements and the Directors’ remuneration report
comply with the Companies Act 2006.
The Directors are responsible for the maintenance and
integrity of the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
Directors’ confirmations
The Directors consider that the Annual Report and Accounts,
taken as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to assess
the Group’s and Company’s position and performance, business
model and strategy.
Each of the Directors, whose names and functions are listed in
the governance section of the Annual Report confirm that, to
the best of their knowledge:
• the Group and Company financial statements, which have
been prepared in accordance with UK-adopted international
accounting standards, give a true and fair view of the assets,
liabilities and financial position of the Group and Company,
and of the profit of the Group; and
• the business review and financial review includes a fair review
of the development and performance of the business and
the position of the Group and Company, together with
a description of the principal risks and uncertainties that
it faces.
In the case of each Director in office at the date the Directors’
report is approved:
• so far as the Director is aware, there is no relevant audit
information of which the Group’s and Company’s Auditors
are unaware; and
• they have taken all the steps that they ought to have taken
as a Director in order to make themselves aware of any
relevant audit information and to establish that the Group’s
and Company’s Auditors are aware of that information.
Independent Auditors
In accordance with section 489 of the Companies Act 2006, a
resolution for the re-appointment of PricewaterhouseCoopers
LLP as Auditors of the Company is to be proposed at the
forthcoming Annual General Meeting.
By order of the Board
Jeremy Pilkington
Chair
4 June 2024
87
Vp plc Annual Report 2024
Report on the audit of the financial statements
Opinion
In our opinion, Vp plc’s group financial statements and company
financial statements (the “financial statements”):
• give a true and fair view of the state of the group’s and of
the company’s affairs as at 31 March 2024 and of the group’s
loss and the group’s and company’s cash flows for the year
then ended;
• have been properly prepared in accordance with UK-adopted
international accounting standards as applied in accordance
with the provisions of the Companies Act 2006; and
• have been prepared in accordance with the requirements of
the Companies Act 2006.
We have audited the financial statements, included within
the Annual Report and Accounts (the “Annual Report”),
which comprise: the Consolidated and Parent Company
Balance Sheets as at 31 March 2024; the Consolidated Income
Statement, the Consolidated Statement of Comprehensive
Income, the Consolidated and Parent Company Statements
of Changes in Equity and the Consolidated and Parent
Company Statements of Cash Flows for the year then
ended; and the notes to the financial statements, comprising
material accounting policy information and other explanatory
information.
Our opinion is consistent with our reporting to the Audit
Committee.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described
in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the group in accordance with
the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical
Standard, as applicable to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements.
To the best of our knowledge and belief, we declare that non-
audit services prohibited by the FRC’s Ethical Standard were
not provided.
Other than those disclosed in note 3 to the financial
statements, we have provided no non-audit services to
the company or its controlled undertakings in the period
under audit.
Our audit approach
Overview
Audit scope
• The group is organised into 12 reporting units. The
group financial statements are a consolidation of these
reporting units.
• Of the 12 reporting units, we identified three which, in
our view, required an audit of their complete financial
information.
• Audit procedures were also performed over certain financial
statement line items within two further reporting units.
• Reporting units over which we performed full scope audit
procedures accounted for 77% of the group’s reported
revenues and 70% of the group’s profit before tax,
amortisation, impairment of intangible assets and exceptional
items. These coverages are based on absolute values.
Key audit matters
• Existence of fleeted rental equipment (group and parent)
• Short term cash flows used in determining the valuation
of goodwill and other intangible assets in relation to the
Brandon Hire Station CGU (group)
Materiality
• Overall group materiality: £1,993,000 (2023: £2,000,000)
based on 5% of profit before tax, amortisation and
impairment of goodwill, trade names and customer
relationships and exceptional items.
• Overall company materiality: £3,274,000 (2023: £3,000,000)
based on 1% of total assets.
• Performance materiality: £1,494,000 (2023: £1,500,000)
(group) and £2,455,000 (2023: £2,250,000) (company).
The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements.
Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the audit
of the financial statements of the current period and include
the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors,
including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters,
and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
This is not a complete list of all risks identified by our audit.
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Vp plc Annual Report 2024
Independent Auditors’ report
to the members of Vp plc
Financial Statements
Corporate Governance
Strategic Report
Short term cash flows used in determining the valuation of goodwill and other intangible assets in relation to the Brandon
Hire Station CGU is a new key audit matter this year. Material uncertainty related to going concern and the valuation of rental
equipment (group and parent), which were key audit matters last year, are no longer included because of, respectively, the renewal
of the group’s revolving credit facility in November 2023 and limited audit findings in relation to the recoverable amount of rental
equipment in recent years. Otherwise, the key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Existence of fleeted rental equipment (group and
parent)
Refer to page 68 (Significant accounting issues), page
104 (Material accounting policies) and note 9 in the
financial statements.
We focused on this area because the group and parent
company hold a significant quantum and carrying
amount of rental equipment in the normal course of
business. The net book value of rental equipment was
£226.0 million and £103.3 million as at 31 March 2024
(2023: £220.6 million and £100.9 million) for the group
and parent company respectively. Given the volume
of assets and the frequency of movement (through
purchases, hires and sales) there is the potential for
assets to go missing. This results in complexity in
maintaining an accurate fixed asset register.
We consider the significant risk to be focused on the
fleeted rental equipment (typically higher value and
itemised assets with a unique serial identifier) given
the individual value of these items and proportion that
these make up of the overall rental equipment balance.
Our audit work in respect of the existence of fleeted rental equipment
included understanding and evaluating management’s key controls in this
area, confirming the correct recording of fleeted assets movements on
the fixed asset register on a sample basis and substantively testing the
existence of a sample of assets.
For a sample of fleeted asset purchases in the year we agreed to invoice
and capitalisation onto the fixed asset register, confirming the value
and the appropriateness of capitalisation. We agreed the existence of
a sample of fleeted assets out on hire at the year end to rental invoice
and, for settled invoices, cash receipt. We attended a sample of year end
fleeted asset counts and:
• Considered the design and implementation of count controls by
understanding and observing the count procedures;
• Counted a sample of assets and reconciled these to both
management’s count and the fixed asset register; and
• Tested the movements of these assets between the inspection and
year end date in order to confirm their existence at 31 March 2024.
We found, based on the results of our testing, that the amounts
recorded, and disclosures made in the financial statements were
consistent with the supporting evidence obtained.
Short term cash flows used in determining the
valuation of goodwill and other intangible assets
in relation to the Brandon Hire Station CGU
(group)
Refer to page 68 (Significant accounting issues), page
105 (Material accounting policies) and note 10 in the
financial statements.
Vp holds a significant amount of goodwill and other
intangible assets on the balance sheet, £33.9 million
of which was allocated to the Brandon Hire Station
(‘Brandon’) cash generating unit (‘CGU’) prior to
impairment.
Management is required to perform an annual
impairment assessment over CGUs to which goodwill
is allocated in line with IAS 36, using a value in use
(‘ViU’) model based on discounted future cash
flows or a calculation of fair value less costs to sell
(‘FVLCTS’). The recoverable amount of the CGU is
the higher of the two valuations.
After assessing the results of the Brandon CGU
for the year ended 31 March 2024 and the group’s
outlook for the division we considered the risk of
impairment of goodwill attached to the CGU to be a
significant risk, specifically in relation to short term
cash flow projections given the estimation uncertainty
in determining the timing and pace of growth.
We obtained management’s impairment model for the Brandon CGU.
Procedures performed included:
• tested the mathematical accuracy of the impairment model and agreed
the carrying value of the CGU being assessed for impairment to the
year-end balance sheet of Brandon included in the consolidation;
• evaluated the historical accuracy of the budgeting process to assess
management’s ability to forecast accurately;
• compared cash flows in the forecast period to:
i. recent actual performance; and
ii. external market commentary on expected growth in the UK
construction sector
to assess the achievability of those forecasts;
• traced the forecast financial information within the model to the
latest Board approved budgets;
• assessed management’s fair value less costs to sell (‘FVLCTS’)
valuation cross-check, which they prepared in accordance with IAS 36
so as to conclude on the appropriate recoverable amount;
• performed sensitivity analysis over the short term cash flows to
understand the impact on the impairment charge of reasonable
changes in growth assumptions; and
• assessed the disclosures in the Annual Report relating to goodwill and
impairment for compliance with the accounting framework.
We found, based on the results of our testing, that the impairment
recognised in relation to the goodwill and other intangible assets
allocated to the Brandon CGU to be appropriate.
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Vp plc Annual Report 2024
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the group and the company, the accounting processes and controls, and
the industry in which they operate.
The group’s accounting process is structured around a group finance function at its head office in Harrogate which is responsible for
the group’s reporting units. The group is organised into 12 reporting units and the group financial statements are a consolidation of
these reporting units. Of the 12 reporting units, we identified three which, in our view, required an audit of their complete financial
information. The reporting units over which we performed full scope audit procedures accounted for 77% of the group’s revenues
and 70% of the group’s profit before tax, amortisation, impairment of intangible assets and exceptional items (calculated on an
absolute value basis).
All of the audit procedures have been performed by the group engagement team. In addition, the group audit team performed
analytical review procedures over a number of smaller reporting units. This included an analysis of year on year movements, at a
level of disaggregation to enable a focus on higher risk balances and unusual movements. This gave us the evidence we needed for
our opinion on the financial statements as a whole.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk on the
group’s and parent company’s financial statements, and we remained alert when performing our audit procedures for any indicators
of the impact of climate risk. In particular we considered the nature and useful economic lives of the group’s and parent company’s
rental equipment and the potential impact on the group of maintaining / replacing these assets in line with climate targets. Our
procedures did not identify any material impact as a result of climate risk on the group’s and parent company’s financial statements.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of
our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements,
both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements - group
Financial statements - company
Overall materiality
£1,993,000 (2023: £2,000,000).
£3,274,000 (2023: £3,000,000).
How we
determined it
5% of profit before tax, amortisation and
impairment of goodwill, trade names and customer
relationships and exceptional items.
1% of total assets
Rationale for
benchmark applied
We have chosen this as our benchmark as it is
a key performance measure disclosed to users
of the financial statements. This figure takes
prominence in the Annual Report, as well as the
communications to both the shareholders and
the market. The benchmark is consistent with the
prior year.
We have used an asset based measure for the
parent company, which is a generally accepted
auditing benchmark. Where applicable, we have
performed our testing to a lower, group allocated,
materiality for individual balances that contribute
to the consolidated group results.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The
range of materiality allocated across components was between £50,000 and £1,750,000. Certain components were audited to a
local statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of
our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality was 75% (2023: 75%) of overall materiality, amounting to £1,494,000 (2023:
£1,500,000) for the group financial statements and £2,455,000 (2023: £2,250,000) for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was
appropriate.
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Vp plc Annual Report 2024
Independent Auditors’ report
to the members of Vp plc continued
Financial Statements
Corporate Governance
Strategic Report
We agreed with the Audit Committee that we would report to
them misstatements identified during our audit above £100,000
(group audit) (2023: £100,000) and £163,000 (company audit)
(2023: £150,000) as well as misstatements below those
amounts that, in our view, warranted reporting for qualitative
reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and
the company’s ability to continue to adopt the going concern
basis of accounting included:
• Obtaining management’s latest forecasts that support
the Board’s assessment and conclusions with respect to
the going concern basis of preparation of the financial
statements;
• Checking the mathematical accuracy of management’s
forecasts;
• Considering the out-turn of previous forecasts to assess
management’s forecasting accuracy;
• Corroborating management’s base case forecast to
appropriate supporting documentation including board
approved budgets and divisional budgets; and
• Evaluating management’s base case forecast and downside
scenarios, challenging the underlying data and adequacy and
appropriateness of the assumptions used in making their
assessment. We also evaluated the directors’ plans for future
actions in relation to their going concern assessment, should
these be required.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on
the group’s and the company’s ability to continue as a going
concern for a period of at least twelve months from when the
financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be
predicted, this conclusion is not a guarantee as to the group’s
and the company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have
applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the
directors’ statement in the financial statements about whether
the directors considered it appropriate to adopt the going
concern basis of accounting.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the
Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for
the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we
do not express an audit opinion or, except to the extent
otherwise explicitly stated in this report, any form of assurance
thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially
misstated. If we identify an apparent material inconsistency or
material misstatement, we are required to perform procedures
to conclude whether there is a material misstatement of the
financial statements or a material misstatement of the other
information. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact. We have
nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ report, we
also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit,
the Companies Act 2006 requires us also to report certain
opinions and matters as described below
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course
of the audit, the information given in the Strategic report
and Directors’ report for the year ended 31 March 2024 is
consistent with the financial statements and has been prepared
in accordance with applicable legal requirements.
In light of the knowledge and understanding of the group and
company and their environment obtained in the course of the
audit, we did not identify any material misstatements in the
Strategic report and Directors’ report.
Directors’ Remuneration
In our opinion, the part of the Remuneration report to be
audited has been properly prepared in accordance with the
Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’
statements in relation to going concern, longer-term viability
and that part of the corporate governance statement relating
to the company’s compliance with the provisions of the UK
Corporate Governance Code specified for our review. Our
additional responsibilities with respect to the corporate
governance statement as other information are described in
the Reporting on other information section of this report.
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Vp plc Annual Report 2024
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial
statements and our knowledge obtained during the audit,
and we have nothing material to add or draw attention to in
relation to:
• The directors’ confirmation that they have carried out a
robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those
principal risks, what procedures are in place to identify
emerging risks and an explanation of how these are being
managed or mitigated;
• The directors’ statement in the financial statements about
whether they considered it appropriate to adopt the going
concern basis of accounting in preparing them, and their
identification of any material uncertainties to the group’s and
company’s ability to continue to do so over a period of at
least twelve months from the date of approval of the financial
statements;
• The directors’ explanation as to their assessment of the
group’s and company’s prospects, the period this assessment
covers and why the period is appropriate; and
• The directors’ statement as to whether they have a
reasonable expectation that the company will be able to
continue in operation and meet its liabilities as they fall due
over the period of its assessment, including any related
disclosures drawing attention to any necessary qualifications
or assumptions.
Our review of the directors’ statement regarding the longer-
term viability of the group and company was substantially less
in scope than an audit and only consisted of making inquiries
and considering the directors’ process supporting their
statement; checking that the statement is in alignment with the
relevant provisions of the UK Corporate Governance Code;
and considering whether the statement is consistent with the
financial statements and our knowledge and understanding of
the group and company and their environment obtained in the
course of the audit.
In addition, based on the work undertaken as part of our audit,
we have concluded that each of the following elements of the
corporate governance statement is materially consistent with
the financial statements and our knowledge obtained during
the audit:
• The directors’ statement that they consider the
Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for
the members to assess the group’s and company’s position,
performance, business model and strategy;
• The section of the Annual Report that describes the review
of effectiveness of risk management and internal control
systems; and
• The section of the Annual Report describing the work of the
Audit Committee.
We have nothing to report in respect of our responsibility to
report when the directors’ statement relating to the company’s
compliance with the Code does not properly disclose a
departure from a relevant provision of the Code specified
under the Listing Rules for review by the auditors.
Responsibilities for the financial
statements and the audit
Responsibilities of the directors for the
financial statements
As explained more fully in the Statement of directors’
responsibilities in respect of the financial statements, the
directors are responsible for the preparation of the financial
statements in accordance with the applicable framework
and for being satisfied that they give a true and fair view. The
directors are also responsible for such internal control as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group’s and the company’s ability
to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern
basis of accounting unless the directors either intend to
liquidate the group or the company or to cease operations, or
have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we
identified that the principal risks of non-compliance with
laws and regulations related to the Listing Rules and health
and safety legislation, and we considered the extent to which
non-compliance might have a material effect on the financial
statements. We also considered those laws and regulations
that have a direct impact on the financial statements such as
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Vp plc Annual Report 2024
Independent Auditors’ report
to the members of Vp plc continued
Financial Statements
Corporate Governance
Strategic Report
UK tax legislation and the Companies Act 2006. We evaluated
management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of
override of controls), and determined that the principal risks
were related to management bias in key accounting estimates
and posting of inappropriate journal entries to improve the
group’s result for the period. Audit procedures performed by
the engagement team included:
• Discussions with management, including consideration of
known or suspected instances of non-compliance with laws
and regulation and fraud;
• Challenging assumptions and judgements made by
management in their significant accounting estimates;
• Identifying and testing journal entries, in particular any
journal entries posted with unusual account combinations.
Specifically we tested journal entries which increased the
group result for the period with unusual offset entries, and
we tested a risk based sample of journal entries impacting
revenue with unusual offset entries to detect any potentially
fraudulent revenue being recognised;
• Review of correspondence with regulators; and
• Review of the financial statement disclosures and agreeing to
underlying supporting documentation.
There are inherent limitations in the audit procedures
described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that
are not closely related to events and transactions reflected
in the financial statements. Also, the risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations
of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting
a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular
items for testing based on their size or risk characteristics. In
other cases, we will use audit sampling to enable us to draw
a conclusion about the population from which the sample is
selected.
A further description of our responsibilities for the audit of the
financial statements is located on the FRC’s website at: www.
frc.org.uk/auditorsresponsibilities. This description forms part
of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and
only for the company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no
other purpose. We do not, in giving these opinions, accept or
assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it
may come save where expressly agreed by our prior consent in
writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to
you if, in our opinion:
• we have not obtained all the information and explanations
we require for our audit; or
• adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been
received from branches not visited by us; or
• certain disclosures of directors’ remuneration specified by
law are not made; or
• the company financial statements and the part of the Annual
report on remuneration to be audited are not in agreement
with the accounting records and returns.
We have no exceptions to report arising from this
responsibility.
Appointment
Following the recommendation of the Audit Committee, we
were appointed by the members on 15 October 2014 to audit
the financial statements for the year ended 31 March 2015 and
subsequent financial periods. The period of total uninterrupted
engagement is 10 years, covering the years ended 31 March
2015 to 31 March 2024.
Other matter
In due course, as required by the Financial Conduct Authority
Disclosure Guidance and Transparency Rule 4.1.14R, these
financial statements will form part of the ESEF-prepared annual
financial report filed on the National Storage Mechanism of
the Financial Conduct Authority in accordance with the ESEF
Regulatory Technical Standard (‘ESEF RTS’). This auditors’
report provides no assurance over whether the annual financial
report will be prepared using the single electronic format
specified in the ESEF RTS.
Tom Yeates (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Leeds
4 June 2024
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Vp plc Annual Report 2024
Contents
Consolidated income statement
96
Consolidated statement of comprehensive income
97
Consolidated statement of changes in equity
98
Consolidated balance sheet
99
Consolidated statement of cash flows
100
Parent Company statement of changes in equity
101
Parent Company balance sheet
102
Parent Company cash flows
103
Five year summary
142
FINANCIAL
STATEMENTS
94
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Corporate Governance
Strategic Report
Financial Statements
Corporate Governance
Strategic Report
Financial Statements
95
Vp plc Annual Report 2024
Consolidated Income Statement
for the year ended 31 March 2024
2024
2023
Note
£000
£000
Revenue
2
368,691
371,519
Cost of sales
(275,703)
(284,176)
Gross profit
92,988
87,343
Administrative expenses
(48,644)
(44,763)
Impairment losses on trade receivables
(3,743)
(3,305)
Impairment of intangible assets
10
(28,120)
–
Operating profit before amortisation and impairment of goodwill, trade
names and customer relationships and exceptional items
2
49,496
48,775
Amortisation and impairment of goodwill, trade names and customer relationships
10
(31,198)
(4,490)
Exceptional items
4
(5,817)
(5,010)
Operating profit
3
12,481
39,275
Net financial expense
7
(9,635)
(8,569)
Profit before tax, amortisation and impairment of goodwill, trade
names and customer relationships and exceptional items
39,861
40,206
Amortisation and impairment of goodwill, trade names and customer relationships
10
(31,198)
(4,490)
Exceptional items
4
(5,817)
(5,010)
Profit before tax
2,846
30,706
Income tax expense
8
(8,137)
(7,696)
(Loss)/profit after tax
(5,291)
23,010
Basic (loss)/earnings per share
23
(13.41)p
58.05p
Diluted (loss)/earnings per share
23
(13.41)p
57.76p
Dividend per share interim paid
22
11.5p
11.0p
Dividend per share final paid
22
26.5p
25.5p
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Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2024
2024
2023
Note
£000
£000
(Loss)/profit for the year
(5,291)
23,010
Other comprehensive (expense)/income:
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit pension schemes
26
(391)
(319)
Tax on items taken to other comprehensive income
8
248
5
Impact of tax rate change
8
–
58
Items that may be subsequently reclassified to profit or loss
Foreign exchange translation differences
(1,522)
502
Total other comprehensive (expense)/income
(1,665)
246
Total comprehensive (expense)/income for the year
(6,956)
23,256
97
Vp plc Annual Report 2024
Strategic Report
Consolidated Statement of Changes in Equity
for the year ended 31 March 2024
Share
capital
Capital
redemption
reserve
Share
premium
Foreign
currency
translation
Retained
earnings
Total
equity
Note
£000
£000
£000
£000
£000
£000
At 1 April 2022
2,008
301
16,192
(1,020)
149,104
166,585
Profit for the year
–
–
–
–
23,010
23,010
Other comprehensive income/(expense)
–
–
–
502
(256)
246
Tax movements to equity
8
–
–
–
–
62
62
Impact of tax rate change
8
–
–
–
–
16
16
Share based payments expense in the year
–
–
–
–
580
580
Net movement relating to shares held by Vp
Employee Trust
–
–
–
–
(1,096)
(1,096)
Transactions with owners
Dividends to shareholders
22
–
–
–
–
(14,471)
(14,471)
Total changes in equity during the year
–
–
–
502
7,845
8,347
At 31 March 2023 and 1 April
2023
2,008
301
16,192
(518)
156,949
174,932
Loss for the year
–
–
–
–
(5,291)
(5,291)
Other comprehensive expense
–
–
–
(1,522)
(143)
(1,665)
Tax movements to equity
8
–
–
–
–
(20)
(20)
Share based payments expense in the year
–
–
–
–
767
767
Net movement relating to shares held by Vp
Employee Trust
–
–
–
–
(706)
(706)
Transactions with owners
Dividends to shareholders
22
–
–
–
–
(14,997)
(14,997)
Total changes in equity during the year
–
–
–
(1,522)
(20,390)
(21,912)
As at 31 March 2024
2,008
301
16,192
(2,040)
136,559
153,020
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Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Consolidated Balance Sheet
as at 31 March 2024
2024
2023
NET ASSETS
Note
£000
£000
Non-current assets
Property, plant and equipment
9
256,944
252,385
Intangible assets
10
28,572
57,748
Right-of-use assets
11
58,645
54,637
Employee benefits
26
1,853
2,300
Total non-current assets
346,014
367,070
Current assets
Inventories
13
9,548
8,915
Trade and other receivables
14
74,753
81,513
Income tax receivable
3,582
736
Cash and cash equivalents
15
6,061
11,140
Total current assets
93,944
102,304
Total assets
439,958
469,374
Current liabilities
Lease liabilities
11
(16,319)
(14,622)
Overseas income tax payable
(1,501)
-
Trade and other payables
18
(71,720)
(72,184)
Total current liabilities
(89,540)
(86,806)
Non-current liabilities
Interest-bearing loans and borrowings
16
(131,280)
(145,508)
Lease liabilities
11
(45,642)
(43,896)
Other payables
18
(667)
-
Provisions
19
(3,160)
(1,612)
Deferred tax liabilities
20
(16,649)
(16,620)
Total non-current liabilities
(197,398)
(207,636)
Total liabilities
(286,938)
(294,442)
Net assets
153,020
174,932
EQUITY
Issued share capital
21
2,008
2,008
Capital redemption reserve
301
301
Share premium
16,192
16,192
Foreign currency translation reserve
(2,040)
(518)
Retained earnings
136,559
156,949
Total equity
153,020
174,932
The financial statements on pages 96 to 141 were approved and authorised for issue by the Board of Directors on 4 June 2024 and
were signed on its behalf by:
Jeremy Pilkington
Chair
Keith Winstanley
Director
Company number: 481833
99
Vp plc Annual Report 2024
Strategic Report
Consolidated Statement of Cash Flows
for the year ended 31 March 2024
2024
2023
Note
£000
£000
Cash flows from operating activities
Profit before taxation
2,846
30,706
Adjustments for:
Share based payment charges expense
767
580
Depreciation of property, plant and equipment
9
44,138
46,853
Depreciation of right-of-use assets
11
16,488
16,305
Amortisation and impairment of intangible assets
10
32,054
4,490
Release of arrangement fees
427
287
Financial expense
9,693
8,601
Financial income
(58)
(32)
Profit on sale of property, plant and equipment
(7,456)
(9,174)
Operating cash flow before changes in working capital and provisions
98,899
98,616
Increase in inventories
(633)
(959)
Decrease/(increase) in trade and other receivables
6,760
(5,452)
Increase/(decrease) in trade and other payables
2,082
(12,079)
Increase in provisions
1,548
100
Cash generated from operations
108,656
80,226
Interest paid
(6,521)
(5,413)
Interest element of lease liability payments
(3,315)
(3,038)
Interest received
58
32
Income taxes paid
(9,233)
(5,496)
Net cash generated from operating activities
89,645
66,311
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
25,273
24,855
Purchase of property, plant and equipment
(71,375)
(63,312)
Purchase of intangible assets
(963)
–
Net cash used in investing activities
(47,065)
(38,457)
Cash flows from financing activities
Purchase of own shares by Employee Trust
(706)
(1,096)
Repayment of borrowings
(76,000)
(29,000)
Drawdown of borrowings
62,000
30,000
Arrangement fees
(655)
–
Capital element of lease liability payments
(17,275)
(15,921)
Dividends paid
22
(14,997)
(14,471)
Net cash used in financing activities
(47,633)
(30,488)
Net decrease in cash and cash equivalents
(5,053)
(2,634)
Effect of exchange rate fluctuations on cash held
(26)
157
Cash and cash equivalents net of overdrafts as at the beginning of the year
11,140
13,617
Cash and cash equivalents net of overdrafts as at the end of the year
15
6,061
11,140
100
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Parent Company Statement of Changes in Equity
as at 31 March 2024
Share
capital
Capital
redemption
reserve
Share
premium
Hive up
reserve
Retained
earnings
Total
equity
Note
£000
£000
£000
£000
£000
£000
At 1 April 2022
2,008
301
16,192
8,156
20,141
46,798
Profit for the year
–
–
–
–
18,294
18,294
Other comprehensive income
–
–
–
–
(606)
(606)
Tax movements to equity
–
–
–
–
62
62
Impact of tax rate change
–
–
–
–
16
16
Share based payments expense in the year
–
–
–
–
580
580
Net movement relating to
shares held by Vp Employee Trust
–
–
–
–
(1,096)
(1,096)
Dividends to shareholders
22
–
–
–
–
(14,471)
(14,471)
Total changes in equity during the year
–
–
–
–
2,779
2,779
At 31 March 2023
and 1 April 2023
2,008
301
16,192
8,156
22,920
49,577
Profit for the year
–
–
–
–
25,313
25,313
Other comprehensive income
–
–
–
–
(197)
(197)
Tax movements to equity
–
–
–
–
(20)
(20)
Share based payments expense in the year
–
–
–
–
767
767
Net movement relating to
shares held by Vp Employee Trust
–
–
–
–
(706)
(706)
Dividends to shareholders
22
–
–
–
–
(14,997)
(14,997)
Total changes in equity during the year
–
–
–
–
10,160
10,160
At 31 March 2024
2,008
301
16,192
8,156
33,080
59,737
The hive up reserve relates to the post acquisition retained reserves of TPA Portable Roadways Limited and has been recognised in
the reserves of Vp plc as a result of the transfer of the business and assets of TPA Portable Roadways to Vp plc on 1 April 2017.
101
Vp plc Annual Report 2024
Strategic Report
Parent Company Balance Sheet
for the year ended 31 March 2024
2024
2023
NET ASSETS
Note
£000
£000
Non-current assets
Property, plant and equipment
9
119,411
118,308
Intangible assets
10
9,145
7,674
Investments in subsidiaries
12
64,405
68,775
Right-of-use assets
11
14,966
11,407
Employee benefits
26
1,819
2,135
Trade and other receivables
14
84,699
61,716
Total non-current assets
294,445
270,015
Current assets
Inventories
13
2,792
2,272
Trade and other receivables
14
27,083
28,363
Income tax receivable
3,079
468
Cash and cash equivalents
15
–
1,832
Total current assets
32,954
32,935
Total assets
327,399
302,950
Current liabilities
Lease liabilities
11
(4,245)
(3,579)
Trade and other payables
18
(70,915)
(64,581)
Bank overdraft
15
(14,240)
–
Total current liabilities
(89,400)
(68,160)
Non-current liabilities
Interest-bearing loans and borrowings
16
(131,280)
(145,508)
Deferred tax liabilities
20
(15,133)
(14,439)
Provisions
19
(266)
(54)
Lease liabilities
11
(11,126)
(8,237)
Trade and other payables
18
(20,457)
(16,975)
Total non-current liabilities
(178,262)
(185,213)
Total liabilities
(267,662)
(253,373)
Net assets
59,737
49,577
EQUITY
Capital and reserves
Issued share capital
21
2,008
2,008
Capital redemption reserve
301
301
Share premium
16,192
16,192
Hive up reserve
8,156
8,156
Retained earnings
At the beginning of the year
22,920
20,141
Profit for the financial year
25,313
18,294
Other changes in retained earnings
(15,153)
(15,515)
At the end of the year
33,080
22,920
Total equity
59,737
49,577
The financial statements on pages 96 to 141 were approved and authorised for issue by the Board of Directors on 4 June 2024
and were signed on its behalf by:
Jeremy Pilkington
Chair
Keith Winstanley
Director
Company number: 481833
102
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Parent Company Statement of Cash Flows
for the year ended 31 March 2024
2024
Restated*
2023
Note
£000
£000
Cash flows from operating activities
Profit before taxation
28,926
21,906
Adjustments for:
Share-based payment charges
767
580
Depreciation of property, plant and equipment
9
13,685
14,093
Depreciation of right-of-use assets
11
4,657
4,863
Amortisation and impairment of intangible assets
10
714
1,514
Release of arrangement fees
427
287
Financial expense
5,816
4,615
Financial income
(14)
(10)
Movement in investment due to dormant company strike off
12
4,370
-
Profit on sale of property, plant and equipment
(2,432)
(2,416)
Operating cash flow before changes in working capital and provisions
56,916
45,432
(Increase) in inventories
(520)
(379)
Decrease in trade and other receivables
2,053
3,551
Decrease/(increase) in current intercompany receivables
238
(918)
Increase/(decrease) in trade and other payables
83
(4,492)
Increase/(decrease) in current intercompany payables
6,223
(669)
Increase in provisions
212
54
Cash generated from operations
65,205
42,579
Interest paid
(6,521)
(5,413)
Interest element of lease liability payments
(816)
(712)
Interest received
14
10
Income taxes paid
(4,403)
(1,684)
Net cash generated from operating activities
53,479
34,780
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
13,898
8,956
Purchase of property, plant and equipment
(28,262)
(23,733)
Purchase of intangible software
(668)
–
Increase in loans to subsidiary undertakings
(25,261)
(20,440)
Decrease in loans to subsidiary undertakings
2,279
14,422
Net cash from investing activities
(38,014)
(20,795)
Cash flow from financing activities
Repurchase of own shares
(706)
(1,096)
Repayment of borrowings
(76,000)
(29,000)
Drawdown of borrowings
62,000
30,000
Drawdown of loans from subsidiary undertakings
3,690
5,282
Repayment of loans from subsidiary undertakings
(208)
(555)
Arrangement fees
(655)
–
Payment of finance lease liability
(4,660)
(4,851)
Dividends paid
22
(14,997)
(14,471)
Net cash from financing activities
(31,536)
(14,691)
Net decrease in cash and cash equivalents
(16,071)
(706)
Cash and cash equivalents net of overdrafts as at the beginning of the year
1,831
2,537
Cash and cash equivalents net of overdraft as at the end of the year
15
(14,240)
1,831
* The comparative figures have been restated to reclassify movements in intercompany balances. See note 1 for further details.
103
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements)
1. Material accounting policies
Basis of preparation
Vp plc is a public limited company (limited by shares), which is listed on the London Stock Exchange and incorporated and domiciled
in the United Kingdom. These consolidated Financial Statements of Vp plc, for the year-ended 31 March 2024, consolidate those
of the Company and its subsidiaries (together referred to as the “Group”). The Parent Company’s Financial Statements present
information about the Company as a separate entity and not about the Group.
Statement of compliance
The consolidated financial statements of the Group and the Parent Company financial statements have been prepared in accordance
with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to
companies reporting under those standards.
The Financial Statements are presented in sterling, rounded to the nearest thousand. They are prepared on a going concern basis
(further details are provided in the Directors’ report) and historic cost basis, except that of defined benefit pension plans and cash-
settled share options are stated at fair value.
Going concern
The going concern basis has been adopted in preparation of the consolidated financial statements. The Board has evaluated funding,
facilities and covenants on the basis of the budget for 2024/25 (including 2025/26 long-term forecast) and has performed sensitivity
analysis on them.
The Group and Parent Company forecast positive cash inflows through a pipeline of existing and new hire agreements and other
services; the Group and Parent Company also have sufficient finance facilities available. The assessment included an analysis of the
Group’s and Parent Company’s current financial position, ability to trade, principal risks facing the Group, and the effectiveness of
its strategies to mitigate the impact of liquidity risks. On the basis of these procedures, the Board has a reasonable expectation that
the Group and Parent Company has adequate resources to continue in operational existence for at least the next 12 months from
the date of approval of these financial statements. The financial statements do not include the adjustments that would result if the
Group and Parent Company were unable to continue as a going concern.
Material accounting policies
The Group’s and Company’s material accounting policies are set out below and have been applied consistently to all periods
presented in these consolidated Financial Statements. There were no changes to IFRSs or IFRIC interpretations that have had a
material impact on the Group for the year-ended 31 March 2024.
Future standards
Certain new accounting standards and interpretations have been published that are not mandatory for 31 March 2024 reporting
period and have not been early adopted by the Group. These standards are not expected to have a material impact on the entity in
the current or future reporting periods and on foreseeable future transactions. These standards are as follows:
• Amendments to IAS 1 - Non-current liabilities with covenants
• Amendments to IFRS 16 - Leases on sale and leaseback
• Amendment to IAS 7 and IFRS 7 - Supplier finance
• Amendments to IAS 21 - Lack of exchangeability
Basis of consolidation
Subsidiaries are those entities controlled by the Company. Control exists when the Company has the power, directly or indirectly,
to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential
voting rights, which presently are exercisable or convertible, are taken into account. The Financial Statements of subsidiaries are
included in the consolidated Financial Statements from the date that control commences until the date that control ceases.
Property, plant and equipment
Property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and impairment losses. Cost
includes expenditure that is directly attributable to the acquisition of the items.
104
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Certain items of property, plant and equipment that had been revalued to fair value on, or prior to, 1 April 2004, the date of
transition to adopted IFRSs, are measured on the basis of deemed cost, being the revalued amount at the date of that revaluation,
as permitted by the exemption in IFRS 1.
Assets acquired via acquisitions are recorded in the accounting records at fair value.
Depreciation is provided by the Group to write off the cost or deemed cost less estimated residual value (where appropriate) of
tangible fixed assets using the following annual rates:
Land and Buildings – Freehold buildings
– 2% straight line
Land and Buildings – Leasehold improvements
– Term of lease
Rental equipment
– 7%–33% straight line depending on asset type
Motor vehicles
– 20%–33% straight line
Other – Computers
– 10%–33% straight line
Other – Fixtures, fittings and other equipment – 10%–20% straight line
Estimates of residual values are reviewed at least annually, and adjustments made as appropriate. Any profit generated on disposal is
credited to cost of sales. No depreciation is provided on freehold land.
Business combinations and goodwill
For acquisitions on or after 1 April 2010, the Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests in the acquiree; plus
• the fair value of the existing equity interest in the acquiree; less
• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
Costs related to the acquisition are expensed to the income statement as incurred.
In respect of acquisitions between 1 April 2004 and 1 April 2010, goodwill represents the difference between the cost of the
acquisitions and the fair value of identifiable net assets and contingent liabilities acquired. Costs related to the acquisition were
capitalised as part of the cost of the acquisition.
Goodwill is stated at cost less any accumulated impairment losses and is included on the balance sheet as an intangible asset. It is
allocated to cash-generating units and is not amortised, but is tested annually for impairment.
The Group has chosen not to restate business combinations prior to 1 April 2004 on an IFRS basis as permitted by IFRS 1.
Goodwill is included on the basis of deemed cost for the transactions, which represent its carrying value at the date of transition to
adopted IFRSs.
Other intangible assets
Intangible assets other than goodwill that are acquired by the Group are stated at cost less accumulated amortisation and
impairment losses. Amortisation is included within cost of sales within the Income Statement. The rate of amortisation attempts to
write off the cost of the intangible asset over its estimated useful life using the following rates:
Customer relationships – up to 10 years
Supply agreements
– the initial term of the agreement
Trade names
– over the estimated initial period of usage, normally 10 years
Impairment
The carrying amounts of non-financial assets are reviewed at each balance sheet date to determine whether there is any indication
of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognised
whenever the carrying amount of an asset or its cash-generating unit (CGU) exceeds its recoverable amount. Impairment losses
are recognised through the Income Statement. For goodwill and intangible assets that have an indefinite useful life, the recoverable
amount is tested at each balance sheet date. The recoverable amount of a CGU is determined either by reference to discounted
forecast cash flows from the CGU or an estimate of its fair value less costs of disposal, whichever is higher. A CGU is defined as the
smallest identifiable group of assets that generates largely independent cash inflows.
105
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
Investments
In the Company’s financial statements, investments in subsidiary undertakings are stated at cost less impairment.
Dividends received and receivable are credited to the Company’s Income Statement to the extent that the Company has the right
to receive payment.
Inventories
Inventories are stated at the lower of cost and net realisable value. The cost of individual items of inventory are determined on a
first-in, first-out basis. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs
of completion and selling expenses. For slow-moving or obsolete items, where net realisable value is lower than cost, necessary
provision is made.
Raw materials and consumables are held primarily for the repair and maintenance of fleet assets. Goods for resale is inventory held
for sale to customers.
Trade and other receivables
Trade and other receivables are stated at their due amounts less impairment losses. The Group applies the IFRS 9 simplified
approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. Trade
receivables are written off when there is no reasonable expectation of recovery. The loss allowance for trade receivables is based
on assumptions about risk of default and expected loss rates. The Group uses judgement in making these assumptions based on the
Group’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purposes of the
Statement of Cash Flows. The Group has a legal right and an intention to settle these balances net.
Interest-bearing loans and borrowings
Financial assets and liabilities are recognised on the balance sheet when the Group becomes party to the contractual provision of
the instrument. Interest-bearing borrowings are recognised initially at fair value. Subsequent to initial recognition, interest-bearing
borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the Income
Statement over the periods of the borrowings on an effective interest basis. Cash flows for interest paid and interest received on
financial assets held for cash management purposes are presented as operating cash flows in the Statement of Cash Flows.
Taxation
The charge for taxation is based on the results for the year and takes into account full provision for deferred taxation due to
temporary differences.
Deferred tax is provided using the balance sheet liability method to provide for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of
deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities,
using tax rates enacted, or substantively enacted, at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the
asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be
realised. Deferred tax assets and liabilities are not discounted and are offset where amounts will be settled on a net basis as a result
of a legally enforceable right.
Current tax is the expected tax payable on the taxable income for the year, using rates enacted at the balance sheet date, and any
adjustment to tax payable in respect of prior years. A tax provision is recognised where there is a probable requirement to settle,
in the future, an obligation based on a past event.
Trade and other payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost.
Employee benefits – pensions
Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as
incurred.
The Group’s net obligation, in respect of its defined benefit pension plans, is calculated by estimating the amount of future benefit
that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine
1. Material accounting policies continued
106
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
its present value, and the fair value of any plan assets is deducted. The liability discount rate is the yield at the balance sheet date
on AA credit-rated bonds that have maturity dates approximating to the terms of the Group’s obligations. The calculation is
performed by a qualified actuary using the projected unit method.
The Group’s net obligation is recorded as a balance sheet asset or liability and the actuarial gains and losses associated with this
balance sheet item are recognised in the Statement of Comprehensive Income as they arise. Actuarial gains and losses occur
when actuarial assumptions differ from those previously envisaged by the actuary or when asset returns differ from the liability
discount rate.
An asset for the surplus has been recognised on the basis that it is recoverable prior to wind up of the scheme; however, the
balance sheet position is sensitive to small fluctuations in the assumptions made.
When the benefits of the plan are improved, the proportion of the increased benefit relating to past service by employees is
recognised as an expense in the Income Statement at the earlier of the date when a plan amendment or curtailment occurs and the
date when an entity recognises related restructuring costs or termination benefits.
Dividend
Dividends are recognised as a liability in the period in which they are approved; however, interim dividends are recognised on a
paid basis.
Share capital
Ordinary shares are classified as equity.
Employee trust shares
The Group has an employee trust (the Vp Employee Trust) for the warehousing of shares in support of awards granted by the
Company under its various share option schemes. The Group accounts include the assets and related liabilities of the Vp Employee
Trust. In both the Group and Parent Company accounts, the shares in the Group held by the employee trust are treated as treasury
shares, are held at cost, and are presented in the balance sheet as a deduction from retained earnings. The shares are ignored for
the purpose of calculating the Group’s earnings per share.
Treasury shares
When share capital recognised as equity is repurchased and classified as treasury shares, the amount of the consideration paid is
recognised as a deduction from equity. When treasury shares are sold or reissued, subsequently, the amount received is recognised
as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to/from the retained earnings.
Revenue
Revenue represents the amounts (excluding Value Added Tax) derived from the hire of equipment and the provision of goods and
services to third-party customers during the year. Revenue from equipment hire, which is the vast majority of Group revenues, is
accounted for under IFRS 16 ‘Leases’. Revenue is recognised from the start of hire through to the end of the agreed hire period,
predominantly on a time-apportioned basis. Revenue for services and sales of goods are accounted for under IFRS 15 ‘Revenue
from Contracts with Customers’. Revenue from providing services is recognised in the accounting period in which the services
are rendered. The majority of services provided are short term and only an immaterial proportion bridge a financial year-end.
Any increases or decreases in estimated revenues or costs arising from changed circumstances are reflected in profit in the period
in which they become known by management. Revenue from sale of goods primarily relates to consumables and new machine
sales. Revenue is recognised when a Group entity sells a consumable to the customer or when control of the new machine has
transferred ownership to the buyer upon delivery. Depending on the type of sale, a receivable is recognised when the goods are
delivered or due immediately. Amounts due from customers are payable by customers on standard credit terms and there is no
significant financing component or variable consideration within amounts due from customers. As the Group does not, in the
course of its ordinary activities, routinely dispose of equipment held for hire, gains or losses on disposal are included in cost of
sales. Below summarises the disaggregation of revenue from contracts with customers from the total revenue disclosed in the
consolidated income statement:
2024
2023
UK
£000
International
£000
Total
£000
UK
£000
International
£000
Total
£000
Equipment hire
244,811
29,063
273,874
249,126
26,131
275,257
Services
54,660
7,306
61,966
56,967
8,078
65,045
Sales of goods
30,597
2,254
32,851
27,360
3,857
31,217
Total revenue
330,068
38,623
368,691
333,453
38,066
371,519
107
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
Share-based payments
The fair value of share options is charged to the Income Statement based upon their fair value at the date of grant with a
corresponding increase in equity. The charge is recognised evenly over the vesting period of the options. The liabilities for cash-
settled share-based payment arrangements are measured at fair value.
The fair values are calculated using an appropriate option pricing model. The Group’s approved, unapproved and Save As You
Earn (SAYE) schemes have been valued using the Black–Scholes model and the Income Statement charge is adjusted to reflect the
expected number of options that will vest, based on expected levels of performance against non-market-based conditions and
the expected number of employees leaving the Group. The fair values of the Group’s Long-Term Incentive Plan (LTIP) and Share
Matching scheme are calculated using a discounted grant price model, again adjusted for expected performance against non-market-
based conditions and employees leaving the Group.
Any cash-settled options are valued at their fair value as calculated at each period end, taking account of performance criteria and
expected numbers of employees leaving the Group, and the liability is reflected in the balance sheet within accruals.
The Parent Company recharges the subsidiary entities with the fair value of the share options relating to the employees associated
with that entity.
The Group’s results are subject to fluctuations caused by the cash-settled share options and national insurance costs on LTIPs and
share option schemes as these are required to be remeasured at each reporting date based on the Company share price. Changes
in the Company’s share price during the reporting period, therefore, impact the charge to the Income Statement for cash-settled
options and national insurance, including vested but not exercised options, as well as unvested options. A movement of 10 pence in
share price would impact the charge to the Income Statement by £31,000 (2023: £33,000).
Foreign currencies
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the balance sheet date and the
gains or losses on translation are included in the Income Statement. Non-monetary assets and liabilities that are stated at fair value
are translated to sterling at the foreign exchange rates ruling at the date the values were determined.
The assets and liabilities of foreign operations are translated at foreign exchange rates ruling at the balance sheet date. The revenues
and expenses of foreign operations are translated at rates approximating to the foreign exchange rates ruling at the date of the
transactions. Foreign exchange differences arising on retranslation are recognised directly in equity.
Net financial expenses
Net financial expenses comprise interest on obligations under the defined benefit pension schemes, the expected return on scheme
assets under the defined benefit pension schemes, interest payable on borrowings calculated using the effective interest rate
method, interest expenses arising on leases in accordance with IFRS 16 and interest receivable on funds invested.
Leases (as lessee)
The Group holds leases for various properties, equipment and vehicles. Rental contracts are typically made for fixed periods of 1 to
10 years but may have extension options as described below. Lease terms are negotiated on an individual basis and contain a wide
range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the
leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.
Assets and liabilities arising from a lease are, initially, measured on a present value basis. Lease liabilities include the net present
value of fixed payments less any incentives receivable, variable lease payments that are based on a specified index or a rate, the
exercise price of a purchase option if the Group is reasonably certain to exercise that option and payments of penalties for
terminating the lease, if the lease term reflects the Group exercising that option. Lease payments to be made under reasonably
certain extension options are also included in the measurement of the liability. A separate provision for onerous leases is, therefore,
no longer required.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is,
generally, the case for leases in the Group, the lessee’s incremental borrowing rate is used. This incremental borrowing rate is the
interest rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value over a similar term
and with similar security to the right-of-use asset in a similar economic environment. To determine the incremental borrowing rate,
the Group, where possible uses recent third-party financing received as a starting point, adjusted to reflect changes in the financing
conditions since third-party financing was received; adjusts for credit risk as required; and makes adjustments specific to the lease
for example to country, currency and security.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period
so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
1. Material accounting policies continued
108
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Right-of-use assets are, generally, depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s
useful life.
Where a lease has ended and we have moved to an ongoing rental with the supplier, no right-of-use asset or lease liability is
recognised until a new contract is signed. Payments associated with short-term leases and leases of low value assets are recognised
on a straight-line basis as an expense in the Consolidated Income Statement. Short-term leases are certain leases with a lease term
of 12 months or less. Low-value assets comprise certain IT equipment and small items of office equipment.
Extension and termination options are included in a number of leases across the Group. In determining the lease term, management
considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a
termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is
reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in
circumstances occurs which affects the assessment and that is within the control of the Group. This reassessment could result in a
recalculation of the lease liability and a material adjustment to the associated balances.
Provisions accounting policy
Provisions are created where the Group has a present legal or constructive obligation as a result of a past event, where it is
probable that it will result in an outflow of economic benefits to settle the obligation, and where it can be reliably measured. For
dilapidations on leased properties this is when a requirement for repairs or reinstatement is identified.
Exceptional items
The Group makes certain adjustments to the statutory profit measures in order to derive certain alternative performance
measures. Certain pre-tax items, excluding amortisation and impairment of intangible assets, are presented as exceptional items on
the face of the consolidated income statement. Exceptional items are those items that, in the judgement of the Group, need to be
disclosed separately due to their size, nature or irregularity. Separate disclosure provides assistance in understanding the underlying
performance of the business. Restructuring and transformational costs are considered on a case-by-case basis as to whether they
meet the exceptional criteria. Other items are considered against the exceptional criteria based on specific circumstances. The
presentation is consistent with the way financial performance is measured by management and reported to the Board. Further
discussion is disclosed in note 4.
Accounting estimates and judgements
The key accounting policies, estimates and judgements used in preparing the Group’s and Company’s Annual Report and Accounts
for the year-ended 31 March 2024 have been reviewed and approved by the Board.
Key accounting estimates
The areas of principal accounting uncertainty that could have a significant impact in the next 12 months are the useful lives of rental
assets, including residual values, the testing for impairment of goodwill and other intangibles which require significant estimates
relating to cash flows.
Depreciation Rates
The Group continually reviews depreciation rates and, using its judgement, adopts a best estimate policy in assessing the estimated
useful economic lives of fleet assets. The rate of technological and legislative change and impact of climate-related risks is factored
into the estimates, together with the diminution in value through use and time. The Group also takes account of the profit or loss
it makes on the disposal of fixed assets in determining whether depreciation policies are appropriate. The net book value of rental
equipment at 31 March 2024 is £226.0 million (2023: £220.6 million).
Impairment of goodwill and intangible assets
Goodwill and other intangible assets are tested for impairment by reference to the higher of expected estimated cash generated
by the CGU or fair value less cost to sale. This is deemed to be the best approximation of value but is subject to the same key
uncertainties over growth and discount rates as the cash flow forecast being used. The carrying value of goodwill at 31 March 2024
is £18.4 million (2023: £44.6 million). See note 10 for details of sensitivity analysis.
Key accounting judgements
The Group applies judgement over the classification of exceptional items. Judgement is required as to whether transactions relate
to costs or incomes which, due to their size, nature or irregularity, are excluded from management’s view of the underlying trading
performance of the Group.
109
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
Prior year restatement on the parent company statement of cash flows
Following a review of the treatment of certain cash flows between group companies within the parent company statement of cash
flows, the comparative figures have been restated to classify loan cash flows between the company and subsidiary undertakings
from operating cash flows to either investing of financing cash flows, based on the nature of the transactions. The impact of this
correction on the parent statement of cash flows for the year ended 31 March 2023 is shown below:
As previously
reported
Restated
Change
Decrease in trade and other receivables
(3,384)
3,551
Decrease /(increase) in current intercompany receivables
-
(918)
Increase/ (decrease) in trade and other payables
(380)
(4,492)
Increase / (decrease) in current intercompany payables
-
(669)
Increase in provisions
-
54
Change in Net Cash from operating activities
1,290
Increase in loans to subsidiary undertakings
-
(20,440)
Decrease in loans to subsidiary undertakings
-
14.423
Change in Net Cash from investing activities
(6,017)
Drawdown of loans from subsidiary undertakings
-
5,282
Repayment of loans from subsidiary undertakings
-
(555)
Change in Net Cash from financing activities
4,727
2. Segment reporting
Segment reporting is presented in respect of the Group’s business and geographical segments. The Group’s reportable segments
are the two units, UK and International. This has been determined on the way in which financial information is organised and
reported to the Group Board, who are responsible for the key operating decisions of the Group, the allocation of resources and
the assessment of performance and, hence, are the chief operating decision makers. Total external revenue in 2024 was £368.7
million (2023: £371.5 million). Inter-segment pricing is determined on an arm’s length basis. Included within revenue is £32.9 million
(2023: £31.9 million) of revenue relating to the sale of goods; the rest of the revenue is service related, including hire revenue.
Segment results, assets and liabilities include items directly attributable to a segment, as well as those that can be allocated on a
reasonable basis.
Geographical segments
Revenue is generated mainly within the United Kingdom with no single overseas geographical area accounting for more than 10%
of the Group revenue. Total overseas revenue was £68.0 million (2023: £63.3 million), including overseas revenue generated by the
UK-based divisions.
Business segments
Revenue
Operating profit
before amortisation
and impairment
of goodwill, trade
names and customer
relationships and
exceptional items
2024
2023
2024
2023
External
revenue
£000
Internal
revenue
£000
Total
revenue
£000
External
revenue
£000
Internal
revenue
£000
Total
revenue
£000
£000
£000
UK
330,068
12,081
342,149
333,453
8,217
341,670
44,684
45,564
International
38,623
244
38,867
38,066
42
38,108
4,812
3,211
368,691
12,325
381,016
371,519
8,259
379,778
49,496
48,775
A reconciliation of operating profit before amortisation and impairment of goodwill, trade names and customer relationships and
exceptional items to profit before tax is provided in the Income Statement.
110
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Assets
Liabilities
Net assets
2024
2023
2024
2023
2024
2023
£000
£000
£000
£000
£000
£000
UK
399,424
427,056
270,639
279,951
128,785
147,105
International
40,534
42,318
16,299
14,491
24,235
27,827
439,958
469,374
286,938
294,442
153,020
174,932
Depreciation
Capital expenditure
2024
2023
2024
2023
£000
£000
£000
£000
UK
39,453
42,160
62,069
59,952
International
4,685
4,693
7,807
6,908
44,138
46,853
69,876
66,860
Capital expenditure relates to property, plant and equipment acquired in the normal course of business.
Included within segmental assets above is goodwill in relation to the following segments: UK £16.7 million (2023: £42.6 million),
International £1.7 million (2023: £2.0 million).
Included within segmental assets above is other intangibles in relation to the following segments: UK £9.6 million (2023: £12.0
million), International £0.6 million (2023: £1.1 million)
Included within segmental assets is plant, property and equipment in relation to the following segments: UK £231.6 million (2023:
£228.3 million), International £25.3 million (2023: £24.1 million)
No single customer contributes to more than 10% of the Group’s revenue.
3. Operating profit
2024
2023
£000
£000
Operating profit is stated after charging/(crediting):
Amortisation and impairment of intangible assets
32,054
4,490
Depreciation of property, plant and equipment – owned
44,138
46,853
– leased
16,488
16,305
Profit on disposal of property, plant and equipment
(7,456)
(9,174)
Amounts paid to Auditors:
Audit fees – Parent Company annual accounts
562
515
– other Group companies
73
73
– other Group companies in respect of prior year audits
25
80
– total Group
660
668
Audit-related assurance services all within the Parent Company
1
1
4. Exceptional items
During the year, the Group incurred costs which were identified as being exceptional items.
2024
2023
£000
£000
Restructuring and reorganisations
5,817
3,323
Costs associated with the Formal Sale Process
–
1,687
Total Exceptional Items
5,817
5,010
Current year restructuring and reorganisation costs include costs relating to changes to the Group’s Board and Senior leadership
team (£1.6 million) and branch closure costs (£4.2 million). Costs relating to Board and leadership changes are considered
111
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
exceptional due to the size and irregularity. Branch closure costs are deemed exceptional due to their size and nature. Branch
closure costs include redundancies, property exit costs and the write-off of assets that can no longer be used. In all cases, these
closures and reorganisations were part of a one-off process and were completed by 31 March 2024.
Costs associated with the Formal Sale Process in the prior year were professional fees which were incurred by the Group as part of
the procedure. This was a one-off process, which is deemed to be exceptional.
The exceptional items above result in a reduction of £1,453,000 (2023: £612,000) in the tax charge.
The net cash outflow from activities associated with exceptional items is £4.0 million (2023: £2.4 million).
5. Employment costs
Group
The average monthly number of persons employed by the Group (including Directors) during the year, analysed by category, was as
follows:
Number of employees
2024
2023
Operations
1,972
2,052
Sales
329
344
Administration
597
553
2,898
2,949
The aggregate payroll costs of these persons were as follows:
2024
2023
£000
£000
Wages and salaries
112,480
109,575
Social security costs
9,846
10,125
Other pension costs
3,762
3,648
Share option costs including associated social security costs – equity-settled
751
466
– cash-settled
(341)
(521)
126,498
123,293
Company
The average monthly number of persons employed by the Company (including Directors) during the year, analysed by category, was
as follows:
Number of employees
2024
2023
Operations
403
403
Sales
123
123
Administration
191
187
717
713
Company
The aggregate payroll costs of these persons were as follows:
2024
2023
£000
£000
Wages and salaries
33,896
32,383
Social security costs
3,602
3,686
Other pension costs
888
838
Share option costs including associated social security costs
– equity settled
432
281
– cash-settled
(341)
(521)
38,477
36,667
112
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
6. Remuneration of Directors
The Group’s key management are the Executive and Non-Executive Directors. The aggregate remuneration paid to, or accrued for,
the Directors for services in all capacities during the year is as follows:
2024
2023
£000
£000
Basic remuneration including bonus and benefits
1,288
1,886
Pension contributions
145
174
Share options
–
81
1,433
2,141
Further details of Directors’ remuneration, pensions and share options, including the highest-paid Director, are given in the annual
report on remuneration on page 70 onwards. No amounts were accruing for Directors in relation to Defined Benefit pension
schemes.
7. Net financial expense
2024
2023
£000
£000
Financial income:
Bank and other interest receivable
58
32
Financial expenses:
Bank loans, overdrafts and other interest
(6,378)
(5,563)
Finance charges in respect of leases under IFRS 16
(3,315)
(3,038)
(9,693)
(8,601)
Net financial expense
(9,635)
(8,569)
8. Income tax expense
2024
2023
Current tax expense
£000
£000
UK Corporation tax charge at 25% (2023: 19%)
6,066
4,909
Overseas tax – current year
2,075
724
Adjustments in respect of prior years – UK
(317)
(399)
Adjustments in respect of prior years – Overseas
185
(738)
Total current tax
8,009
4,496
Deferred tax expense
Origination and reversal of temporary differences
(122)
1,336
Impact of tax rate change
–
1,151
Adjustments to deferred tax in respect of prior years
250
713
Total deferred tax
128
3,200
Total tax expense in income statement
8,137
7,696
Reconciliation of effective tax rate
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the statutory tax rate applicable
to profits of the consolidated entities as follows:
113
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
2024
2024
2023
2023
%
£000
%
£000
Profit before tax
2,846
30,706
Profit multiplied by standard
rate of corporation tax
25.0%
712
19.0%
5,834
Effects of:
Impact of tax rate changes
–
–
3.7%
1,151
Expenses not deductible for tax purposes
13.2%
377
1.2%
354
Non-qualifying depreciation and amortisation
19.5%
556
1.4%
429
Gains covered by exemption/losses
(22.2)%
(632)
(1.6%)
(488)
Capital allowances super-deduction
–
–
(0.6%)
(195)
Unutilised tax losses
–
–
0.2%
55
Effects of overseas tax rates
11.6%
329
2.0%
618
Impairment of goodwill not deductible for tax purposes
227.3%
6,470
–
–
Share options
7.3%
207
1.2%
362
Adjustments in respect of prior years
4.1%
118
(1.4%)
(424)
Total tax charge for the year
285.9%
8,137
25.1%
7,696
Tax recognised in reserves
2024
2023
£000
£000
Other comprehensive income:
Tax relating to actuarial losses on defined benefit pension schemes
(98)
(60)
Tax relating to historic asset revaluations
(1)
(1)
Tax relating to foreign exchange translation differences
(149)
56
Impact of tax rate change
–
(58)
Direct to equity:
(248)
(63)
Deferred tax relating to share-based payments
20
(62)
Impact of tax rate change
–
(16)
20
(78)
Total tax recognised in reserves
(228)
(141)
The UK corporation tax rate for the year-ended 31 March 2024 was 25% (2023: 19%).
The rate of corporation tax changed from 19% to 25% on 1 April 2023. Therefore, the opening and closing deferred tax assets/
liabilities are measured at 25%.
The main reconciling items are:
• impairment of goodwill, which is not deductible for tax purposes;
• expenses not deductible for tax purposes: primarily related to capital transactions, disallowable expenses and customer
entertaining;
• non-qualifying depreciation: mainly relates to depreciation on land and buildings;
• share options, reflecting share based payment charges in excess of tax relief;
• gains covered by exemptions/losses, which relates to chattels exemptions on the disposal proceeds of fleet items;
• overseas tax rates which are higher than the UK tax rate, particularly in Australia and Germany; and
• adjustments in respect of prior years; reflecting the differences between the tax calculation for accounts purposes and the final
tax returns. Factors include disallowed expenses and chargeable gains.
8. Income tax expense continued
114
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
The effective tax rate before any prior year adjustments, tax rate change, impairment of intangible assets and other exceptional
items would be expected to be 2.1% over the standard rate of tax (2023: 2.1%).
The closing unremitted earnings of subsidiaries is approximately £175 million (2023: £183 million). No deferred tax liability is
recognised on investments in subsidiaries and branches because the Parent Company is able to control the timing of the reversal of
the temporary difference, and it is probable that the temporary difference will not reverse in the foreseeable future.
9. Property, plant and equipment
GROUP
Land and
buildings
Rental
equipment
Motor
vehicles
Other
assets
Total
Cost or deemed cost
£000
£000
£000
£000
£000
At 1 April 2022
45,333
442,908
5,720
37,904
531,865
Additions
2,532
59,944
714
3,670
66,860
Disposals
(280)
(48,487)
(258)
(407)
(49,432)
Exchange rate differences
(3)
769
69
(82)
753
Transfer between categories
-
(5)
-
5
-
At 31 March 2023
47,582
455,129
6,245
41,090
550,046
Additions
3,408
62,831
866
2,771
69,876
Disposals
(615)
(52,848)
(623)
(911)
(54,997)
Transfer to intangible assets
–
–
–
(3,285)
(3,285)
Exchange rate differences
(24)
(2,128)
(106)
(191)
(2,449)
Transfer between categories
–
(2)
–
2
–
At 31 March 2024
50,351
462,982
6,382
39,476
559,191
Accumulated depreciation and impairment
losses
At 1 April 2022
24,054
226,284
2,663
31,338
284,339
Charge for year
2,093
40,888
876
2,996
46,853
On disposals
(195)
(32,943)
(231)
(383)
(33,752)
Exchange rate differences
(7)
264
11
(47)
221
Transfer between categories
–
(3)
–
3
–
At 31 March 2023
25,945
234,490
3,319
33,907
297,661
Charge for year
2,270
38,757
873
2,238
44,138
On disposals
(459)
(35,275)
(603)
(845)
(37,182)
Transfer to intangible assets
–
–
–
(1,213)
(1,213)
Exchange rate differences
(21)
(967)
(45)
(124)
(1,157)
Transfer between categories
–
11
–
(11)
–
At 31 March 2024
27,735
237,016
3,544
33,952
302,247
Net book value
At 31 March 2024
22,616
225,966
2,838
5,524
256,944
At 31 March 2023
21,637
220,639
2,926
7,183
252,385
At 31 March 2022
21,279
216,624
3,057
6,566
247,526
115
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
9. Property, plant and equipment continued
COMPANY
Land and
buildings
Rental
equipment
Motor
vehicles
Other
assets
Total
Cost or deemed cost
£000
£000
£000
£000
£000
At 1 April 2022
19,181
192,667
1,801
14,907
228,556
Additions
823
22,003
236
2,009
25,071
Group transfers in
–
3,443
–
–
3,443
Group transfers out
–
(3,939)
–
–
(3,939)
Disposals
(109)
(14,872)
(195)
(109)
(15,285)
At 31 March 2023
19,895
199,302
1,842
16,807
237,846
Additions
824
23,297
601
858
25,580
Group transfers in
–
4,269
–
12
4,281
Group transfers out
–
(4,301)
–
–
(4,301)
Disposals
(97)
(22,047)
(215)
(501)
(22,860)
Transfers to intangible assets
-
-
-
(2,218)
(2,218)
At 31 March 2024
20,622
200,520
2,228
14,958
238,328
Accumulated depreciation and impairment
losses
At 1 April 2022
7,060
95,054
1,130
10,985
114,229
Charge for year
584
11,787
215
1,507
14,093
Group transfers in
–
1,966
–
–
1,966
Group transfers out
–
(2,005)
–
–
(2,005)
On disposals
(93)
(8,382)
(181)
(89)
(8,745)
At 31 March 2023
7,551
98,420
1,164
12,403
119,538
Charge for year
623
11,717
245
1,100
13,685
Group transfers in
–
2,079
–
12
2,091
Group transfers out
–
(2,310)
–
–
(2,310)
On disposals
(40)
(12,660)
(204)
(483)
(13,387)
Transfers to intangible assets
-
-
-
(700)
(700)
At 31 March 2024
8,134
97,246
1,205
12,332
118,917
Net book value
At 31 March 2024
12,488
103,274
1,023
2,626
119,411
At 31 March 2023
12,344
100,882
678
4,404
118,308
At 31 March 2022
12,121
97,613
671
3,922
114,327
The cost or deemed cost of land and buildings for the Group and the Company includes £3,204,000 (2023: £3,204,000) of freehold
land not subject to depreciation.
The banks that provide the Group’s funding facilities have a fixed and floating charge over the assets of the Group as set out in
note 16.
116
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
10. Intangible assets
GROUP
Trade
names
£000
Customer
relationships
£000
Supply
agreements
£000
Goodwill
£000
Total
intangible
assets
acquired
as part of
business
combinations
£000
Software
£000
Total
intangibles
£000
Cost or deemed cost
At 1 April 2022
14,405
26,631
4,989
73,184
119,209
–
119,209
Exchange rate differences
(92)
(95)
–
(124)
(311)
–
(311)
At 31 March 2023
14,313
26,536
4,989
73,060
118,898
–
118,898
Transfers in from PPE
–
–
–
–
–
3,285
3,285
Additions during the year
–
–
–
–
–
963
963
Disposed of
–
–
(4,989)
–
(4,989)
–
(4,989)
Exchange rate differences
(78)
(82)
–
(116)
(276)
–
(276)
At 31 March 2024
14,235
26,454
–
72,944
113,633
4,248
117,881
Accumulated
amortisation and
impairment
At 1 April 2022
7,871
15,688
4,989
28,239
56,787
–
56,787
Exchange rate differences
(64)
(63)
–
–
(127)
–
(127)
Amortisation
1,230
2,103
–
–
3,333
–
3,333
Impairment
271
714
–
172
1,157
–
1,157
At 31 March 2023
9,308
18,442
4,989
28,411
61,150
–
61,150
Exchange rate differences
(58)
(58)
–
(3)
(119)
–
(119)
Transfers in from PPE
–
–
–
–
–
1,213
1,213
Amortisation
1,159
1,919
–
–
3,078
856
3,934
Impairment
924
1,068
–
26,128
28,120
–
28,120
Disposed of
–
–
(4,989)
–
(4,989)
–
(4,989)
At 31 March 2024
11,333
21,371
–
54,536
87,240
2,069
89,309
Carrying amount
At 31 March 2024
2,902
5,083
–
18,408
26,393
2,179
28,572
At 31 March 2023
5,005
8,094
–
44,649
57,748
–
57,748
At 31 March 2022
6,534
10,943
–
44,945
62,422
–
62,422
Supply agreements are now fully expired and therefore were disposed of during the year.
117
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
10. Intangible assets continued
Goodwill and indefinite life intangible assets considered significant in comparison to the Group’s total carrying amount of such
assets have been allocated to cash-generating units (CGUs) or groups of CGUs as follows:
Goodwill
2024
2023
£000
£000
Groundforce
7,459
7,465
Brandon Hire Station
–
25,876
ESS
5,260
5,260
MEP
3,981
3,981
TR
1,708
2,067
18,408
44,649
Goodwill arising on business combinations has been allocated to CGUs that are expected to benefit from those business
combinations.
The carrying value of intangible assets and goodwill has been assessed for impairment by reference to its recoverable amount,
being the higher of its value in use and fair value less costs of disposal. Value in use has been estimated using cash flow projections
over a period of five years derived from the approved budget for the coming year and subsequent year’s long-range forecast. The
key assumptions within the cash flow projections are those regarding revenue growth, operating margin and level of capital spend
required to support the business. These assumptions have been based on past experience, market conditions and the size of the
fleet. The Group tests goodwill annually for impairment, or more frequently if there are any indications that goodwill might be
impaired.
In the current year, trading conditions for Brandon Hire Station deteriorated and some trading locations were closed resulting in
some exceptional costs (see note 4). The cash flow projections for Brandon Hire Station take into account recent performance,
resulting in the recoverable amount derived for that CGU being lower than its previous carrying value. A full impairment of the
goodwill attached to the CGU and a part-impairment of the intangible assets allocated to it has therefore been taken.
These impairments are included on the face of the Consolidated Income Statement and are not included in exceptional items;
however, they are excluded from the Group’s adjusted profit before tax, amortisation, impairment of goodwill, trade names and
customer relationships and exceptional items as per the Alternative Performance Measures on page 143.
The pre-tax discount rate applied to all CGUs was 13.2% (2023: 11.8%), an estimate based on the Group’s weighted average cost
of capital adjusted to reflect the required return an investee would expect from each CGU. The same discount rate is used as all
CGUs are considered to have similar profiles. A long-term growth rate factor of 2.0% (2023: 2.0%) was applied when assessing
impairment reflecting the long-term average growth rate for the UK economy.
Following impairment the closing carrying amount of trade names and customer relationships of £2.9 million and £5.1 million
respectively, include £2.6 million (2023: £4.3 million) and £3.6 million (2023: £6.0 million) associated with the Brandon Hire Station
CGU. The remaining amortisation period for these intangible assets is between two and three years.
Sensitivity analysis
The Group has conducted an analysis of the sensitivity of the impairment test to changes in the key assumptions used to determine
the recoverable amount for each of the CGUs or groups of CGUs to which goodwill is allocated. The Directors believe that any
reasonably possible change in the key assumptions on which the recoverable amounts of Groundforce, ESS, MEP and TR are based
would not cause the aggregate carrying amounts to exceed the aggregate recoverable amounts of those CGUs.
As noted above, the recoverable amount of the Brandon Hire Station CGU was determined to be lower than its carrying amount,
resulting in the impairment of goodwill and intangible assets. The recoverable amount was based on a value in use model as that
derived a higher value than fair value less costs of disposal. The key assumptions included in deriving value in use were the short
term growth rates in the forecast cash flows and the discount rate.
A reduction in the assumed cash flows by 6.3% for each of the years prior to the perpetuity period, or an increase in the discount
rate by 0.6%, would result in the full impairment of the remaining intangible assets allocated to the CGU.
118
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
COMPANY
Trade
names
Customer
relationships
Supply
agreements
Goodwill
Total of
acquired
goodwill
£000
Software
£000
Total
intangibles
Cost or deemed cost
£000
£000
£000
£000
£000
At 1 April 2022
and 31 March 2023
2,482
5,548
394
25,163
33,587
–
33,587
Transfers in from PPE
–
–
–
–
–
2,218
2,218
Additions during the year
–
–
–
–
–
667
667
Disposed of
–
–
(394)
–
(394)
–
(394)
At 31 March 2024
2,482
5,548
–
25,163
33,193
2,885
36,078
Accumulated amortisation
and impairment
At 1 April 2022
2,195
4,133
394
17,677
24,399
–
24,399
Amortisation charge
2
355
–
–
357
–
357
Impairment charge
271
714
–
172
1,157
–
1,157
At 31 March 2023
2,468
5,202
394
17,849
25,913
–
25,913
Transfers in from PPE
–
–
–
–
–
700
700
Amortisation charge
14
116
–
–
130
584
714
Disposed of
–
–
(394)
–
(394)
–
(394)
At 31 March 2024
2,482
5,318
–
17,849
25,649
1,284
26,933
Carrying amount
At 31 March 2024
–
230
–
7,314
7,544
1,601
9,145
At 31 March 2023
14
346
–
7,314
7,674
–
7,674
At 31 March 2022
287
1,415
–
7,486
9,188
–
9,188
The Directors have reviewed the carrying amount of the Company’s goodwill and indefinite life intangible assets on the same basis
as the Group‘s goodwill and concluded that there are no additional impairment charges required.
11. Leases
This note provides information for leases where the Group is a lessee.
(a) Amounts recognised in the balance sheet
The recognised right-of-use assets relate to the following types of assets:
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Property
38,768
39,785
4,833
5,101
Equipment
5,952
5,302
5,065
3,735
Vehicles
13,925
9,550
5,068
2,571
Total right-of-use assets
58,645
54,637
14,966
11,407
The recognised lease liabilities relate to the following types of assets:
119
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
11. Leases continued
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Property
42,233
43,754
5,155
5,414
Equipment
6,171
5,494
5,276
3,910
Vehicles
13,557
9,270
4,940
2,492
Total lease liabilities
61,961
58,518
15,371
11,816
Of which are:
– Current lease liabilities
16,319
14,622
4,245
3,579
– Non-current lease liabilities
45,642
43,896
11,126
8,237
61,961
58,518
15,371
11,816
Additions to the right-of-use assets during the current financial year for the Group was £17.2 million (2023: £9.7 million) and for the
Company was £8.1 million (2023: £1.8 million).
(b) Amounts recognised in the consolidated income statement
The consolidated income statement shows the following amounts relating to leases for the year-ended 31 March 2024:
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Depreciation charge on right-of-use assets
Property
8,249
8,556
907
1,010
Equipment
2,737
3,495
1,880
2,494
Vehicles
5,502
4,254
1,870
1,359
16,488
16,305
4,657
4,863
Interest expense (included in finance expenses)
3,315
3,038
816
701
Expense relating to short-term leases
(included in cost of sales and administrative expenses)
4,484
2,051
1,064
131
Expenses relating to low-value assets that are not shown above as
short-term leases (included in administrative expenses)
234
–
37
–
The total cash outflow for leases in 2024, including interest, for the Group was £20.6 million (2023: £19.0 million) and for the
Company was £5.0 million (2023: £5.6 million).
Short-term leases are leases with a term of 12 months or less. Low-value leases relate to any leases that had a value of £5,000 or
less at the lease term commencement date.
12. Investments in subsidiaries
Company
Cost
£000
At 1 April 2022 and 1 April 2023
68,775
Strike off of dormant companies
(4,370)
Carrying amount at 31 March 2024
64,405
At 31 March 2023
68,775
At 31 March 2022
68,775
See note 30 for details of subsidiary undertakings.
120
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
13. Inventories
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Raw materials and consumables
4,015
3,599
1,815
1,679
Goods for resale
5,533
5,316
977
593
9,548
8,915
2,792
2,272
During the year, as a result of the year-end assessment of inventory, there was a £292,000 decrease in the Group provision for
impairment of inventories (2023: £56,000 increase) and a £80,000 decrease for the Company (2023: £104,000 increase). The
provision reflects the Group’s best estimate of potential inventory obsolescence. The cost of goods for resale expensed during
the year was £25.2 million (2023: £23.9 million). Inventories are stated after provisions for impairment of £1,578,000 (2023:
£1,870,000). Due to the nature of the spares expenditure, and the approach to accounting for spares, it is not possible to provide
the value of spares inventory expensed.
14. Trade and other receivables
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Gross trade receivables
71,421
77,618
22,291
22,643
Trade receivables provisions
(4,923)
(4,646)
(1,833)
(1,183)
Amounts owed by subsidiary undertakings
–
–
3,395
3,633
Other receivables
1,641
1,732
238
1,099
Prepayments and accrued income
6,614
6,809
2,992
2,171
74,753
81,513
27,083
28,363
Non-current assets
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Amounts owed by subsidiary undertakings
–
–
84,699
61,716
Amounts owed by subsidiary undertakings are unsecured, repayable either on demand or ten years from agreement date and range
in interest from 0% to 7%.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivables as shown above. The
Group does not hold any collateral as security.
The valuation of the provision reflects The Group’s and Company’s best estimates of likely impairment as a result of the ageing of
the debt, expected credit losses and its knowledge of the debtors. The Group and Company have a reasonable spread of credit
risk with the top 25 customers accounting for significantly less than 50% of gross trade debtors. The Group and Company does
not consider there to have been a significant increase in credit risk during the year. The ageing of the Group’s and Company’s trade
receivables (net of impairment provision) at the end of the year was as follows:
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Not overdue
47,262
59,376
15,053
15,632
0–30 days overdue
9,414
6,038
3,803
3,479
31–90 days overdue
3,764
3,521
1,060
1,357
More than 90 days overdue
5,877
4,037
541
992
66,499
72,972
20,457
21,460
On this basis, there are £19.2 million (2023: £13.6 million) (Group) and £5.4 million (2023: £5.8 million) (Company) trade receivables
at the balance sheet date that have not been provided against. There is no indication as at 31 March 2024 that debtors will not meet
their payment obligations in respect of trade receivables recognised in the balance sheet that are unprovided. On this basis, there is
no material difference between the fair value and the carrying value.
121
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
14. Trade and other receivables continued
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
At 1 April
4,646
5,203
1,183
1,221
Impairment provision charged to the Income Statement
3,743
3,305
510
880
Utilised in the year
(3,466)
(3,862)
140
(918)
At 31 March
4,923
4,646
1,833
1,183
15. Cash and cash equivalents
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Bank balances and cash in hand
24,527
14,697
4,226
5,389
Bank overdraft
(18,466)
(3,557)
(18,466)
(3,557)
Net cash and cash equivalents/(overdrafts)
6,061
11,140
(14,240)
1,832
16. Interest-bearing loans and borrowings
Group
Company
2024
£000
2023
£000
2024
£000
2023
£000
Current liabilities
Lease liabilities
16,319
14,622
4,245
3,579
Non-current liabilities
Secured bank loans
39,000
53,000
39,000
53,000
Secured private placement loan
93,000
93,000
93,000
93,000
Arrangement fees
(720)
(492)
(720)
(492)
Lease liabilities
45,642
43,896
11,126
8,237
176,922
189,404
142,406
153,745
Net debt defined as total borrowings less cash and cash equivalents was:
Group
As at
31 Mar 2023
£000
Cash
movements
£000
Non-cash
movements
£000
As at
31 Mar 2024
£000
Secured loans
146,000
(14,000)
–
132,000
Arrangement fees
(492)
(655)
427
(720)
Cash and cash equivalents
(11,140)
5,053
26
(6,061)
Net debt excluding lease liabilities
134,368
(9,602)
453
125,219
Lease liabilities
58,518
(20,590)
24,033
61,961
Net debt including lease liabilities
192,886
(30,192)
24,486
187,180
122
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Company
As at
31 Mar 2023
£000
Cash
movements
£000
Non-cash
movements
£000
As at
31 Mar 2024
£000
Secured loans
146,000
(14,000)
–
132,000
Arrangement fees
(492)
(655)
427
(720)
Cash and cash equivalents
(1,832)
16,072
–
14,240
Net debt excluding lease liabilities
143,676
1,417
427
145,520
Lease liabilities
11,816
(5,476)
9,031
15,371
Net debt including lease liabilities
155,492
(4,059)
9,458
160,891
The repayment schedule of the carrying amount of the non-current borrowings as at 31 March 2024 is:
Group
Company
2024
2023
2024
2023
Due in less than one year:
£000
£000
£000
£000
Lease liabilities
16,319
14,622
4,245
3,579
Due in more than one year but not more than two years:
Secured bank loans
–
53,000
–
53,000
Lease liabilities
13,092
12,218
3,484
2,586
Total
13,092
65,218
3,484
55,586
Due in more than two years but not more than five years:
Secured bank loans
39,000
–
39,000
–
Secured private placement loan
93,000
65,000
93,000
65,000
Lease liabilities
22,003
20,640
5,844
4,067
Total
154,003
85,640
137,844
69,067
Due in more than five years:
Secured private placement loan
–
28,000
–
28,000
Lease liabilities
10,547
11,038
1,798
1,584
Total
10,547
39,038
1,798
29,584
The bank loans and overdraft are secured by a fixed and floating charge over the assets of the Group and are at variable interest
rates linked to SONIA. The unutilised bank facilities available to the Group as at 31 March 2024 were £51 million (2023: £37
million). In November 2023, the Group refinanced its committed revolving credit facility with a new three-year, £90 million facility
maturing in November 2026. The revolving credit facility agreement also includes a £30 million uncommitted accordion facility.
The Group has two private placement loans. The first loan provides funding of £65.0 million and matures in January 2027. The
second loan provides funding of £28.0 million and matures in April 2028. Both loans have fixed interest rates payable semi-annually
and were fully drawn at the balance sheet date.
In November 2023, the Group refinanced its committed revolving credit facility with a new three-year, £90 million facility, maturing
in November 2026. The revolving credit facility agreement also includes a £30 million uncommitted accordion facility.
There is no material difference between the carrying value and fair value of the Group’s borrowings. Further details relating to the
Group’s funding strategy (including the maturity details of the bank loans) and its credit, interest rate and currency risk policies
are provided in the Financial Review on pages 22 to 23, the Risk Management Report on pages 51 to 55 and the Directors’ Report
within going concern on pages 85 to 86. The loans are subject to covenants. Interest cover before amortisation was 7.3 times (2023:
8.3 times) and the gearing ratio of adjusted Net Debt/EBITDA was 1.36 (2023: 1.44); both are calculated in accordance with our
bank facility agreements and are comfortably within our covenants of greater than 3 times and lower than 2.5 times respectively.
123
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
16. Interest-bearing loans and borrowings continued
Liquidity risk
The following are cash flows relating to the Group’s financial liabilities, including estimated interest payments, but excluding the
impact of netting agreements, based on the assumption that the loans are repaid at the end of the committed period.
GROUP
Carrying
value
Contractual
cash flows
Less than
1 year
1–2
years
2–5
years
Over 5
years
31 March 2024
£000
£000
£000
£000
£000
£000
Secured loans
132,000
154,351
5,285
5,285
143,781
–
Lease liabilities
61,961
67,745
18,087
14,163
23,926
11,569
Trade payables and accruals
64,800
64,800
64,133
667
–
–
258,761
286,896
87,505
20,115
167,707
11,569
31 March 2023
Secured loans
146,000
172,743
5,797
58,797
80,138
28,011
Lease liabilities
58,518
64,820
16,041
12,946
22,448
13,385
Trade payables and accruals
64,448
64,448
64,448
–
–
–
268,966
302,011
86,286
71,743
102,586
41,396
COMPANY
Carrying
Contractual
Less than
1–2
2–5
Over 5
value
cash flows
1 year
years
years
years
31 March 2024
£000
£000
£000
£000
£000
£000
Secured loans
132,000
154,351
5,285
5,285
143,781
–
Lease liabilities
15,371
15,121
4,435
3,568
5,651
1,467
Trade payables, accruals and amounts
owed to subsidiary undertakings
88,691
92,497
69,184
950
22,363
–
236,062
291,969
78,904
9,803
171,795
1,467
31 March 2023
Secured loans
146,000
172,743
5,797
58,797
80,138
28,011
Lease liabilities
11,816
18,274
5,083
3,330
5,775
4,086
Trade payables, accruals and amounts
owed to subsidiary undertakings
(restated)*
78,120
81,920
61,905
760
2,280
16,975
235,936
272,937
72,785
62,887
88,193
49,072
* Trade and other payables include trade payables, accruals and amounts owed to subsidiary undertakings. The
comparative figures have been restated to include all financial liabilities and to reflect all contractual cash flows.
124
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
17. Financial instruments
The Group finances its operations through a combination of shareholders’ funds, bank borrowings and leases. The capital structure
is monitored using the gearing ratio of debt to shareholders’ funds. The Group’s funding requirements are largely driven by capital
expenditure and acquisition activity.
Capital management
The Group manages capital by monitoring net debt and covenants closely. The revolving credit facility (RCF) is drawn down or
repaid when appropriate in line with cash flows requirements. The Group purchases its own shares through its employee trust,
solely for the purpose of fulfilling share incentive schemes.
Financial risks
Through its operations the Group is exposed to a number of financial risks. The Group’s risk management framework is designed
to ensure that all key risks, including financial risks, are recognised and mitigation plans are evaluated for effectiveness. The Group’s
approach to risk management is set out in the Strategic report on pages 50 to 55. They key financial risks resulting from financial
instruments which the Group is exposed to are interest rate risk, exchange rate risk, credit risk and liquidity risk.
Interest rate risk: The Group is exposed to movements in interest rates on its borrowings, which is managed by maintaining a mix
of fixed and floating debt. The fixed element of borrowings is £93.0 million, which was 74% of net debt excluding lease liabilities
during the year.
Exchange rate risk: The Group is exposed to movements in exchange rates for both foreign currency transactions and the
translation of net assets and income statements of foreign subsidiaries. The Group regards its interests in overseas subsidiary
companies as long-term investments and manages its transactional exposures through the currency matching of assets and liabilities
where possible. All debt is in GBP and the majority of cash held is also in GBP.
Credit risk: The Group is exposed to credit risk in the context of our customer base. This is managed closely with constant review
by the Group and divisional management teams to ensure the optimal equilibrium between risk and opportunity is maintained.
Where appropriate, credit insurance is obtained over some balances.
Liquidity risk: The Group is exposed to a risk that it will not be able to meet its financial obligations as they fall due. The Board is
responsible for ensuring that the Group has sufficient liquidity to meet its financial liabilities and ensures this by frequent review of
headroom available in the RCF. Sensitivity analysis is also carried out to ensure that sufficient funds would be available in the case of
a severe but plausible downturn in cash availability. A maturity analysis of the Group’s contractual cash flows relating to its financial
liabilities is included in note 16.
There are no material differences between the carrying value and the fair value of the Group’s other financial instruments, including
trade debtors and trade creditors.
125
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
17. Financial instruments continued
The risks associated with interest rate and foreign exchange rate management are further discussed in the Capital Structure and
Treasury section of the Financial review on pages 22 and 23 and the Principal risks on pages 52 to 55, as are the risks relating to
credit and currency management and the capital management of the Group.
Financial instrument sensitivity analysis
10% movements in sterling exchange rates and interest rates in the current and prior year would have increased/(decreased) equity
and profit/(loss) by the amounts shown below. This analysis assumes that all other variables remain constant.
Equity and profit/(loss)
2024
2023
10% strengthening of sterling against:
£000
£000
US dollar
(4)
39
Australian dollar
28
17
Singapore dollar
(8)
(2)
Euro
73
2
10% weakening of sterling against:
US dollar
5
(48)
Australian dollar
(34)
(21)
Singapore dollar
10
2
Euro
(90)
(2)
10% movement in sterling interest rates:
Increase in interest rates
(274)
(22)
Decrease in interest rates
274
22
The exposure of the Group to other foreign exchange rate movements is not significant and, therefore, is not presented in the
analysis above.
18. Trade and other payables
Current liabilities
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Trade payables
28,796
30,568
7,793
8,576
Amounts owed to subsidiary undertakings
–
–
44,105
37,882
Other tax and social security
6,607
5,799
2,443
2,116
Accruals and deferred income
36,317
35,817
16,574
16,007
71,720
72,184
70,915
64,581
Within accruals is £1.6 million (2023: £2.0 million) in relation to the liability for cash-settled share options, which are also valued at
fair value. All other liabilities are valued at amortised cost. There are no material liabilities in relation to contracts with customers.
Amounts owed to subsidiary undertakings are repayable on demand, unsecured and interest free.
Non-current liabilities
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Amounts owed to subsidiary undertakings
–
–
20,457
16,975
Accruals and deferred income
667
–
–
–
Amounts owed to subsidiary undertakings are unsecured, repayable on demand or ten years from agreement date and range in
interest from 0% to 7.0%
126
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
19. Provisions
Provisions relate to dilapidations on properties. The timing and amount of future cash flows related to lease dilapidations are
subject to uncertainty. The provision recognised is based on management’s experience and understanding of the commercial
property market and third party surveyors’ reports where appropriate in order to best estimate the future outflow of funds.
The estimates used take into consideration the location, size and age of the properties. Estimates of future dilapidation costs are
regularly reviewed when new information is available.
GROUP
Group
£000
Company
£000
1 April 2022
1,512
–
Charge during the year
1,137
54
Utilised during the year
(1,013)
–
Unused amounts releases
(24)
–
At 31 March 2023
1,612
54
Charge during the year
2,773
226
Utilised during the year
(880)
(14)
Unused amounts releases
(345)
–
At 31 March 2024
3,160
266
20. Deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
GROUP
Property,
plant
and
equipment
Intangible
assets
Employee
benefits
Other
items
Total
Note
£000
£000
£000
£000
£000
1 April 2022
12,183
4,727
(818)
(2,414)
13,678
Recognised in income statement
2,445
(664)
582
837
3,200
Recognised in reserves
3
–
(122)
–
(119)
Recognised in equity
8
–
–
(78)
–
(78)
Foreign exchange
(94)
(18)
20
31
(61)
At 31 March 2023
14,537
4,045
(416)
(1,546)
16,620
Re-categorised
(490)
490
–
–
–
Recognised in income statement
8
1,085
(1,137)
128
52
128
Recognised in reserves
(1)
–
(98)
–
(99)
Recognised in equity
8
–
–
20
–
20
Foreign exchange
(50)
(14)
16
28
(20)
At 31 March 2024
15,081
3,384
(350)
(1,466)
16,649
Of the deferred tax liability above, the amount expected to unwind within 12 months is £3.9 million (2023: £3.6 million).
127
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
COMPANY
Property,
plant
and
equipment
Intangible
assets
Employee
benefits
Other
items
Total
Note
£000
£000
£000
£000
£000
1 April 2022
12,701
773
(322)
(339)
12,813
Recognised in income statement
1,598
(262)
547
72
1,955
Recognised in reserves
3
–
(254)
–
(251)
Recognised in equity
–
–
(78)
–
(78)
At 31 March 2023
14,302
511
(107)
(267)
14,439
Recognised on acquisition
–
–
–
–
–
Re-categorised
(356)
356
–
–
–
Recognised in income statement
615
36
124
(33)
742
Recognised in reserves
(1)
–
(67)
–
(68)
Recognised in equity
–
–
20
–
20
At 31 March 2024
14,560
903
(30)
(300)
15,133
Of the deferred tax liability above, the amount expected to unwind within 12 months is £3.0 million (2023: £2.9 million).
Deferred tax assets have been recognised on employee benefits and other items on the basis that there will be future taxable
profits against which these assets can be utilised. Deferred tax assets and liabilities are only offset where there is a legally
enforceable right of offset and there is an intention to settle the net balance.
21. Capital and reserves
2024
2023
Ordinary share capital
£000
£000
Allotted, called up and fully paid
40,154,253 ordinary shares of 5 pence each (2023: 40,154,253)
2,008
2,008
The Company articles authorise 60,000,000 shares (2023: 60,000,000). All shares have the same voting rights.
Reserves
Full details of reserves are provided in the consolidated and Parent Company statements of changes in equity on pages 98 and 101.
Own shares held
Deducted from retained earnings (Group and Company) is £5,501,000 (2023: £5,110,000) in respect of own shares held by the Vp
Employee Trust. The Trust acts as a repository of issued Company shares and held 693,000 shares (2023: 609,000) with a market
value at 31 March 2024 of £3,810,000 (2023: £4,104,000).
22. Dividends
2024
2023
£000
£000
Amounts recognised as distributions to equity holders of the Parent Company in the year:
Ordinary shares:
Final paid 26.5p (2023: 25.5p) per share
10,460
10,112
Interim paid 11.5p (2023: 11.0p) per share
4,537
4,359
14,997
14,471
The dividends paid in the year is after dividends were waived to the value of £262,000 (2023: £184,000) in relation to shares held by
the Vp Employee Trust. These dividends will continue to be waived in the future.
In addition, the Directors are proposing a final dividend in respect of the current year of 27.5 pence per share, which will absorb an
estimated £11 million of shareholders’ funds. The proposed dividend is subject to approval by shareholders at the Annual General
Meeting and has not been included in liabilities in the financial statements, and there are no income tax consequences.
128
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
23. Earnings per share
Basic earnings per share
The calculation of basic loss per share of (13.41) pence (2023: earnings of 58.05 pence) was based on the loss after tax of £5,291,000
(2023: profit of £23,010,000) and a weighted average number of ordinary shares outstanding during the year-ended 31 March 2024
of 39,470,000 (2023: 39,635,000), calculated as follows:
2024
Shares
000s
2023
Shares
000s
Issued ordinary shares
40,154
40,154
Effect of own shares held
(684)
(519)
Weighted average number of ordinary shares
39,470
39,635
Diluted earnings per share
The calculation of diluted earnings per share of (13.41) pence (2023: earnings of 57.76 pence) was based on loss after tax of
£5,291,000 (2023: profit of £23,010,000) and a weighted average number of ordinary shares outstanding during the year-ended 31
March 2024 of 39,683,000 (2023: 39,835,000), calculated as follows:
2024
Shares
000s
2023
Shares
000s
Weighted average number of ordinary shares
39,470
39,635
Effect of share options
213
200
Weighted average number of ordinary shares (diluted)
39,683
39,835
The calculation of diluted earnings per share in the current year does not assume conversion, exercise or other issue of potential
ordinary shares that would have an antidilutive effect on earnings per share.
24. Share option schemes
SAYE scheme
During the year, options over a further 386,050 shares were granted under the SAYE scheme at a price of 478 pence. The
outstanding options at the year-end were:
Date of grant
Price per
share
Number of
shares
July 2020
584p
2,586
July 2021
693p
179,937
December 2022
560p
301,919
July 2023
478p
348,673
833,115
Options are exercisable between 3 and 3.5 years. At 31 March 2024, there were 760 employees saving an average of £166 per
month (2023: 954 employees saving £159 per month) in respect of options under the SAYE scheme. The only SAYE scheme
condition is continuous employment over the term of the option.
129
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
24. Share option schemes continued
Approved Share Option Scheme
Options over a further 632,450 shares were granted during the year at a price of 567.5 pence. The options outstanding at the year-
end were:
Date of grant
Price per
share
Number of
shares
July 2014
680.0p
7,300
July 2015
770.0p
23,250
July 2016
657.0p
18,450
July 2017
870.0p
45,085
July 2019
860.0p
17,928
July 2020
698.0p
10,493
July 2021
908.0p
63,600
August 2022
787.0p
215,259
July 2023
567.5p
589,067
990,432
These options are exercisable between the third and tenth anniversary of the grant. The awards for 2021 to 2023 are subject to the
achievement of performance targets over a three-year period. The awards for 2020 and prior are vested, but not yet exercised.
Unapproved Share Option Scheme
Options over 222,550 shares were granted during the year at a price of 567.5 pence. The options outstanding at the year-end were:
Date of Grant
Price per
share
Number of
shares
July 2014
680.0p
48,600
July 2015
770.0p
57,900
July 2016
657.0p
136,650
July 2017
870.0p
148,674
July 2019
860.0p
76,860
July 2020
698.0p
29,737
July 2021
908.0p
585,900
August 2022
787.0p
509,858
July 2023
567.5p
216,850
1,811,029
These options are exercisable between the third and tenth anniversary of the grant. The awards for 2021 to 2023 are subject to the
achievement of performance targets over a three-year period. The awards for 2020 and prior are vested, but not yet exercised.
Long-Term Incentive Plan
Awards were made during the year in relation to a further 574,309 shares. Shares outstanding at the year-end were:
Date of Grant
Number of
shares
July 2014
72,600
July 2015
69,500
July 2016
86,600
July 2017
62,196
July 2019
38,832
July 2020
17,682
July 2021
274,700
August 2022
274,591
July 2023
432,786
1,329,487
130
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
These options are exercisable between the third and tenth anniversary of the grant. The awards for 2021 to 2023 are subject to
the achievement of performance targets over a three-year period as shown in the Annual Report on Remuneration on page 77. The
awards for 2020 and prior are vested, but not yet exercised.
Share matching
No awards were made during the year in relation to shares. Shares outstanding at the year-end were:
Date of grant
Number of
shares
July 2014
1,000
August 2015
900
August 2016
1,200
3,100
These options are exercisable between the third and tenth anniversary of the grant. The awards for 2016 and prior are vested, but
not yet exercised.
Awards under the above schemes will be, generally, made utilising shares owned by the Vp Employee Trust.
The market value of the ordinary shares at 31 March 2024 was 550 pence (2023: 674 pence), the highest market value in the year to
31 March 2024 was 688 pence (2023: 980 pence) and the lowest 485 pence (2023: 660 pence). The average share price during the
year was 582 pence (2023: 779 pence).
The number and weighted average exercise price of share options is as follows:
2024
2023
Weighted
average
exercise
price
Number of
options
000s
Weighted
average
exercise
price
Number of
options
000s
Outstanding at the beginning of the year
555p
5,220
554p
4,658
Lapsed during the year
493p
(2,008)
561p
(962)
Exercised during the year
309p
(60)
484p
(136)
Granted during the year
369p
1,815
557p
1,660
Outstanding at the end of the year
515p
4,967
555p
5,220
Exercisable at the year-end
495p
974
521p
1,100
The options outstanding at 31 March 2024 have an exercise price in the range of 0.0p to 908.0p and have a weighted average life of
1.9 years.
For options granted, the fair value of services received in return for share options granted are measured by reference to the fair value
of those share options. The fair value for the approved, unapproved and SAYE options are measured using the Black–Scholes model
and the LTIP, and share-matching schemes are valued using a discounted grant price method. Cash-settled options are valued at their
fair value at each year-end. The assumptions used to value the probable options granted during the year were in the following ranges:
2024
2023
Weighted average fair value per share
165.0p
184.0p
Share price at date of grant
567.5p to 597.5p
700.0p to 787.0p
Exercise price (details provided above)
0.0p to 567.5p
0.0p to 787.0p
Expected volatility
25.8%
35.7% to 35.9%
Option life
3 to 10 years
3 to 10 years
Expected dividend yield
6.3% to 6.6%
4.6% to 5.1%
Risk free rate
5.00%
1.75% to 3.00%
The expected volatility is based on historic volatility, which is based on the latest three years’ share price data. The cost of share
options charged to the Income Statement is shown in note 5.
The total carrying amount of cash-settled transaction liabilities, including associated national insurance at the year-end was
£1,633,000 (2023: £1,991,000). £1,610,000 of this liability had vested at the year-end (2023: £1,937,000).
131
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
25. Capital commitments
Capital commitments for property, plant and equipment at the end of the financial year, for which no provision has been made, are
as follows:
Group
Company
2024
£000
2023
£000
2024
£000
2023
£000
Contracted
15,965
10,715
3,600
5,137
26. Employee benefits
Defined benefit schemes
The details in this section of the note relate solely to the defined benefit arrangements and exclude any allowance for contributions
in respect of death in service insurance premiums and expenses which are also borne by the Company.
The Group has two defined benefit pension schemes, the main scheme is the Vp Pension Scheme with a net present value surplus
of £1.8 million (2023: £2.1 million). In addition, Torrent Trackside participate in a small section of the Railways Pension Scheme with
a net present value surplus of £0.0 million (2023: £0.2 million net present value obligation). The two schemes are considered below.
Vp pension scheme
Vp plc operates a UK-registered trust-based Pension Scheme that provides defined benefits. Pension benefits are linked to the
members’ final pensionable salaries and service at their retirement (or date of leaving if earlier). The Trustee is responsible for
running the Scheme in accordance with the Scheme’s Trust Deed and Rules, which sets out their powers. The Trustee of the
Scheme is required to act in the best interests of the beneficiaries of the Scheme.
There are two Pension Scheme member categories:
• Deferred members: former employees of the Company who are not yet in receipt of a pension.
• Pension members: those who are in receipt of a pension.
The defined benefit obligation is valued by projecting the best estimate of future benefit outgoings (allowing for revaluation to
retirement for deferred members and annual pension increases for all members) and then discounting to the balance sheet date.
The majority of benefits receive increases in deferment linked to inflation (subject to a cap of no more than 5% pa). The valuation
method used is known as the Projected Unit Method. The approximate overall duration of the Scheme’s defined benefit obligation
as at 31 March 2024 was nine years (2023: 11 years).
The Trustee is required to carry out an actuarial valuation every three years. The last actuarial valuation of the Scheme was
performed by the Scheme Actuary for the Trustee as at 31 March 2021. The valuation revealed a funding surplus of approximately
£2,000,000. The Company, therefore, does not expect to pay any contributions into the Scheme during the accounting year
beginning 1 April 2024. The difference between the actuarial valuation and the IAS 19 valuation reflects the different valuation
dates, the last actuarial valuation was as at 31 March 2021, and the assumptions adopted. The actuarial valuation uses assumptions
determined by the Scheme Trustees to evaluate the Scheme funding requirements on a triannual basis and the IAS 19 valuation uses
assumptions that are chosen by the Company, but heavily prescribed by the accounting standard.
132
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Through the Scheme, the Company is exposed to a number of risks:
• Asset volatility: the Scheme’s defined benefit obligation is calculated using a discount rate set with reference to corporate bond
yields; however, the Scheme invests some of the assets in diversified growth funds. These assets are expected to outperform
corporate bonds in the long term but provide volatility and risk in the short term.
• Changes in bond yields: a decrease in corporate bond yields would increase the Scheme’s defined benefit obligation.
• Inflation risk: a significant proportion of the Scheme’s defined benefit obligation is linked to inflation; therefore, higher inflation
will result in a higher defined benefit obligation (subject to the appropriate caps in place).
• Life expectancy: if Scheme members live longer than expected, the Scheme’s benefits will need to be paid for longer, increasing
the Scheme’s defined benefit obligation.
The Trustee and Company manage risks in the Scheme through the following strategies:
• Diversification: investments are well diversified, such that the failure of any single investment would not have a material impact on
the overall level of assets.
• Investment strategy: the Trustee is required to review its investment strategy on a regular basis.
• LDI: the Scheme invests in Liability Driven Investment (LDI) funds in order to control interest rate and inflation risks.
Torrent Railways Pension Scheme
The Group participates in a section of the multiemployer Railways Pension Scheme (the “Section”), a UK registered trust-based
pension scheme that provides defined benefits. Pension benefits are linked to the members’ final pensionable salaries and service at
their retirement (or date of leaving if earlier). The Trustee is responsible for running the Section in accordance with the Section’s
Trust Deed and Rules, which sets out their powers. The Trustee of the Scheme is required to act in the best interests of the
beneficiaries of the Scheme.
There are three categories of pension scheme members in the Section:
• Active members: currently employed by the Company and accruing pension benefits.
• Deferred members: former members of the Section not yet in receipt of pension.
• Pensioner members: in receipt of pension.
The defined benefit obligation is valued by projecting the best estimate of future benefit outgoings (allowing for future salary
increases for active members, revaluation to retirement for deferred members and annual pension increases for all members) and
then discounting to the balance sheet date. The majority of benefits receive increases linked to the CPI inflation. The valuation
method used is known as the Projected Unit Method. The approximate overall duration of the Section’s defined obligation as at
31 March 2024 was 15 years.
The Trustee is required to carry out an actuarial valuation every three years. The last actuarial valuation for the Section was
performed by the Scheme Actuary for the Trustee as at 31 December 2022. This valuation revealed a shortfall in the Section of
£10,000 on the Scheme Funding basis. The Company agreed to pay annual contributions of 20.9% pa of members’ section pay
prior to 30 June 2018, and 21.7% pa of members’ pensionable salaries from 1 July 2018; all subject to the Omnibus rate as defined
in the Rules. The Company expects to pay around £15,000 to the Section during the accounting year beginning 1 April 2024. The
difference between the actuarial valuation and the IAS 19 valuation is due to the same principles as described in the Vp plc details
above, albeit the last actuarial valuation was performed at 31 December 2022.
The last actuarial valuation for the Section was performed by the Scheme Actuary for the Trustee as at 31 December 2022.
This valuation revealed a surplus in the Section of £33,000 on the Scheme Funding basis. The Company agreed to pay annual
contributions of 20.9% pa of members’ section pay prior to 30 June 2018, and 21.7% pa of members’ pensionable salaries from
1 July 2018; all subject to the Omnibus rate as defined in the Rules. The difference between the actuarial valuation and the
IAS 19 valuation is due to the same principles as described in the Vp plc details above, albeit the last actuarial valuation was
performed at 31 December 2022.
133
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
Through the Section, the Company is exposed to a number of risks:
• Asset volatility: the Section’s defined benefit obligation is calculated using a discount rate set with reference to corporate bond
yields; however, the Section invests significantly in equities. These assets are expected to outperform corporate bonds in the long
term but provide volatility and risk in the short term.
• Changes in bond yields: a decrease in corporate bond yields would increase the Section’s defined benefit obligation; however, this
would be partially offset by an increase in the value of the Section’s assets.
• Inflation risk: a significant proportion of the Section’s defined benefit obligation is linked to inflation; therefore, higher inflation
will result in a higher defined benefit obligation (subject to the appropriate caps in place). The majority of the Section’s assets are
either unaffected by inflation, or only loosely correlated with inflation; therefore, an increase in inflation would also increase the
deficit.
• Life expectancy: if Section members live longer than expected, the Section’s benefits will need to be paid for longer, increasing
the Section’s defined benefit obligation.
The Trustee manages risks in the Section through the following strategies:
• Diversification: investments are well diversified, such that the failure of any single investment would not have a material impact on
the overall level of assets.
• Investment strategy: the Trustee is required to review the investment strategy on a regular basis.
All actuarial gains and losses are recognised in the year in which they occur in the Statement of Comprehensive Income.
Present value of net surplus
Group
Company
2024
£000
2023
£000
2024
£000
2023
£000
Present value of defined benefit obligation
(7,057)
(7,201)
(5,819)
(6,012)
Fair value of scheme assets
8,910
9,501
7,638
8,147
Present value of net surplus
1,853
2,300
1,819
2,135
The movement in the defined benefit surplus is as follows:
Group
2024
2023
Present
Fair
Present
Fair
value of
value of
value of
value of
obligation
assets
Total
obligation
assets
Total
£000
£000
£000
£000
£000
£000
At beginning of year
(7,201)
9,501
2,300
(9,531)
12,269
2,738
Service costs
(18)
–
(18)
(34)
–
(34)
Administrative expenses
–
(161)
(161)
–
(173)
(173)
Interest (cost)/income
(335)
441
106
(250)
322
72
Remeasurements
Actuarial losses: change in
demographic assumptions
144
–
144
–
–
–
Actuarial gains: change in financial
assumptions
(7)
–
(7)
2,199
–
2,199
Actuarial losses: experience differing
from that assumed
(130)
–
(130)
(131)
–
(131)
Actuarial losses: actual return on
assets
–
(398)
(398)
–
(2,387)
(2,387)
Contributions: employer
–
17
17
–
16
16
Contributions: employees
(8)
8
–
(7)
7
–
Benefits paid
498
(498)
–
553
(553)
–
(7,057)
8,910
1,853
(7,201)
9,501
2,300
26. Employee benefits continued
134
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
2024
2023
Company
Present
value of
obligation
£000
Fair
value of
assets
£000
Total
£000
Present
value of
obligation
£000
Fair
value of
assets
£000
Total
£000
At beginning of year
(6,012)
8,147
2,135
(7,706)
10,774
3,068
Administrative expenses
–
(150)
(150)
–
(158)
(158)
Interest (cost)/income
(278)
377
99
(201)
282
81
Remeasurements
Actuarial losses: change in
demographic assumptions
122
–
122
–
–
–
Actuarial gains: change in financial
assumptions
9
–
9
1,507
–
1,507
Actuarial gains: experience differing
from that assumed
(120)
–
(120)
(113)
–
(113)
Actuarial losses: actual return on
assets
–
(276)
(276)
–
(2,250)
(2,250)
Benefits paid
460
(460)
–
501
(501)
–
(5,819)
7,638
1,819
(6,012)
8,147
2,135
Expense/(income) recognised in the Income Statement
Group
Company
2024
£000
2023
£000
2024
£000
2023
£000
Service costs
18
34
–
–
Administrative expenses
161
173
150
158
Net interest
(106)
(72)
(99)
(81)
73
135
51
77
These expenses/(income) are recognised in the following line items in the Income Statement:
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Cost of sales
179
207
150
158
Administrative expenses
(106)
(72)
(99)
(81)
73
135
51
77
135
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
Group
Company
Amount recognised in other comprehensive income
2024
£000
2023
£000
2024
£000
2023
£000
Actuarial gains on defined benefit obligation
7
2,068
11
1,394
Actuarial loss on assets less interest
(398)
(2,387)
(276)
(2,250)
Amount recognised in other comprehensive income
(391)
(319)
(265)
(856)
Cumulative actuarial net gains/(losses) reported in the statement of comprehensive income since 1 April 2004, the transition
to adopted IFRSs, for the Group are a loss of £281,000 (2023: gain of £110,000) and Company loss of £975,000 (2023: loss of
£710,000).
Scheme assets and returns
The fair value of the scheme assets and the return on those assets were as follows:
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Fair value of assets
Diversified growth funds
4,336
4,043
4,336
4,043
Equities and other growth assets
536
555
–
–
Bonds and cash
2,006
3,055
1,270
2,256
Liability driven investments (LDI)
2,032
1,848
2,032
1,848
8,910
9,501
7,638
8,147
Returns
Actual return on scheme assets
42
(2,065)
100
(1,968)
None of the fair values of the assets shown above include any of the Company’s own financial instruments or any property occupied
by, or other assets used by, the Company. The Scheme invests in the “Matching Core” range of LDI funds provided by Legal &
General Investment Management (LGIM) (the Scheme’s investment manager). These are unit-linked, pooled investment vehicles,
with an unquoted unit price. The market value for the purposes of the financial statements was provided by LGIM and was the bid-
value of the funds at the accounting date.
Principal actuarial assumptions
The principal actuarial assumptions at the balance sheet date (expressed as weighted averages) are:
Group and Company
2024
2023
Inflation
3.5%
3.5%
Discount rate at 31 March
4.8%
4.8%
Expected future salary increases
2.0%
2.0%
Expected future pension increases
3.3%
3.4%
Revaluation of deferred pensions
3.0%
2.9%
26. Employee benefits continued
136
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Mortality rate assumptions adopted at 31 March 2024, based on S3PA CMI Model 2022, imply the following life expectations on
retirement at age 65 for:
2024
2023
Male currently aged 45
23 years
23 years
Female currently aged 45
25 years
26 years
Male currently aged 65
22 years
22 years
Female currently aged 65
24 years
24 years
History of schemes
The history of the schemes for the current and prior years is as follows:
Group
2024
2023
2022
2021
2020
£000
£000
£000
£000
£000
Present value of defined benefit obligation
(7,057)
(7,201)
(9,531)
(10,600)
(9,812)
Fair value of plan assets
8,910
9,501
12,269
12,775
12,830
Present value of net surplus
1,853
2,300
2,738
2,175
3,018
Company
2024
2023
2022
2021
2020
£000
£000
£000
£000
£000
Present value of defined benefit obligation
(5,819)
(6,012)
(7,706)
(8,737)
(8,312)
Fair value of plan assets
7,638
8,147
10,774
11,394
11,665
Present value of net surplus
1,819
2,135
3,068
2,657
3,353
(Losses)/gains recognised in statement of comprehensive
income
Group
2024
2023
2022
2021
2020
Difference between expected and actual return on
scheme assets:
– Amount (£000)
(398)
(2,387)
(98)
223
178
– Percentage of scheme assets
(4.5%)
(25.1%)
(0.8%)
1.7%
1.4%
Experience gains and losses arising on the scheme
liabilities:
– Amount (£000)
(130)
(131)
(11)
15
(8)
– Percentage of present value of scheme liabilities
(1.8%)
(1.8%)
(0.1%)
0.1%
(0.1%)
Effects of changes in the demographic and financial
assumptions underlying the present value of the
scheme liabilities:
– Amount (£000)
137
2,199
803
(1,033)
198
Percentage of present value of scheme liabilities
1.9%
30.5%
8.4%
(9.7%)
2.0%
Total amount recognised in statement of
comprehensive income:
Amount (£000)
(391)
(319)
693
(795)
368
Percentage of present value of scheme liabilities
(5.5%)
(4.4%)
7.3%
(7.5%)
3.8%
137
Vp plc Annual Report 2024
Strategic Report
Notes
(forming part of the financial statements) continued
Company
2024
2023
2022
2021
2020
Difference between expected and actual return on
scheme assets:
Amount (£000)
(276)
(2,250)
(202)
27
201
Percentage of scheme assets
(3.6%)
(27.6%)
(1.9%)
0.2%
1.7%
Experience gains and losses arising on the scheme
liabilities:
Amount (£000)
(120)
(113)
26
–
–
Percentage of present value of scheme liabilities
(2.1%)
(1.9%)
0.3%
0.0%
0.0%
Effects of changes in the demographic and financial
assumptions underlying the present value of the
scheme liabilities:
Amount (£000)
131
1,507
679
(708)
33
Percentage of present value of scheme liabilities
2.3%
25.1%
8.8%
(8.1%)
0.4%
Total amount recognised in statement of
comprehensive income:
Amount (£000)
(265)
(856)
503
(681)
234
Percentage of present value of scheme liabilities
(4.6%)
(14.2%)
6.5%
(7.8%)
2.8%
Sensitivity analysis
The sensitivity of the net pension asset/obligation to assumptions is set out below:
Vp plc scheme
2024
2023
Assumption
Change in
assumption
Change in
defined
benefit
obligation
Change in
assumption
Change in
defined
benefit
obligation
Discount rate
+/- 0.5% p.a.
-4%/+5%
+/- 0.5% p.a.
-4%/+5%
RPI inflation
+/- 0.5% p.a.
+1%/-1%
+/- 0.5% p.a.
+1%/-1%
Assumed life expectancy
+ 1 year
+4%
+ 1 year
+4%
Torrent Railways scheme
2024
2023
Assumption
Change in
assumption
Change in
defined
benefit
obligation
Change in
assumption
Change in
defined
benefit
obligation
Discount rate
+/- 0.5% p.a.
-7%/+8%
+/- 0.5% p.a.
-7%/+8%
CPI inflation
+/- 0.5% p.a.
+7%/-6%
+/- 0.5% p.a.
+6%/-6%
Future salary increase
+/- 0.5% p.a.
+1%/-1%
+/- 0.5% p.a.
+2%/-2%
Assumed life expectancy
+ 1 year
+3%
+ 1 year
+2%
These calculations provide an approximate guide to the sensitivity of the results and may not be as accurate as a full valuation
carried out on these assumptions. Each assumption change is considered in isolation, which, in practice, is unlikely to occur, as
changes in some of the assumptions are correlated.
Defined contribution plans
The Group also operates defined contribution schemes for other eligible employees, the main schemes being the Vp money
purchase scheme and the Legal and General Stakeholder Scheme. The assets of the schemes are held separately from those of
the Group. The pension cost represents contributions payable by the Group and amounted to £2,386,000 (2023: £2,310,000) in
the year.
26. Employee benefits continued
138
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
27. Related parties
Material transactions with key management (being the Directors of the Group) mainly constitute remuneration including share-
based payments, details of which are included in the remuneration report on pages 70 to 76 and in note 6 to the Financial
Statements.
Trading transactions with subsidiaries – Group
Transactions between the Company and the Group’s subsidiaries, which are related parties, have been eliminated on consolidation
and are, therefore, not disclosed.
Trading transactions with subsidiaries – Parent Company
The Company enters into transactions with its subsidiary undertakings in respect of the following:
• Internal funding loans - refer to notes 14 and 18
• Provision of Group services (including Senior Management, IT, Group Finance, Group HR, Group Properties and Shared Service
Centre).
• Rehire of equipment on commercial terms - refer to note 2
Recharges are made for Group services based on the utilisation of those services. In addition to these services, the Company acts
as a buying agent for certain Group purchases, such as insurance and IT services. These are recharged based on utilisation by the
subsidiary undertaking.
The amount outstanding from subsidiary undertakings to the Company at 31 March 2024 totalled £88,094,000 (2023: £65,349,000).
Amounts owed to subsidiary undertakings by the Company at 31 March 2024 totalled £64,562,000 (2023: £54,857,000).
The Company and certain subsidiary undertakings has entered into cross guarantees of bank loans, private placement loans and
overdrafts to the Company. The total value of such borrowings at 31 March 2024 was £132.0 million (2023: £146.0 million).
28. Contingent liabilities
In an international Group a variety of claims arise from time to time in the normal course of business. Such claims may arise due
to matters concerning suppliers or customers, actions being taken against Group companies as a result of investigations by fiscal
authorities or under regulatory requirements. Provision has been made in these consolidated financial statements against any claims
which the Directors consider are likely to result in significant liabilities or required under accounting standard IAS 37.
29. Ultimate Parent Company
The Company is an immediate subsidiary undertaking of Ackers P Investment Company Limited, which is the ultimate Parent
Company incorporated in United Kingdom and registered at Central House, Beckwith Knowle, Otley Road, Harrogate HG3 1UD.
Consolidated accounts are prepared for this company, being the largest group into which the results of this Group are consolidated,
and are available from the registered office address. Ackers P Investment Company Limited is, ultimately, controlled by a number
of Trusts of which, for the purposes of Sections 252 to 255 of the Companies Act 2006, Jeremy Pilkington is deemed to be a
connected person.
139
Vp plc Annual Report 2024
Strategic Report
30. Subsidiary undertakings
The investments in trading subsidiary undertakings as at 31 March 2024 and 31 March 2023 are:
Country of
registration or
incorporation
Principal Activity
Country of
principal
operation
Class and percentage
of shares held
Torrent Trackside Limited
England
Rail equipment hire
UK
Ordinary shares 100%
Hire Station Limited
England
Tool hire
UK
Ordinary shares 100%
Airpac Rentals Pte Limited
Singapore
Oilfield services
Singapore
Ordinary shares 100%
Airpac Bukom Oilfield Services
(Curacao) NVA*
Curacao
Oilfield services
Curacao
Ordinary shares 100%
Airpac Bukom Oilfield Services Middle
East FZE
Sharjah
Oilfield services
Sharjah
Ordinary shares 100%
Airpac Rentals (Australia) Pty Limited Australia
Oilfield services
Australia
Ordinary shares 100%
Airpac Rentals Holdco Limited**
England
Oilfield services
UK
Ordinary shares 100%
Airpac Rentals UK Limited**
England
Oilfield services
UK
Ordinary shares 100%
Vp GmbH
Germany
Equipment hire
Germany
Ordinary shares 100%
Vp Equipment Rental (Ireland) Limited Ireland
Equipment hire
Ireland
Ordinary shares 100%
Vp Equipment Rental Pty Limited
Australia
Holding company
Australia
Ordinary shares 100%
TR Pty Limited
Australia
Equipment hire
Australia
Ordinary shares 100%
Tech Rentals (Malaysia) SDN BHD
Malaysia
Equipment hire
Malaysia
Ordinary shares 100%
TR TechRentals Pte Limited**
Singapore
Equipment hire
Singapore
Ordinary shares 100%
Vidcom New Zealand Limited
New Zealand
Equipment hire
New Zealand
Ordinary shares 100%
The full list of the dormant subsidiary undertakings is:
Country of
registration or
incorporation
Principal activity
Country of
principal
operation
Class and percentage
of shares held
Stoppers Specialists Limited
England
Dormant
N/A
Ordinary shares 100%
Trench Shore Limited
England
Dormant
N/A
Ordinary shares 100%
Vibroplant Investments Limited*
England
Dormant
N/A
Ordinary shares 100%
Bukom General Oilfield Services Limited* England
Dormant
N/A
Ordinary shares 100%
Fred Pilkington & Son Limited
England
Dormant
N/A
Ordinary shares 100%
Domindo Tool Hire Limited*
England
Dormant
N/A
Ordinary shares 100%
Instant Tool Hire Limited*
England
Dormant
N/A
Ordinary shares 100%
The Handi Hire Group Limited*
England
Dormant
N/A
Ordinary shares 100%
Hire & Sales (Canterbury) Limited*
England
Dormant
N/A
Ordinary shares 100%
Vibroplant Trustees Limited
England
Dormant
N/A
Ordinary shares 100%
UM (Holdings) Limited*
England
Dormant
N/A
Ordinary shares 100%
U-Mole Limited*
England
Dormant
N/A
Ordinary shares 100%
727 Plant Limited*
England
Dormant
N/A
Ordinary shares 100%
Cannon Tool Hire Limited*
England
Dormant
N/A
Ordinary shares 100%
M.E.P. Hire Limited
Scotland
Dormant
N/A
Ordinary shares 100%
Arcotherm (UK) Limited
England
Dormant
N/A
Ordinary shares 100%
Vibroplant Limited
England
Dormant
N/A
Ordinary shares 100%
Notes
(forming part of the financial statements) continued
* During the year Airpac Bukom Oilfield Services (Curacao) NVA was dissolved.
** During the year Airpac Rentals Holdco Limited, Airpac Rentals UK Limited and TR TechRentals Pte Limited were incorporated.
140
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Country of
registration or
incorporation
Principal activity
Country of
principal
operation
Class and percentage
of shares held
Mr Cropper Limited
England
Dormant
N/A
Ordinary shares 100%
Direct Instrument Hire Limited*
England
Dormant
N/A
Ordinary shares 100%
Test & Measurement Hire Group Limited England
Dormant
N/A
Ordinary shares 100%
Test & Measurement Hire Limited
England
Dormant
N/A
Ordinary shares 100%
Higher Access Limited
England
Dormant
N/A
Ordinary shares 100%
Zenith Survey Equipment Limited
England
Dormant
N/A
Ordinary shares 100%
Survey Connection Scotland Limited
England
Dormant
N/A
Ordinary shares 100%
Brandon Hire Group Limited
England
Dormant
N/A
Ordinary shares 100%
Brandon Hire Group Holdings Limited
England
Dormant
N/A
Ordinary shares 100%
Brandon Hire Limited
England
Dormant
N/A
Ordinary shares 100%
FNPR Holdings Limited
England
Dormant
N/A
Ordinary shares 100%
First National Plant Rental Limited
England
Dormant
N/A
Ordinary shares 100%
TPA Portable Roadways Limited
England
Dormant
N/A
Ordinary shares 100%
Sandhurst Limited
England
Dormant
N/A
Ordinary shares 100%
M. & S. Hire Limited
England
Dormant
N/A
Ordinary shares 100%
During the year, applications have been made to dissolve the companies marked with a *
The registered offices of the companies are:
Country of Registration
Registered Office Address
England
Central House, Beckwith Knowle, Otley Road, Harrogate HG3 1UD
Scotland
Tofthills Avenue, Midmill Business Park, Kintore, Aberdeenshire AB51 0QP
Singapore
9 Pioneer Sector 2, Singapore 628371
Sharjah
SAIF Office P8-13-10, PO Box 121378, Sharjah, United Arab Emirates
Australia
18 Joseph Street, Blackburn North, Victoria 3130
Germany
Lurgiallee 6-8, 60439 Frankfurt
Ireland
70 Sir John Rogerson’s Quay, Dublin 2
Malaysia
Wisma Goshen, 2nd Floor, 60 & 62 Jalan SS22/21, Damansara Jaya, 47400 Petaling Ja-ya, Selangor
Dami Ehsan
New Zealand
27 Exmouth Street, Eden Terrace, Auckland 101
The subsidiary companies listed below are exempt from the requirements of Companies’ Act 2006 relating to the audit of individual
accounts by virtue of section 479A of Companies’ Act 2006.
Company
Registered number
Torrent Trackside Limited
01132882
Vibroplant Limited
02644935
141
Vp plc Annual Report 2024
Strategic Report
Five-year summary
2020
2021
2022
2023
2024
£000
£000
£000
£000
£000
Revenue
362,927
307,997
350,915
371,519
368,691
Operating profit before amortisation, impairment of
intangible assets and exceptional items
55,480
30,928
46,299
48,775
50,352
Profit before amortisation, impairment of intangible
assets, taxation and exceptional items
46,640
23,176
38,946
40,206
40,717
Profit before tax
28,366
(2,269)
35,644
30,706
2,846
Tax
(9,779)
(2,332)
(10,109)
(7,696)
(8,137)
Profit/(loss) after tax
18,587
(4,601)
25,535
23,010
(5,291)
Dividends*
(12,055)
(8,674)
(14,054)
(14,471)
(14,997)
Share capital
2,008
2,008
2,008
2,008
2,008
Capital redemption reserve
301
301
301
301
301
Reserves
167,585
150,781
164,276
172,623
150,711
Total equity before non-controlling interest
169,894
153,090
166,585
174,932
153,020
Share statistics
Asset value
423p
381p
415p
436p
381p
Earnings (pre amortisation)
90.21p
46.56p
71.24p
78.41p
75.10p
Dividend**
30.45p
25.00p
36.0p
37.5p
39.0p
Times covered (pre amortisation)
3.0
1.9
2.0
2.1
1.9
* Dividends under IFRS relate only to dividends declared in that year
** Dividends per share statistics are the dividends related to that year whether paid or proposed. The special dividend of 22.00 pence per share declared on
17 January 2021 is in relation to the financial year-ended 31 March 2020
142
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Alternative performance measures
The Board monitors performance, principally, through adjusted and like-for-like performance measures or Alternative Performance
Measures (APMs). Adjusted profit and earnings per share measures exclude certain items, including the impact of IFRS 16,
amortisation of acquired intangible assets and goodwill impairment charges and exceptional items.
The Board believes that such alternative measures are useful as they exclude one-off (amortisation, impairment of intangible assets
and exceptional items) and non-cash (amortisation of intangible assets) items, which are normally disregarded by investors, analysts
and brokers in gaining a clearer understanding of the underlying performance of the Group from one year to the next when making
investment and other decisions. Equally, IFRS 16 is excluded from measures used by these same stakeholders and so is removed from
certain APMs.
The key measures used as APMs are reconciled below.
2024
2023
£000
£000
Profit before tax as per the Income Statement
2,846
30,706
Adjustment to remove IFRS 16 impact
(154)
283
Adjusted profit before tax APM
2,692
30,989
Amortisation and impairment of goodwill, trade names and customer relationships
31,198
4,490
Exceptional items
5,817
5,010
Adjusted profit before tax, amortisation, impairment of intangible assets and
exceptional items APM (PBTAE)
39,707
40,489
Interest (excluding interest on lease liabilities)
6,319
5,542
Adjusted operating profit before amortisation, impairment of intangible assets
and exceptional items APM
46,026
46,031
Depreciation (excluding depreciation of right-of-use assets)
44,994
46,853
Adjusted EBITDA APM
91,020
92,884
Adjusted PBTAE and adjusted operating profit exclude amortisation and impairment of goodwill, trade names and customer
relationships but include amortisation of software of £856,000 in 2024 (2023: nil).
Adjusted operating margin is calculated by dividing adjusted operating profit before amortisation, impairment of intangible assets
and exceptional items by revenue.
2024
2023
Pence
Pence
Basic earnings per share
(13.4)
58.1
Impact of amortisation, impairment of intangible assets and exceptional items after tax
88.5
20.3
Impact of IFRS 16
(0.3)
0.6
Adjusted basic earnings per share APM
74.8
79.0
2024
2023
£000
£000
Net debt including lease liabilities
187,180
192,886
Lease liabilities
(61,961)
(58,518)
Net debt excluding lease liabilities APM
125,219
134,368
Return on Average Capital Employed (ROACE) of 14.5% (2023: 14.4%) is based on adjusted operating profit before amortisation and
exceptional items as defined above, divided by average capital employed on a monthly basis using the management accounts.
143
Vp plc Annual Report 2024
Strategic Report
Directors and advisers
Executive Directors
Jeremy F G Pilkington, B.A. Hons. (Chairman)
Neil A Stothard, M.A., F.C.A. (resigned 30 September 2023)
Anna C Bielby, F.C.A.
Keith J Winstanley PhD, B.S.C, F.C.A (appointed 1 January 2024)
Non-Executive Directors
Stuart Watson, B.A, F.C.A.
Mark Bottomley, B.S.C, F.C.A.
Philip M White, B.Com, F.C.A, CBE
Company Secretary
Sarah (Sally) E Jones (appointed 19 September 2023)
Registered Office
Central House, Beckwith Knowle, Otley Road, Harrogate, North Yorkshire, HG3 1UD
Registered in England and Wales: No 481833
Telephone: 01423 533400
Independent Auditors
PricewaterhouseCoopers LLP
Central Square, 29 Wellington Street, Leeds, LS1 4DL
Lawyers
Squire Patton Boggs (UK) LLP
6 Wellington Place, Leeds LS1 4AP
Registrars and Transfer Office
Link Group, Central Square, 29 Wellington Street, Leeds S1 4DL
Bankers
HSBC Bank Plc
Lloyds Bank Plc
Bank of Ireland
Investment Bankers
N M Rothschild & Sons Limited
Brokers
Singers Capital Markets
Berenberg
Public Relations
Buchanan Communications
144
Vp plc Annual Report 2024
Corporate Governance
Financial Statements
Printed on carbon balanced and 100% recycled paper
Strategic Report
Head Office
Vp plc
Central House
Beckwith Knowle
Otley Road
Harrogate
North Yorkshire
HG3 1UD
Telephone: 01423 533 400