Interim Results

RNS Number : 5376I

Vp PLC

27 November 2018

 

 

 

 

 

Press Release

27 November 2018

 

Vp plc

('Vp' or the 'Group')

 

Interim Results

 

Vp plc, the equipment rental specialist, today announces its Interim Results for the six months ended 30 September 2018 ('H1 2019' or the 'period').

Highlights

·	Profit before tax and amortisation increased 22% to £25.9 million (H1 2018: £21.2 million)
·	Revenues up by 42% to £193.2 million (H1 2018: £136.0 million)
·	EPS, pre amortisation, increased 18% to 52.3 pence per share (H1 2018: 44.2 pence per share)
·	Interim dividend increased by 21% to 8.2 pence per share (H1 2018: 6.8 pence per share)
·	Return on average capital employed 14.5% (H1 2018: 16.0%)
·	EBITDA increased by 25% to £51.6 million (H1 2018: £41.1million)
·	Capital investment in rental fleet up 13% at £36.7 million (H1 2018: £32.5 million)
·	Statutory profit before tax of £23.9 million (H1 2018: £20.3 million) and statutory earnings per share of 48.3 pence (H1 2018: 42.5 pence)

Jeremy Pilkington, Chairman of Vp plc, commented: "The Group has produced yet another excellent set of results with revenues, profits and earnings per share all significantly ahead.  Both our UK and International Divisions have performed strongly with most of our business units busy supporting stable end markets.  In the UK Division, whilst Brexit continues to be a distraction, day to day activity seems to be continuing largely unaffected.

With the benefit of a strong first half, which includes an in line contribution from Brandon Hire, we look forward to the remainder of the year, and beyond, with every confidence."

- Ends -

For further information:

Vp plc
Jeremy Pilkington, Chairman		Tel: [phone]
Neil Stothard, Chief Executive		www.vpplc.com
Allison Bainbridge, Group Finance Director
Media enquiries:
Buchanan
Henry Harrison-Topham / Jamie Hooper / Maddie Seacombe		Tel: [phone]
[e-mail]	www.buchanan.uk.com

Notes on alternative performance measures:

·      All performance measures stated as before amortisation are also before impairment of intangibles.

·      Basic earnings per share pre amortisation and exceptionals is reconciled to basic earnings per share in note 7.

·      Profit before tax, amortisation and exceptionals is reconciled to profit before tax in the Income Statement.

·      Return on average capital employed is based on profit before tax, interest, amortisation and exceptionals divided by average capital employed on a monthly basis using the management accounts. Profit before tax, interest, amortisation and exceptionals is reconciled to profit before interest and tax in the Income Statement.

CHAIRMAN'S STATEMENT

I am very pleased to report further significant progress for the Group in the six month period to 30 September 2018.

Profit before tax and amortisation rose by 22% to £25.9 million (H1 2018: £21.2 million) on revenues that were 42% higher at £193.2 million (H1 2018: £136.0 million).  These results include a maiden first half year contribution from Brandon Hire ('Brandon') which the Group acquired in November 2017.  Earnings per share pre-amortisation increased by 18% to 52.3 pence per share (H1 2018: 44.2 pence per share).  As expected, return on average capital employed ('ROACE') softened slightly, to a still extremely satisfactory 14.5% (H1 2018: 16.0%) reflecting the temporary effect of the Brandon acquisition.  Excluding this acquisition, the underlying ROACE remained above 16%.

Capital investment in fleet rose to £36.7 million (H1 2018: £32.5 million).  Borrowings at the period end stood at £188.2 million (31 March 2018: £179.2 million).  EBITDA increased to £51.6 million (H1 2018: £41.1 million) demonstrating the quality of the Group's cash flow.

In view of this excellent set of results, the Board is pleased to declare a 21% increase in the interim dividend to 8.2 pence per share (H1 2018: 6.8 pence per share) payable on 11 January 2019 to shareholders on the register as at 7 December 2018.

UK Division

The UK Division delivered a strong first half with operating profits before amortisation 21% ahead at £26.9 million (H1 2018: £22.2 million) on revenues up 46% at £175.3 million (H1 2018:  £120.3 million), including a £39.4 million contribution from Brandon.

The division experienced continued strong demand from its rail, transmission and water infrastructure markets benefitting our Groundforce, TPA and Torrent Trackside businesses.  Residential construction remained supportive and enhanced by significant customer wins for UK Forks.  The general UK construction market remained broadly supportive to our specialist tool hire division.

Twelve months after the acquisition we are pleased to report good progress at Brandon Hire, which is now integrated with the Hire Station tool hire business and is performing in line with the Board's expectations.  We expect full integration to be completed within 12 months.

International Division

Operating profits before amortisation moved ahead in the period to £1.3 million (H1 2018: £0.3 million) on revenues ahead by 14% at £17.9 million (H1 2018: £15.7 million).

These results reflect a further good performance from TR including encouraging progress from the newer locations in Malaysia and Singapore.

Airpac Bukom benefitted from marginally improved activity in the oil and gas market including a good contribution from our European operations.  Several LNG contracts in Australia completed in the period and we have had some success in replacing this work with alternative revenue streams across the Asia Pacific region.

Outlook

The Group has produced yet another excellent set of results with revenues, profits and earnings per share all significantly ahead.  Both our UK and International Divisions have performed strongly with most of our business units busy supporting stable end markets.  In the UK Division, whilst Brexit continues to be a distraction, day to day activity seems to be continuing largely unaffected.

With the benefit of a strong first half, which includes an in line contribution from Brandon Hire, we look forward to the remainder of the year, and beyond, with every confidence.

Jeremy Pilkington

Chairman

27 November 2018

 

Condensed Consolidated Income Statement

For the period ended 30 September 2018

	Note	Six months to 30 Sep 2018		Six months to 30 Sep 2017		Full year to 31 Mar 2018
		(unaudited)		(unaudited)		(audited)
		£000		£000		£000
Revenue	3	193,211		135,992		303,639
Cost of sales		(146,101)		(98,083)		(229,477)
Gross profit		47,110		37,909		74,162
Administrative expenses		(20,917)		(16,315)		(39,927)
Operating profit	3	26,193		21,594		34,235
Net financial expenses		(2,325)		(1,284)		(3,421)
Profit before exceptionals, amortisation and taxation		25,853		21,155		40,597
Amortisation and impairment		(1,985)		(845)		(8,101)
Exceptional items		-		-		(1,682)
Profit before taxation		23,868		20,310		30,814
Income tax expense	4	(4,752)		(3,602)		(6,448)
Net profit for the period		19,116		16,708		24,366
Basic earnings per share	7	48.26p		42.49p		61.72p
Diluted earnings per share	7	46.38p		41.21p		60.95p
Dividend per share	8	8.20p		6.80p		26.00p

Condensed Consolidated Statement of Comprehensive Income

For the period ended 30 September 2018

	Six months to		Six months to		Full year to
	30 Sep 2018		30 Sep 2017		31 Mar 2018
	(unaudited)		(unaudited)		(audited)
	£000		£000		£000
Profit for the period	19,116		16,708		24,366
Other comprehensive income:
Items that will not be reclassified to profit or loss Actuarial gains on defined benefit pension scheme	-		-		275
Tax on items taken direct to equity	-		-		(50)
Impact of tax rate change	-		-		(65)
Items that may be subsequently reclassified to profit or loss
Foreign exchange translation difference	667		(264)		(900)
Effective portion of changes in fair value of cash flow hedges	(194)		356		444
Other comprehensive income/(expense)	473		92		(296)
Total comprehensive income for the period	19,589		16,800		24,070

Condensed Consolidated Statement of Changes in Equity

For the period ended 30 September 2018

	Six months to		Six months to		Full year to
	30 Sep 2018		30 Sep 2017		31 Mar 2018
	(unaudited)		(unaudited)		(audited)
	£000		£000		£000
Total comprehensive income for the period	19,589		16,800		24,070
Tax movements to equity	1,060		172		444
Impact of tax rate change	-		(20)		(25)
Share option charge in the period	1,339		1,158		2,446
Net movement relating to shares held by Vp Employee Trust	(2,029)		(920)		(822)
Dividends to shareholders	(7,606)		(6,286)		(8,983)
Change in equity during the period	12,353		10,904		17,130
Equity at the start of the period	154,446		137,316		137,316
Equity at the end of the period	166,799		148,220		154,446

There were no movements in issued share capital, the capital redemption reserve or share premium in the reported periods.

Condensed Consolidated Balance Sheet

At 30 September 2018

	Note	30 Sep 2018		31 Mar 2018		30 Sep 2017
		(unaudited)		(audited)		(unaudited)
		£000		£000		£000
Non-current assets
Property, plant and equipment	5	251,882		241,938		211,805
Goodwill	6	60,546		60,355		41,380
Intangible assets	6	29,167		31,122		8,689
Employee benefits		2,230		2,230		1,928
Total non-current assets		343,825		335,645		263,802
Current assets
Inventories		8,017		8,662		6,328
Trade and other receivables		82,377		70,915		57,040
Cash and cash equivalents	9	15,508		18,194		17,129
Total current assets		105,902		97,771		80,497
Total assets		449,727		433,416		344,299
Current liabilities
Interest bearing loans and borrowings	9	(7,784)		(10,218)		(8,924)
Income tax payable		(3,447)		(2,365)		(3,001)
Trade and other payables		(67,238)		(69,899)		(53,892)
Total current liabilities		(78,469)		(82,482)		(65,817)
Non-current liabilities
Interest bearing loans and borrowings	9	(195,960)		(187,148)		(123,596)
Deferred tax liabilities		(8,499)		(9,340)		(6,666)
Total non-current liabilities		(204,459)		(196,488)		(130,262)
Total liabilities		(282,928)		(278,970)		(196,079)
Net assets		166,799		154,446		148,220
Equity
Issued share capital		2,008		2,008		2,008
Capital redemption reserve		301		301		301
Share premium		16,192		16,192		16,192
Foreign currency translation reserve		380		(287)		349
Hedging reserve		97		291		203
Retained earnings		147,794		135,914		129,140
Total equity attributable to equity holders of parent		166,772		154,419		148,193
Non-controlling interest		27		27		27
Total equity		166,799		154,446		148,220

Condensed Consolidated Statement of Cash Flows

For the period ended 30 September 2018

	Note	Six months to		Six months to		Full year to
		30 Sep 2018		30 Sep 2017		31 Mar 2018
		(unaudited)		(unaudited)		(audited)
		£000		£000		£000
Cash flows from operating activities Profit before taxation		23,868		20,310		30,814
Adjustment for:
Share based payment charges		1,339		1,158		2,446
Depreciation	5	23,451		18,659		40,319
Amortisation and impairment of intangibles		1,985		845		8,101
Net financial expense		2,325		1,284		3,421
Profit on sale of property, plant and equipment		(3,084)		(3,229)		(6,095)
Operating cash flow before changes in working capital and provisions		49,884		39,027		79,006
Decrease/(increase) in inventories		617		(177)		(1,049)
Increase in trade and other receivables		(11,462)		(5,483)		(6,225)
(Decrease)/increase in trade and other payables		(3,560)		(4,796)		1,907
Cash generated from operations		35,479		28,571		73,639
Interest paid		(2,336)		(1,192)		(3,190)
Interest element of finance lease rental payments		(117)		(90)		(213)
Interest received		91		6		75
Income tax paid		(3,451)		(2,663)		(7,014)
Net cash flows from operating activities		29,666		24,632		63,297
Cash flows from investing activities
Proceeds from sale of property, plant and equipment		9,850		8,694		18,518
Purchase of property, plant and equipment		(39,194)		(32,646)		(71,571)
Acquisition of businesses and subsidiaries (net of cash and overdrafts)		-		(8,185)		(49,660)
Net cash flows used in investing activities		(29,344)		(32,137)		(102,713)
Cash flows from financing activities
Purchase of own shares by Employee Trust		(2,029)		(920)		(822)
Repayment of loans		-		(77)		(29,036)
New loans		9,000		15,000		79,000
New finance leases		108		-		348
Payment of hire purchase and finance lease liabilities		(880)		(551)		(1,275)
Dividends paid	8	(7,606)		(6,286)		(8,983)
Net cash flows (used in)/from financing activities		(1,407)		7,166		39,232
Net decrease in cash and cash equivalents		(1,085)		(339)		(184)
Effect of exchange rate fluctuations on cash held		249		(160)		(395)
Cash and cash equivalents at beginning of period		9,503		10,082		10,082
Cash and cash equivalents at end of period	9	8,667		9,583		9,503

Notes to the Condensed Financial Statements

1.            Basis of Preparation

Vp plc (the "Company") is incorporated and domiciled in the United Kingdom.  The Condensed Consolidated Interim Financial Statements of the Company for the half year ended 30 September 2018 consolidate the financial information of the Company and its subsidiaries (together referred to as the "Group").

This interim announcement has been prepared in accordance with the Disclosure and Transparency Rules of the UK Financial Services Authority and the requirements of IAS34 ("Interim Financial Reporting") as adopted by the EU.  With the exception of the new standards below, the accounting policies applied are consistent for all periods presented and are in line with those applied in the annual financial statements for the year ended 31 March 2018, which were prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU.

New accounting standards became applicable for the current reporting period and the Group changed its accounting policies as a result of adopting the following standards: IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers.  The impact of the adoption of these standards and the new accounting policies are disclosed in note 11.

In addition, the group is in the process of reviewing IFRS 16 Leases.  It will result in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases is removed.  Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised.  The only exceptions are short-term and low-value leases.  The accounting for lessors will not significantly change.  The Group has not yet determined to what extent the new standard will result in the recognition of an asset and a liability for future payments and how this will affect the Group's profit and classification of cash flows.  The standard is mandatory for first interim periods within annual reporting periods beginning on or after 1 January 2019.  The Group does not intend to adopt the standard before its effective date.

The interim announcement was approved by the Board of Directors on 26 November 2018.

The Condensed Consolidated Interim Financial Statements do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.

The comparative figures for the financial year ended 31 March 2018 are extracted from the Company's statutory accounts for that financial year.  Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies.

The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense.  Actual results may differ from these estimates.  In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 March 2018 except as described in note 11.

The Group continues to be in a healthy financial position with total banking facilities at the period end of £207.5 million, including an overdraft facility.  Since the year end net debt has increased by £9.0 million to £188.2 million.  The Board has evaluated the banking facilities and the associated covenants on the basis of current forecasts, taking into account the current economic climate and an appropriate level of sensitivity analysis.  Having reassessed the principal risks the Directors consider it appropriate to adopt the going concern basis of accounting in preparing the interim financial information.

2.            Risks and Uncertainties

The principal risks and uncertainties facing the Group and the ways in which they are mitigated are described on page 18 and 19 of the 31 March 2018 Annual Report and Accounts.  The principal risks and uncertainties are market risk, competition, investment / product management, people, safety, financial risks and contractual risk.  These risks and uncertainties remain the same for this interim financial report.

3.            Summarised Segmental Analysis

		Revenue						Operating Profit Before Amortisation
	Sept 2018			Sept 2017		Mar 2018		Sept 2018	Sept 2017	Mar 2018
	£000			£000		£000		£000	£000	£000
UK	175,338			120,299		271,989		26,912	22,178	43,001
International	17,873			15,693		31,650		1,266	261	1,017
	193,211			135,992		303,639		28,178	22,439	44,018
Amortisation								(1,985)	(845)	(8,101)
Exceptional items								-	-	(1,682)
Operating Profit								26,193	21,594	34,235

Net Assets

	Assets						Liabilities
	Sept 18		Mar 18		Sept 17		Sept 18		Mar 18		Sept 17
	£000		£000		£000		£000		£000		£000
UK	410,368		396,608		300,825		276,787		274,505		192,357
International	39,359		36,808		43,474		6,141		4,465		3,722
	449,727		433,416		344,299		282,928		278,970		196,079

		Net Assets
		Sept 18		Mar 18		Sept 17
		£000		£000		£000
UK		133,581		122,103		108,468
International		33,218		32,343		39,752
		166,799		154,446		148,220

4.            Income Tax

The effective tax rate is 19.9% in the period to 30 September 2018 (H1 2018: 17.7%).  The effective rate for the period reflects the current standard tax rate of 19% (H1 2018: 19%), as adjusted for estimated permanent differences for tax purposes offset by gains covered by exemptions.  This is the best estimate of the weighted average annual income tax rate expected for the full financial year.

5.            Property, Plant and Equipment

	Sept 2018	Mar 2018	Sept 2017
	£000	£000	£000
Opening carrying amount	241,938	195,569	195,569
Additions	39,935	71,412	34,929
Acquisitions	(115)	28,337	5,549
Depreciation	(23,451)	(40,319)	(18,659)
Disposals	(6,766)	(12,423)	(5,465)
Effect of movements in exchange rates	341	(638)	(118)
Closing carrying amount	251,882	241,938	211,805

The value of capital commitments at 30 September 2018 was £13,803,000 (31 March 2018 £8,349,000).

6.            Business Combinations

As previously disclosed, the Group acquired Brandon Hire during the year ended 31 March 2018.  During the measurement period, the fair value of the assets acquired and liabilities assumed are provisional while management finalise the fair value assessment.

There were no acquisitions in the interim period.

7.            Earnings Per Share

Earnings per share have been calculated on 39,608,968 shares (H1 2018: 39,319,346 shares) being the weighted average number of shares in issue during the period.  Diluted earnings per share have been calculated on 41,215,948 shares (H1 2018: 40,546,052 shares) adjusted to reflect conversion of all potentially dilutive ordinary shares.  Basic earnings per share before the amortisation of intangibles was 52.32 pence (H1 2018: 44.23 pence) and was based on an after tax add back of £1,608,000 (H1 2018: £684,000) in respect of the amortisation of intangibles.  Diluted earnings per share before amortisation of intangibles was 50.28 pence (H1 2018: 42.90 pence).

8.            Dividends

The Directors have declared an interim dividend of 8.20 pence (H1 2018: 6.80 pence) per share payable on 11 January 2019 to shareholders on the register at 7 December 2018.  The dividend declared will absorb an estimated £3,247,000 (H1 2018: £2,697,000) of shareholders funds.  The dividend proposed at the year-end was subsequently approved at the AGM in August 2018 and £7,606,000 was paid in the period (H1 2018: £6,286,000 was paid).  The cost of dividends in the Statement of Changes in Equity is after adjustments for the interim and final dividends waived by the Vp Employee Trust in relation to the shares it holds for the Group's share option schemes.

9.            Analysis of Net Debt

		As at			Cash		As at
		1 Apr 18			Flow		30 Sep 18
		£000			£000		£000
Cash and cash equivalents		18,194			(2,686)		15,508
Bank overdraft		(8,691)			1,850		(6,841)
Revolving credit facilities / loans		(186,000)			(9,000)		(195,000)
Finance leases and hire purchases		(2,675)			772		(1,903)
		(179,172)			(9,064)		(188,236)

The Group's committed revolving credit bank facilities comprise a £65 million facility which expires in May 2020 and a £135 million facility which expires in December 2021, together with overdraft facilities totalling £7.5 million.

10.          Related Party Transactions

Transactions between Group Companies, which are related parties, have been eliminated on consolidation and therefore do not require disclosure.  The Group has not entered into any other related party transactions in the period which require disclosure in this interim statement.

11.          Changes in Accounting Policies

This note explains the impact of the adoption of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers on the Group's consolidated financial statements.

(a)  IFRS 9 Financial Instruments

IFRS 9 replaces IAS 39 relating to the recognition, classification and measurement of financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and hedge accounting.  The adoption of IFRS 9 from 1 April 2018 primarily resulted in changes in the Group's accounting policy for impairment of financial assets.  In accordance with the transitional provisions in IFRS 9, comparative figures have not been restated.  In addition, the impact of IFRS 9 has not been adjusted within opening reserves due to the revised policy having an immaterial difference of £0.1 million as at 31 March 2018.

The Group was required to revise its impairment methodology under IFRS 9 for trade receivables.  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 allowances for trade receivables are 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.

(b)  IFRS 15 Revenue from Contracts with Customers

The Group adopted IFRS 15 from 1 April 2018 which did not result in significant changes to the Group's accounting policies and had no impact to the amounts recognised in the consolidated financial statements.  Below summarises the disaggregation of revenue from contracts with customers from the total revenue disclosed in the Condensed Consolidated Income Statement:

	Sept 2018	Sept 2017	Mar 2018
	£000	£000	£000
Equipment hire	146,070	105,482	234,735
Services	30,680	20,854	44,260
Sales of goods	16,461	9,656	24,644
Total revenue	193,211	135,992	303,639

(i)          Equipment hire - Revenue from equipment hire, which is the vast majority of Group revenue, is not affected by the adoption of IFRS 15 and is accounted for under the leasing standard, IAS 17.

(ii)        Services - Revenue from providing services is recognised in the accounting period in which the services are rendered, the majority of which are short term and a very immaterial proportion bridge a financial period 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.  Customers are invoiced on an agreed upon basis and consideration is payable when invoiced.

(iii)        Sales of goods - Revenue from the sales of goods primary 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.

12.          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 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.

13.          Forward Looking Statements

The Chairman's Statement includes statements that are forward looking in nature.  Forward looking statements involve known and unknown risks, assumptions, uncertainties and other factors which may cause the actual results, performance or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements.  Except as required by the Listing Rules and applicable law, the Company undertakes no obligation to update, review or change any forward looking statements to reflect events or developments occurring after the date of this report.

14.          Alternative Performance Measures

(i)           All performance measures stated as before amortisation are also before impairment of intangibles.

(ii)          Basic earnings per share pre amortisation and exceptionals is reconciled to basic earnings per share in note 7.

(iii)         Profit before tax, amortisation and exceptionals is reconciled to profit before tax in the Income Statement.

(iv)         Return on average capital employed is based on profit before tax, interest, amortisation and exceptionals divided by average capital employed on a monthly basis using the management accounts. Profit before tax, interest, amortisation and exceptionals is reconciled to profit before interest and tax in the Income Statement.

Responsibility statement of the directors in respect of the half-yearly financial report

We confirm that to the best of our knowledge:

·     the condensed consolidated set of interim financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;

·     the interim management report includes a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

By order of the Board

27 November 2018

The Board

The Directors who served during the six months to 30 September 2018 were:

Jeremy Pilkington (Chairman)

Neil Stothard (Chief Executive)

Allison Bainbridge (Group Finance Director)

Steve Rogers (Non-Executive Director)

Phil White (Non-Executive Director)

Independent review report to Vp plc

Report on the Condensed Consolidated Interim Financial Statements

Our conclusion

We have reviewed Vp plc's Condensed Consolidated Interim Financial Statements (the "interim financial statements") in the interim report 2018/19 of Vp plc for the 6 month period ended 30 September 2018.  Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

What we have reviewed

The interim financial statements comprise:

·     the Condensed Consolidated Balance Sheet as at 30 September 2018;

·  the Condensed Consolidated Income Statement and Condensed Consolidated Statement of Comprehensive Income  for the period then ended;

·     the Condensed Consolidated Statement of Cash Flows for the period then ended;

·     the Condensed Consolidated Statement of Changes in Equity for the period then ended; and

·     the explanatory notes to the interim financial statements.

The interim financial statements included in the interim report 2018/19 have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The interim report 2018/19, including the interim financial statements, is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the interim report 2018/19 in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express a conclusion on the interim financial statements in the interim report 2018/19 based on our review.  This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose.  We do not, in giving this conclusion, 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.

What a review of interim financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion.

We have read the other information contained in the interim report 2018/19 and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

PricewaterhouseCoopers LLP

Chartered Accountants

Leeds

27 November 2018

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