VP PLC (LON:VP.) has posted a record profit for its previous year, however, the company said will delay its dividend payment until later in the year due to uncertainty caused by the coronavirus pandemic.
For the year ended March 31, the equipment rental specialist reported a pre-tax profit before exceptional items of £47.1mln, up from £46.8mln in the prior year, despite revenues falling 5% to £362.9mln.
While the company said it was “anticipating a year of progress”, the pandemic had upended these expectations with trading in April being “very weak”, however, the firm said May had improved and its anticipated a “slow, incremental recovery over the coming months”.
However, the company said it has withdrawn its guidance for the next financial year until more clarity was available on the impact of coronavirus on its business, adding that it will be delaying its dividend payment for the same reasons.
“The board appreciates that income is of vital importance to shareholders and we intend to restore normal patterns of distributions as soon as possible”, VP said.
The company’s chief executive, Neil Stothard, said while the firm had furloughed around half of its UK employees at the peak in April, it had since “re-opened branches and taken employees out of furlough as demand has slowly recovered”.
"We have strengthened further our financial position by conserving cash; reducing costs and delaying the dividend. We believe that this will help ensure the long-term resilience of the business as well as its capability to respond quickly as markets recover… A combination of supporting a diversity of markets across a range of geographies together with a strong financial discipline and an excellent team will help us to quickly re-position the business and allow us to embrace the fresh but increasingly positive challenges that the next 12 months will hold", Stothard added.
Shares in VP were flat at 800p in mid-morning trading on Wednesday.
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