A leading construction equipment firm has issued a profit warning following a “disappointingly muted January”.
Vp Plc said current pressures in the construction and water sectors had hit activity volumes.
It said it was aiming to cut 400 jobs through its transformation of Brandon Hire Station, which involves reducing its branch footprint from over 100 to 41 by 31 March.
The firm has now revised its profit down, from £36m to between £26m and £29m, for the year to 30 September 2025.
Vp said in a trading update published on Wednesday (11 February) that current market headwinds had “resulted in a disappointingly muted January ‘return to work’ and a correspondingly slow fourth quarter ramp-up in activity volumes”.
It said the headwinds had affected the construction and water sectors in particular, adding that it had seen “slower than expected impact from AMP8”, the eighth asset management period for the water industry, which runs from 2025 to 2030.
The equipment provider said activity in the rail sector “remains steady yet subdued”, adding that it continued to see growth and strong demand in the energy transmission sector.
Vp owns seven construction equipment providers in the UK, including tool and equipment specialist Brandon Hire Station and specialist ground engineering equipment provider Groundforce.
Vp plc chief executive Alice Woodwark said offering a diversity of specialist equipment to a variety of sectors “gives our business market-leading resilience and opportunity”.
But she added: “It is not immune to general trading conditions in construction and delays to major infrastructure programme spend in key sectors.”
During trading this morning following the release of the profit warning, the firm’s share price plummeted by 12 per cent from 554 pence to 488 pence.
However, in a market note, Greg Poulton, contributing analyst at Singer Capital Markets, said that some of the issues cited by Vp were already priced in.
He said: “Notwithstanding the revised guidance, we see no reason to change our investment case. Vp is in our view the quality player in the UK equipment hire market, given its specialist sector focus and strong financial characteristics (attractive margins, high returns, strong cash generation).”
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Joshua Stein