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Restructuring and investment help put VP back in the black

FINANCE

A RESTRUCTURING and greater investment has returned hirer VP's tools arm to the black.

This improvement helped VP raise pre-tax profits £1.3 million to £11.2 million in the year to March 2006 as turnover motored up £9.4 million to £99.4 million.

Group managing director Neil Stothard said: 'It has been a significant turnaround at tools.

'We showed we can take costs out with the restructuring in the previous year and now we have grown the business. The momentum is there to continue that transformation.'

The tools operation, Hire Station, made a £1.9 million operating profit after losing £700,000 in 2005. Turnover rose to £41.9 million from £34.8 million last time.

This came as the group stepped up investment in new kit. Spending was raised £1.6 million to £7.3 million.

VP's groundforce division, which focuses on excavationtype work, produced the biggest profits but suffered from a drought of water utilities work.

Turnover was down £1.1million at £23.5 million and operating profits £500,000 drier at £5.3 million.

Profits were down a quarter at the rail-related trackside arm. The best-performing business was the UK forks division, where operating profits rose £700,000 to £2.1 million as workload drove up £1.5 million to £14.3 million.

For this financial year, VP's house broker Brewin Dolphin is predicting a £13.9 million pre-tax profit and Mr Stothard is confident of achieving this.