Highlights

• Vp plc held its full-year Dividend at 39.5p, paying 11.5p in January 2026 and 28.0p in August 2026.

• Adjusted dividend cover fell to 1.4 times from 1.7 times, with the board targeting a return towards 2 times.

• The group booked a statutory loss before tax of £7.0 million after £20.1 million of restructuring charges at Brandon.

• Net Debt excluding leases rose to £148.9 million, still inside the board's Leverage target of 2 times.

When a company holds its dividend through a loss, the maths needs scrutiny. Vp plc (LSE:VP.) rents out specialist equipment to builders, rail contractors and housebuilders, and its latest results mix a flat payout with a statutory loss and a costly overhaul. The cover figure tells the story.

What was paid

An interim of 11.5p went ex on 4 December 2025 and was paid on 15 January 2026. A final of 28.0p went ex on 18 June 2026 and was paid on 5 August. Together they make 39.5p, unchanged from the previous year, and represent 7.22% of a share price of 547.0p. The group paid no special dividend. The Record Date for the final was 19 June 2026, and a Dividend reinvestment election closed on 3 July.

Cover under pressure

Adjusted Basic Earnings Per Share fell to 54.5p from 66.8p, so cover on that measure slipped to 1.4 times from 1.7 times. The board expects it to return towards 2 times over the medium term. On a statutory basis the group recorded a loss per share of 13.8p, compared with earnings of 36.6p a year earlier, which is why reported payout ratios look negative. Adjusted profit before tax fell 26.4% to £27.0 million on Revenue of £358.3 million, down 5.7%.

Restructuring and impairments

The statutory loss before tax of £7.0 million followed a one-off restructuring charge of £20.1 million at Brandon Hire Station. One-off impairments of property, plant and equipment and right-of-use Assets came to £5.1 million, of which £4.8 million relates to the Brandon transformation. There was no Goodwill Impairment this year, against £0.9 million a year earlier. The UK division produced adjusted operating profit of £24.6 million, down from £37.4 million, while International rose 30% to £12.6 million.

Debt and the business

Net debt excluding leases rose to £148.9 million from £138.5 million, or £212.6 million including leases. Leverage remains below the stated 2 times target. Vp is a specialist rental Business serving infrastructure, construction, housebuilding and energy markets. Its brands include Groundforce, TPA, Torrent Trackside, Brandon Hire Station, ESS, MEP Hire, CPH, UK Forks, Airpac Rentals and Tech Rentals, and Vp Rail offers an integrated rail service.

Outlook and risks

The group expects early trading in the new year to be challenging, with UK construction activity particularly sluggish, and anticipates improvement through the year as the Brandon restructure, digital investment and infrastructure Demand take effect. It describes expected trading as in line with current market expectations. Technology resilience and market competition risks have both increased, driven by cyber-attack frequency and geopolitical uncertainty, particularly in the Middle East.

Why adjusted and statutory results differ

Vp plc (LSE:VP.) separates one-off items, such as the Brandon restructuring charge, from its underlying result. Adjusted figures show how the continuing business performed, while statutory figures include all costs. A statutory loss with an adjusted profit is therefore not a contradiction, but readers should consider how often the one-off items occur. If they repeat, they become part of the real cost of doing business, and the dividend should be judged against both measures.

Cover and leverage

Cover of 1.4 times is lower than the 1.7 times of the previous year, and the board wants to move back towards 2 times. At the same time, net debt excluding leases rose to £148.9 million, which stays within the leverage target of 2 times. These two measures work together: lower cover and higher debt reduce the safety margin, while rising profit and falling debt would restore it. Investors should follow both numbers in the next results.

Equipment rental and the construction cycle

Hire companies serve customers who use equipment for projects, so demand follows construction, rail work and infrastructure spending. The group says UK construction activity was sluggish, while International operating profit rose 30% to £12.6 million, a reminder that geographic spread can help. Rail, power and infrastructure markets can be more stable than housebuilding, and the mix of customers shapes how well the group copes with a slow period. Investors following LSE:VP. should apply these checks to each new announcement.

What to watch next

The interim results will show whether the Brandon restructure is delivering savings and whether adjusted cover is improving. Investors in Vp plc should also follow net debt, digital investment and demand from infrastructure customers. If cover moves back towards 2 times, the dividend of 39.5p would stand on firmer ground.