Vp plc ($VP)

We will open up for questions. [Operator Instructions]. So I am delighted to be joined by VP, Chief Exec. Alice Woodwark, and CFO, Keith Winstanley. Today's presentation will cover the full year 2016 results and Marks Alec's first results presentation in her role as CEO. And with that, I will now hand over to Alison Keith. Thank you.

Thank you, Rachel. Really appreciated. Welcome, everybody, and thank you very much for joining this morning. I'm really pleased to be sharing with you our financial results for the year just gone on March 2026. As Rachel said, my name is Alice, I would be incoming CEO for Vp are joined in February. -- joined by.

Yes. Hi, everyone. Keith. I've been here a while. So hello again.

So the picture that you've got in front of you is a good example of the work that we do of wherever you are, certainly, if you're in the U.K. and perhaps if you're in Germany or Ireland or Australia, driving around the country, you will be driving pasta. -- whether that's roadway cameras that are used in surveying works, people working in buildings or fit out this is the Vienna Metro and it's an example of what our brand force division does. And what you can see there is what we call shoring equipment, which keeps those in enormous spaces open and safe to work in for our construction colleagues. So a good example of the work that we do. what we'll do over the next few minutes is I will take us through some of the highlights for the year just gone. And including a couple of areas where I think you might be more interested because it's -- they've been a fair part of our performance conversation over the last few months. Then over to Keith for a review of the financials. And then back to myself. So we'll then look a bit at the markets that we're in and how they're doing and a forward look in terms of our strategy and medium-term plan. As Rachel said, this is my first year as our CEO. So perhaps just a bit of background to me coming into this role, I have led divisions within FTSE B2B companies for the last decade or so. So I've got my first P&L role within the Compass Group. So a big catering provider internationally and in the U.K. I had a number of P&L leadership roles there for different divisions. And then about 5 years ago, I moved over to Mike, which is a facilities management company and did a lot of work particularly in places at schools and hospitals. -- supporting with engineering teams in those buildings. So my background is B2B. I love practical stuff. So a lot of things what you can see in this picture here, I think it's really motivating to be part of a company where we are doing the stuff that keeps our economy moving and particularly being part of companies that create great employment opportunities for people. One of the things that's been most fun over my first few weeks and months has been meeting many colleagues with stories about how their professional development has come to life with apprentices, graduates, that's the kind of stuff that we should be doing, pushing our economy forwards, creating chances for people and obviously, also creating profits at the same time is critical to us. So that's a bit about my background. Let's move on to highlights for Vp just gone. So starting with some of the strategic elements. I'm really pleased to say that the restructuring program for our brand and higher station division, it has now been completed. So this is something that we announced back in November. It involves reshaping and resizing brands and moving it much more towards being a B2B and a strategic customer supporting division. We'll talk about that in a bit more detail in a minute. But that restructuring is done. So that stands up on that one. Also on the strategic side, we have a digital road map that is supporting our development and some of our margin opportunities as a company. And this year, we went live with our price quote tool. And what that does is it gives us much better controls for the way that we price for our customers. So our best prices are going to the right places within our customer set and we're already seeing in the first division, we put that in. We're already seeing that supporting our margins. So that's really positive news for us. And that will continue into the year that we're in now. We're also in the midst of developing a strategic plan and medium-term plan for the company, and I'll talk about that a bit later. On the financial side, we have faced a challenging year, certainly in the U.K. general construction see a reasonable number of headwinds and you may have seen us come out in February and adjust downwards our operating profit expectation for the year. We have, however, delivered the full year in line with that February guidance. So we did take a step down, but we're delivering it to the new number, and that's a real positive for our business. A particular high point was our international segment. That saw a 30% increase in profits -- I think more supportive markets and hard work being done to take advantage of those. We continue to invest in our fleet. We pride ourselves in having a high-quality, relatively young fleet, so more than GBP 50 million has been invested in that over the last year. We're going into the new year with a very strong balance sheet. Keith will later talk about some refinancing activity that gives us that strength and resilience. And our confidence in the underlying fundamentals of what we're doing and the health of the business for future means that we are happy to maintain our dividend at 39.5p per share. That's what it was full year last year, and that's what it will be full year this year. A little bit on the markets with more to come later -- so water has seen a bit of a choppy start to the investment cycle that we're in, in the U.K. that's called Ana, but we are seeing some signs of positivity coming through there now in the new year. In our other infrastructure markets, we've seen steady activity in both transmission. That seems like electricity kilos and rail. In construction, our other big markets specialist construction has been good and general construction has been more challenging. And then 2 smaller markets for us, housebuilding and energy, both performing in a satisfactory way we do see a few headwinds, and we will cover those later on as well. So that gives us some highlights. As I said, I did just before I hand on to keep on to talk about a couple of topics that I think will come up in the Q&A. And so we want to make sure that we are addressing them upfront. One is our restructure the brand and higher station business. So brands and high station does the general tool and equipment hire largely into the general construction market. We announced back in November that what we wanted to do was slim down the size of that business, so fewer depots and also, unfortunately, that is a head count reduction. And what that would mean is that we entered this year with a tighter business that is totally focused on B2B, so just trade customers. And that's exactly where we've got to. So everything that we said we would deliver back in November has now been done. So that's a big tick against that plan, and you can see the key elements of it bottom left. So from this point onwards, we don't have any consumer business go through Brandon. So Icar, for example, bring them up and put an order in, they're not going to take cash transactions. Everything is being done through trade accounts. It's -- because we've done this, it reduces the volume of the Vp's revenues overall that are going through general construction. So it pivots us that a little bit more towards our specialist sectors. And that's a good thing for us because those specialist sectors, they've got better prospects, they're growing better and they offer us better margin opportunity. So that's good for the group as a whole. It means that for the future, Brandon is going to focus on providing walk-around equipment support for our most strategic customers. So for example, if you are hiring one of those big shoring systems that we saw on that first page, then you might need signage or fencing or welfare, lose, et cetera, that go with that. And we would like to be able to provide you with that comprehensive offer, and that's where Brandon comes in. In terms of the financial impact of all of this, we target a payback on our investment in 4 years. There's a cash cost, total cash cost of GBP 21 million, and we've borne about half of that in the year just gone. I should just highlight that the last time we would have -- you would have heard from us that cash cost was somewhat lower at GBP 16 million. It has gone up a bit. And the reason for that is we've really got into the detail. We know exactly what the residual liabilities and costs are for the properties that we're getting out of because we have now done a more detailed scan on things like dilapidations the cost of exiting a property base, we can put a more accurate number on it, which has been somewhat higher, but we still target that full year payback. So that's on Brandon, and then we'll move on to second area I wanted to do a deep dive or before we go back up to the financials. And this is the water sector. And when we recast our profits back in February at that lower number, one of the reasons back then was that water revenues from the new investment cycle that we're in, in the U.K. on coming through as rapidly as we had thought they would. So it's worth, I think, as we get to the end of the year with what sort of 3, 4 months further on now, just updating you on that. So a page here on the market and then a page in a second about how we're doing. The market itself -- the U.K. water industry runs on investment cycles, 5-year cycles. We were in nat at the moment, which was from 2025 to 2030. It's a huge program of spend over GBP 100 billion, and that's more than double the size of the last program, which round to '25. So there's a big opportunity for us. We're in year 2 at the moment. We would expect our pickup in revenues. And you can see the revenue curve that we expect, bottom left, would have expected that to be a bit bigger or a bit earlier. We think that planning constraints and people getting going with the design stage on these very big projects as we have slowed us down a bit, but there is a significant opportunity to come through from here onwards. And then the right side, you can see the divisions within our business that mostly engage with water and good positioning for us with our customer base. If you look at Vp's top largest 25 customers right across our group. That center 25 includes all of the major main contractors that are working on that pad. So that will be big Tier 1 U.K. construction companies and self contractors, and we have relationships right across that list. So that positions us well. So all of that's positive, but let's talk about that slow start that we had, and that's on the following page. So here we can see -- we can see on the left-hand side that we are really well positioned across these regions. We have all the opportunity in all the relationships. That's how some of our divisions show up against the map where are we working currently. But we can also see on the right-hand side that we have had a bit of a mixed picture. So the dark blue bars for the key 3 divisions that work in water, this is just looking at their water revenues. This shows you adopt rewards, April this year versus April last year and those bars, as we said, are moving backwards. So in other words, at the start of this financial year, we're still somewhat below where we were last financial year, and that's what we talked about in February. But we also see a growth here. So the light blue bars show the April just gone revenue numbers for those divisions in water, and they compare it to our lowest mark and the lowest month happened over the winter depending on which division you talk about, it was either December, January or February. And we are seeing an uptick now since that low point in the cycle, and that's positive for us, particularly as we're seeing our strongest growth in the divisions that tend to be on-site first, which is why here we call them barometers. So ESS is stuff like survey equipment, you're going to get your delight on site before you get anything else there, and it's good to see that coming through. TPA is our roadways business. And again, you put your roadway in place so you can actually reach the site before you need any other equipment. So again, it's good to see that business coming through with some more positivity. So summary here is we acknowledge it's been a tougher start than we would like to this investment cycle, but we do now see elements of that more positive revenue coming through. So I wanted to head those 2 off at the pass and then over to Keith on the financials.

Thanks, Alice. We'll go straight to P&L William -- so against challenging market headwinds, we've delivered a resilient set of results. We have seen some reduced performance against our key income statement metrics. So revenue was down around 6% to GBP 358 million. U.K. revenues are down just under 10%, which are partially offset by a 14% improvement in revenues from our international segment. U.K. segment has been impacted by challenging conditions, particularly in general construction. Although our Q3 decisions to improve profit by moving away from retail customers and operating from a small footprint in Brandon has also contributed to that revenue reduction. Our International segment has seen a good level of growth year-on-year driven by the full year impact of last year's Irish acquisition, CPH. I'll talk more about our international segment, particularly our prospects in Ireland and Germany a little bit later in the presentation. Adjusted profit, which is our main profit metric and its profit before tax, most intangible amortization and exceptional items reduced GBP 9.7 million to GBP 27 million. with net margin reducing from 9.7% to 7.5%. And that margin impact includes higher U.K. employment costs from the national insurance increases and minimum wage increases we saw in April last year, but it also includes increased technology costs as we continue to progress our digital role. Exceptional items were GBP 30.6 million, and I'll cover those in more detail on the next slide. So our exceptional costs predominantly cover 2 main areas. The first is the Brandon high station restructure, totaling nearly GBP 25 million. And this significant restructuring program covers a few areas. So the first is property-related costs of GBP 10.9 million. This is for costs such as options employment-related costs of BGP 7.8 million, this is redundancies, pay an move notice. -- fixed asset impairments of GBP 4.8 million covering right-of-use assets and property, plant and equipment a GBP 1.4 million of other transformation costs covering areas such as professional fees. The other big area there is the ongoing accounting for future deferred and earn-out payments associated with last year's CPH acquisition, as you can see, GBP 4.6 million. We highlighted these previously, and we will continue to incur until the end of the earnout period in October '27. All that is on a P&L basis. But on a cash basis, we've incurred GBP 11 million of exceptional outflows in the year with GBP 10.5 million relating to the brand and high station restructure. We expect to incur a further GBP 10.6 million associated with that restructure in future years as we continue to exit our property leases and dispose of our excess pay fleet. On to the balance sheet. Our balance sheet positions us well for future growth, and we continue to invest back into our high fleet with investment in a year of just GBP 52 million. The new line on the new Rowan here this year is assets held for resale. And what that is, well, most of it is the excess high fleet that we identified as part of the Brandon restructure, and we intend to dispose of that in the next 12 months. Debtors remains well controlled. So DSO and the bad debt levels -- bad debt write-off levels are consistent with last year. And net debt increased to around GBP 149 million. I'm going to more detail on that on the next 2 slides. So net debt increased by GBP 10.4 million in the year, and that includes the GBP 11 million of exceptional outflows that we just touched on. Cash generation remained strong, although at reduced levels compared to the 4 given the reduction in trading performance. We continue to be disciplined in how we allocate our capital with expenditure focus back into our higher fleet. Outside of this investment, we continue to pay interest in our taxes, and we return funds to our shareholders that our dividend which is uninterrupted now for over 30 years. A quick reminder of our finance facilities. So including our overdraft, we have around GBP 190 million of facilities, and these include 2 fixed rate private placements. We also had a GBP 90 million revolving credit facility, which during the year, we extended for a 30 year and that now matures in November '28. Our loans are subject to 2 covenants around interest cover and a net debt to EBITDA gearing ratio, and we continue to operate well within these. Our ratio finished the year at 1.9x, below our stated target of 2x, predominantly due to that reduction in EBITDA. We continue to remain with 2 as our target going forward. And we expect that ratio to improve over the remainder of FY '27. Post year-end, in advance of the GBP 65 million private placement maturing in January '27, we increased the size of our RCF from GBP 90 million to GBP 120 million and we entered into 2 new private placements totaling GBP 48 million. These will be drawn in December in a 5-year terms. We continue to operate with a disciplined approach to capital allocation. We have a good level of headroom, and we've secured the financing for our next wave of growth. So we remain committed to maintaining a young and well-invested rental fleet and net CapEx represented over half of our operating cash flows this year. Gross lease investment did decrease from around GBP 65 million to just under GBP 52 million as we prioritize CapEx into those areas that I have to deliver the best returns by how to hand growth potential. The 2 charts underneath the table, give a little bit more insight into where we target that investment. So the left-hand set of charts split CapEx by geography, you'll see there's quite a high weighting with our CapEx towards Ireland and Germany. And whilst these currently only represent a relatively low proportion of the group's revenue, there remain key growth droppers. The right-hand side splits the investment by end market. And you'll see that the majority of our investment is towards the high return and high potential infrastructure market. Just to quickly touch on M&A. At the start of this year, we were pleased to acquire a small Irish bolt-on business operating in specialist construction. In terms of future acquisitions, at least in the short to medium-term, we expect our acquisition activity to be limited to small bolt-ons. In terms of disposals, we do continue to keep considering areas of the group that either don't deliver sufficient returns, don't have the credit growth potential or don't amount fully with the group's strategy. So given our continued investment in Ireland and Germany, it was pleasing that both the revenues and the profits of our International segment grew in the year. In Ireland, the market remains supportive with high levels of overseas customer investment. In terms of our investment last year, where we put in around GBP 8.5 million of CapEx and that was predominantly to support the CPH acquisition from the year before. And pleasingly, that business continues to outperform our pre-acquisition expectations. In Germany, we invested just under GBP 13 million in the year, and that was predominantly on table tracker as we continue to take advantage of the opportunity in Germany of the large nationwide grid transformation. Activity over there remains high, and we expect investment in FY '27 at similar levels. Overall, growth in our International segment has meant that the International segment now represents around about 1/3 of the group's overall operating profit. Moving on to our returns and our dividends. So the top chart shows our historic returns. And other than during coded this year stands out as a bit of an outlier. We expect those returns to improve in FY '27, given our strategic progress across areas such as the brand and transformation and also our positioning in our drug markets. The bottom chart shows our dividend story with our dividend stretching back over 30 years. And whilst we will see a reduction in cover, the Board has recommended a final dividend of 28p consistent with last year. reflecting the Board's confidence in the underlying fundamentals of the business. So just to quickly summarize the finance section before I hand you back to Alice, against challenging market headwinds, we've delivered a resilient set of results. We've seen good growth in our International segment, but experienced challenges in the U.K., where our Brandon high restructuring has shifted the group's waning away from general construction towards a higher returning infrastructure markets. We have a strong balance sheet and post year-end, we've secured the finance for our next wave of growth, and we continue to invest back into our fleet in those markets to deliver high returns and the geographies that show us the highest potential. Alice?

Okay. So 2 sections to go some time now on our operations and the markets that we work in, and then we'll move on to the strategy, some of which is achievement and some of which we'll be doing next. So on our markets, this page gives you a view of the 4 markets that we operate in. The 2 on the left, obviously being much more significant in terms of that share of revenue, that revenue share, so that's BP's revenue split between those that revenue split hasn't really moved materially year-on-year. That's pretty stable. We'll go through each of these 1 by one. Just some trends that you will see coming out through that. One is that you'll see the diversity of where we get our revenues from in terms of markets, and the ways in which that does help us with our resilience. So yes, we've had some tough markets, but also some places where we've got bright spots, and that's helped us offset. You'll also see us talk perhaps positively about the areas where we are investing more. So we are pivoting our business towards those more positive markets. And I think you'll see a sense that the forecast for the year to come is relatively balanced across these 4 areas where we find our revenue. So we'll start with infrastructure. So here, this is one of our largest segments, almost 40% of our revenues come from infrastructure. And in fact, for 5 of Vp's divisions, they make the majority of their revenues in the infrastructure market. So there are parts of Vp where this really is a critical element of our revenue mix. We benefit in infrastructure from big programs that we can latch on to and sell into. But they're overlapping and they're not particularly correlated to each other. So examples of this would be, we've spoken about the U.K. water market, where we are in year 2 of 5 of the U.K. an investment cycle. In U.K. Rail, that's investment program, CP7. We're in year 3 of 5. Over in Germany, where we see transmission doing well, the German NEP program, that's in year 2 of 12, so a different time horizon. And it's nice to have these big reliable programs that don't necessarily match up with each other in terms of when they're starting, when they're stopping when they're going through the strong point. So that's helpful to us in terms of diversity of sources of revenue. Just to go through the key subsections within infrastructure. So transmission, reasonable performance, both in the U.K. and Germany in FY '26 particularly in Germany, that big 12-year investment program is really starting to come through. And we expect that positivity to continue into the year to come. Water, we've done a little bit of depth, so I won't go through it in detail here. But as we said, we were somewhat disappointed by the revenues in FY '26, but we do see that ramp up into our coming towards us. and a lot of spend for us to go after. In Rail, CP7 has given us steady progress. That's largely working directly with network rail. But we've also seen the benefits of a pipeline of activity that goes beyond the core U.K. rail network. So outside of Network Rail effectively, -- that's things like working on site, well, C, upcoming work with the Manchester Metrolink, its great to see. HS2 actually continues to be a source of revenues as well. And we're seeing there the benefits of us having set up something called Vp Rail, which is the part of Vp that now specifically target sales opportunities in the rail area, and it has helped us to gain a foothold in some of these projects beyond network rail, and that gives us some revenue upside. So we expect that positivity to continue. So let's move on now to Construction, which is the other of our largest markets in terms of revenues. This is really a bit of a game of 2 halves. So within construction, we have specialist construction and general. We dealt with specialists. We've seen good progress in terms of revenue on specialist construction, and that's driven geographically by both the U.K. and Ireland. And in terms of what kind of subsectors do we mean, well pharmaceutical has been strong, particularly in Ireland, where we're seeing good levels of our customers many of which are overseas and investing in Ireland because it's a routine to Europe. Data centers is coming through as part of specialist construction, and MEP, that's our division that does work inside buildings on fit out. So if you imagine people on Sisili, those kind of things, working at height, but inside the building, they might be doing plumbing, HVAC, lighting, that trade is all represented within specialist construction. And that's been doing well with, for example, some of the big refit projects that are happening in London. So we spent much of the last year supplying equipment into the Citibank Tower and Canary Wharf, which some of you may be familiar with, huge refit and we have been on site there providing equipment for a significant amount of time. And we expect specialist construction to continue to look positive into the future. Again, some of those sectors, subsectors, I guess, within specialist construction are looking good. And again, we expect that to be not just U.K. but also overseas, particularly Ireland. General construction is definitely more muted. A great majority of what we do in general construction goes through Brandon, and we've spoken about that not being our strongest market. And that fueling our decision to restructure that business. So it has been a dampened market and we see that reflected in the world around us. So for example, we track the S&P Purchasing Managers Index within construction. That has been in negative territory, so signaling declines for the entire year FY '26. In fact, it remains in the negative now, which is not particularly positive -- so obviously, then we need to be exercising self-help. So what we do there, we have put the Brandon restructure in place that reduces our exposure to this market and we continue to pivot that part of our business towards our more strategic customer options. But we do expect that the general construction market will remain quite muted for the year to come. So again, that game of 2 halves. And construction leads us on to our last 2 markets and these are both of the next slide. So house building on the left and energy on the right. And they are much smaller, respectively, 7% and 8% for Vp's revenues. Housebuilding, subdued but stable through the year we've just had. I think you'd be well aware of the challenges facing the U.K. housebuilding market. And of course, we are impacted by those. Our customers in-house building, who we know very well and have long-term relationships with. They're not turning us off. It's just the revenue levels are lower effectively with each 1 of them. So looking ahead, when we do get recovering volumes in-house building, we expect to grow with that. There are elements of help coming in during the year that we think will be supportive. So for example, Homes England, the government body that starts writing grants under its affordable housing program in the second half of 2026. So that will help some of our customers increase their build volume. So we see those as positive but we do see that it's going to be -- it's going to continue to be a muted sector for us for the year to come. And then Energy, a lot of this sits within our Air Pac division that's supporting largely the oil and gas sector. And we've seen impact there negative impact from the disruption in the Middle East, both because the region itself obviously becomes very hard to operate in for our customers. and also because it just creates that uncertainty in global oil prices and that doesn't help our customers plan their projects, particularly well. So we've seen some impact there. And again, when the Middle East situation starts to resolve itself, we would expect more stability and opportunity to come through. There is a bit of an offset because we also put renewables within our energy sector. So for example, in Germany, our TPA business, the Rodeway business, that also does some work supporting the erection of wind turbine bases. And that has been a positive for us in the year just gone. And again, that obviously is a mega trend that we continue to see on towards our renewables infrastructure. And so there is some offsetting benefit from that. So that gives us a bit of an overview of where we are from a market perspective. Last thing we're going to do is just spend a little of time on strategy. We tend to, as a company, when we talk about strategy, we start by talking about who we are and what makes us stand out. I think we should always come back to this because it's part of what gives us our opportunity to create margins and growth. We talk a lot about expertise, so Vp absolutely is an expert equipment partner. I've spent a lot of time in my first few months going out and meeting with our customers. I've met 10 or 12 of our biggest customers now. And I have been -- I've worked for years in B2B, and I'm used to having conversations with customers and them being quite demanded, quite rightly of us of suppliers. Something that's really surprised me to the positive actually is how much my customers have spoken to me about our expertise and about the high quality and levels of service that come with that. So I feel very confident with the words on this page here. that we have these clear specialisms and that is something that our customers put a real value to because quite frankly, it helps them work faster, work safer and be confident in the quality of the equipment that they're using on their sites. So I think specialists can be a difficult work is what does that mean? So this page tries to make this as clear as possible. We have -- our divisions are all mapped on this grid. And we obviously have some division to work internationally, some who work in the U.K. and 2 that do both. And they are all specialists but in a couple of different ways. So we have some divisions that are fleet specialists. FOX is a great example that this mostly U.K. folks is a fleet of telehandlers. So those are the machines that run about on our buildings like moving materials. And it's -- we are very focused on that piece of equipment is the thing that U.K. folks supports. And we know, quite frankly, everything about that kit, how to make it function well in the field, ground force you saw that picture on Page 1. That's largely assuring and piling business. So that -- those really heavy pieces of metal that play that really critical job in major projects, that's what they're all about. And of course, you could have those projects in lots of different sectors, but it's all about knowing that kit, how to design it and how to service it. Then on the right-hand side, we've got parts of Vp that are activity specialists. So this is where if you went toward a pop, you'd find a wider range of kits, but it all supports a particular trade, a particular activity on site. And Vp is a great example. That's the business that works in fit out, so inside buildings. And it's all about supporting people working at height on HVAC, on plumbing and all of the equipment that they need to do that job really well. And ESS and tech rentals, they largely do the same thing within the field of survey equipment and comms equipment and safety equipment. So again, you can imagine that that's a bit of a wider range of kits but it's all about supporting a specific activity and doing it really well. And that means, for example, it also gives us a foothold into training, which we also do through ESS. So we know this activity really well. We also train the operators who go out in the field and use our equipment. So that's our strategic foundation and will remain so. If we -- we spend a couple of minutes now talking about where Vp is today and grounding that in our history, Vp has a ruling on history, over 70 years. And I think it's been important for me coming in understanding how that history plays into our opportunities today. So sort of see it in 3 different ways. Vp spent a very long time. So on the left there, building a series of expert businesses what we talked about on the previous page, you really know what they're up to and critically, some very long-term customer relationships. So we have customers that we have worked for decades and really grown up together within the economies that we work in. That's a great foundation for us to have. More recently, particularly under my predecessor and BLB, there was a lot of work done creating strong group strength and resources. So that really lays the foundation for future group. There are critical functions that have been established in that time, much stronger HR support, more comprehensive IT capabilities, transformation capabilities, a great sustainability team procurement would also be on that list. These are things that are essential for growth in the decade that we're in now. These are all the skills that our customers expect us to have and really enable us to find opportunities for growth and go after them but also build our margin over time. You need these skills. So that gets us to where we are today, but that's springboard for growth. I really think now we've got the opportunity to leverage all of that. And in particular, really sharpen our expertise-led proposition, go after our customers in a much more targeted way. So cross divisional sales will be a great example of something that you can do if you've got a good group architecture that brings our divisions together and also find those ways of getting synergies across our divisions. So that's about having more of a Vp way of doing higher. So I see where we are now and what we're going to achieve very much within the context of the strength that has been built up in Vp over the previous years and previous decades. There is 1 more element in the history that I do want to take us through because, again, I think it's got real relevance for where we're going next. And if we click on a slide, this shows us, Vp's performance, profit performance over the last few years, so 2023 to 2026, which is that number that we'll recognize we've just delivered in the year just gone. Vp's profits went down over this period, has been something that investors have said to me, as I started out, is if we have a decline in profits, which we have, you can read it into our numbers, it's not a secret. It can raise a question mark unless we explain why that happened. And so I looked into this. And the story that I found is one, I think we should be telling because it also tells us about Vp's sources of strength. So here as we go through, well, why did we see that decline in profit. Right on the left-hand side, that is the negative impact of Brandon Hire Station profitability on VP over those 3 years. It's fairly material -- and that is why in the ag just gone, Vp as really address that head on, put that restructure in place and transformed Brandon so that it can play a different and more successful 1 in the future. So yes, there was a problem there with 1 of Vp's divisions and it has been addressed. Then on the right hand set, these blocks for me all about how Vp has built a really strong foundation for the future. So under rest of group, you can see profits have increased over the period from our other divisions. We have a healthy core that is doing well. Vp also has a history and a deserved reputation for being good at acquisitions. Our latest material acquisition was CPH and that business is doing well and it's settling very well into BP. And you can see the benefits of that come through to the group. Then we've got an investment block. So this is money that's been invested in those core foundations and functions that I spoke about on the previous page. It includes a lot of functional resource. It also includes our digital road map. And I'll talk in a second about the impact of that staffing. But -- of course, in 2026, we have to be looking at digitizing what we're doing, ensuring that tech is playing a stronger role in supporting us over time, getting the benefits of AI through to our business. So we need that digital road map, and that investment shows up in our numbers. I do think it means that where we are now at the start of FY '27, we have all of the benefits of that investment supporting us as we seek future places to find the value growth. So I think it's a story we should tell, we should be open about because it sets ourselves for the future. So if we hear from where to where we go. This page, you may -- if you've joined these calls before, you may recognize the dark blue bars. These represent the strategy headings that Vp announced about a year ago, all around growth, operational excellence and enables. And I'm here to continue that strategy. I think it's a good one. It absolutely points us in the right direction. So there's no revolution going on here, but there is evolution, and the evolution is those 5 pillars that sit underneath our strategy themes. And these -- this is new language. This is putting specificity to our medium-term plan, it talks about how we're going to deliver growth and how we're going to drive operational excellence. So special expertise as I delivered that delivers -- as I said, when I talk to customers, they really talk a lot about the power of our expertise and how that stands out. So this is a period of time where we need to make that work really hard for us and find the sources of value that mean we get growth out of that expertise and bringing that to the parts of the market where it's valued. We are already a service first trusted partner, but we can do more, increasing our strategic account program, more digitization of the customer service model -- and we've had success, as I said earlier, we've done Vp with a real sector support sector lens on sales. We will do that with more sectors in the years to come. Under operational excellence, we'll talk more about the strength of our group and the power of our divisions. So our divisions are experts in what they do and have autonomy in the way that they bring that to market. But there are also elements of what we do where we could benefit from sharing best practice and having more of a Vp way of delivering higher. So we'll work on that. And then performance, you can rely on, this is about having really clear KPIs, indicators way of reporting, including reporting to you on how we're doing and a bit more transparency there. So you should expect to see that coming through from us. And then evolving to meet the future under our enablers, safety absolutely is my first priority in the first priority of everyone working at Vp. So we will do -- we will do even more on that. We'll also work a lot on our talent development where we've made some really good progress, and we want to go. This is so essential to our business. When we talk about expertise, it's really the people that make it experts. And of course, we need to be an ESG and a social value leader. We have very large, very prominent customers who expect that algos and we're proud to play that role. So these are 5 pillars that you will see us coming back to and we're putting meat on the bones of that in terms of setting our goals in the months to come. And I am then totally comfortable just talking about what's to come in the future because I think you're more interested in actually what we have delivered -- so I do want to give some confidence around, well, what are we doing now under those 5 headings. So on the left, 1 and 2 on the growth, we are investing in Ireland where we see real opportunities for our expertise to grab a bigger share of the market. We are increasing our strategic account program by about GBP 10 million worth of revenue has been wrapped into that in the year just go and Vp is doing really well. 3 and 4 under operational excellence. We've delivered that price quote tool into the business, and we're starting to see it drive our margins forward. We have a Vp commercial team up and running, getting us better consistency and some margins out of that. And underperformance, you can rely on, again, data is always really important to something we've delivered in the last year is much stronger carbon reporting at the rate level. It's not a financial measure, but it matters a lot to our customers. And that data coming through really supports us as a customer-facing organization. Evolving to meet the future, delighted to say we will be joining the 5% club, that makes a visible commitment to us as an apprentice employer. We have 50 apprentices today. That will be 70 by the end of this year. It's a really important part of us building our own skills for the future. I spoke about that price quote tool going live as part of our digital road map. And next to come for us is going to be a group-wide CRM program, which will be put in place. It started already and it will be put in place through this financial year. So we are making progress against all of these areas already. So that rounds out the story. Last thing is really just to summarize what we've been through as we've shared progress and outlook. There has been a resilient performance admittedly against some tough macroeconomic indicators. We have completed that restructuring of Brandon. I'm very pleased to say. We've had high in those in the results, but the international profit growth has been a real positive. And we see a good outlook across particularly infrastructure and our specialist markets. We expect this year that we will deliver in line with market expectations, and we are working on that medium-term plan that will align against those 5 pillars that we just shared. So that brings us to the end. And Rachel, I think that leads to use the question.

Great. Thanks, Alice. And Keith, for that comprehensive run through the presentation. I'm just conscious of time, and we've got quite a number of questions, so apologies in advance. I'm probably going to go quite fast and try and get to as many as we can. So if we just crack on with those. What do the 2 of you see as the biggest growth opportunity for BP in the medium term?

Great question. For me, I think we need to make the best use of our geographic mix. So we are not just a U.K. company. I think that's become really clear in our latest set of results. And I think we need to go where the opportunities are. So yes, we remain really focused on getting the best out of the U.K. market, but I think there's some really interesting things happening in overseas markets, and we're well placed to capture those. I also like what's happening in elements of specialist construction and those niches where our expertise is a real benefit to us. So I think we will continue to focus our investment in those areas.

Yes. The other thing I'd add to that, Rachel, is the work that we're doing that you that you do call kind of self-help where we are -- we are doing what we can internally in terms of standardization, going to market as a VP or a kind of single kind of document point for some of that big strategic. So that as well.

Great. And while we're talking about strategic clients. There's been quite an internal focus on your strategic clients. How many of those are there? And at the moment, how many of them are dealing with the group across multiple divisions?

So there are many clients who deal with the group across multiple divisions. When we talk about clients that are formally within our strategic clients program at the moment, it's a handful. And it represents a reasonable share of our revenues as we've seen. And the strength of that program is what leads us to commit to increasing that program over the year to come and beyond. So in time, we will solve more clients into that approach where they're getting that I quite like that actually that single docking station for the work that they do with Vp.

Great. probably a broader question, how have staff across the BP Group reacted to both the new CEO and the restructuring over the last year?

Not to take restructuring -- so very restructuring. The hardest thing that you ever do supporting or leading a company is get to a point where you realize that you need to reduce the size of your workforce nobody wants to do that. I do this job because we create great jobs for people. That's what it's all about. And I think that's what makes a lot to feel really proud. So we don't like it when -- there's a need to move in the opposite direction. But -- my role here in our role is to create really sustainable jobs and growth off the back of that. I have -- I just -- I would like to actually just pay huge respect to everyone who's been involved in the Brandon restructure folks who led the company at that point, their support as they did so was remarkable. And I'm very glad to say that we have retained a lot of people by moving them into branches where we continue to trade, so we've kept a lot of our talent. And also mostly grateful for Brandon, particularly our colleagues there, recognizing that this puts branded footing where it has great chances of success. And therefore, there is positivity for what we'll achieve from here onwards. That's not to say it's not difficult and being very hard for people -- but we've been really clear about why it needs to be done, and I'm really grateful for our colleagues who have made that happen and are constructively building a slightly different Brandon the future.

Yes, in terms of you see Wow, what I guess how he showed a slide earlier, there was a kind of standing on the shareholders of James kind of side and building on what's going to be find analysis, you'd call it evolution rather than revolution. And I think that's gone down really well in Tamar. -- you like working with a -- on that 1 Yes, yes. Yes.

If I can just briefly come back to Brandon again and maybe from a different perspective. How have customers of brand and reacted to the restructuring program.

Yes. We're still in the midst of ensuring that we retain all of our customers through that. It's -- we need to make sure that we do provide that support as we change. And obviously, it takes time for people to notice that we changed our operating model. We started this in November. We completed the change of the branch network a couple of months ago. We're still ensuring that we pull our customers with us in that journey -- that said, we've had a really positive relationship, particularly from our larger and our strategic customers. We were very concerned that they would worry about their favorite depot is very long. But the reality is 40 depots across the U.K. gets you really good coverage. And our customers have recognized that and reacted very positively to the change.

Great. And Keith, I'm going to come on to you shortly, but maybe just a few more questions for Alex. So what progress has been made in simplifying the organization without losing too much of the ability to make decisions at a local level?

It's a great question. I've always worked within divisional structures. And I think that is -- that's something that if you're playing in this role, you always need to keep in mind is that people need to feel empowered to do the right thing. You can't -- and I don't think should try and control everything. So how do we ensure that's in place. I think we do it firstly by putting decision-making in the right place. So for example, being really clear that if someone has an idea for where we should be investing in CapEx, but those ideas and those business cases are coming up to us from the business it's not and it never should be us dictating Well, we think it's a broader by this or that. Those proposals and recommendations should come from the place where the expertise is. I think it also comes from investing in our people, making it clear that we expect people, whether you're a depo manager, whether you're a supervisor, whether you're a divisional leader, we expect you to work at your best, but we'll also invest in you so that you can do that. And we do that because we won't be making decisions and feeling empowered in your job. And so I think there's 2 sides to this. There's both the freedom we give people and the responsibility, but also making sure that they are equipped to play that role and investing in their development and then setting them off running. So both sides of that remain important.

Great I'm conscious we've only got 5 minutes left. So Keith, over to you. We've had a number of questions concerning our debt. Net debt is close to your leverage limit of 2x. Are you comfortable at these levels or actively trying to reduce debt?

Yes. So 2x is an internal level. That's not attached a cover. I think that's important thing saying internal target. In terms of where it is, we do expect that it will naturally fall during the next year. And it doesn't necessarily need any kind of knee jerk reactions to do that. So we will keep on investing into our own fleet. We always prioritize a young and well-invested fleet. So I would like it to come down. We do expect it's come down, but it won't need any kind of significant actions to do that.

And obviously, you mentioned private placing. Are you commercially able to expand on details such as refinancing rates?

I won't give the kind of the complete nitty-gritty. But it's important to appreciate what we are replacing and the time that, that was taken out. So the placements that we are replacing were entered into a long time ago when interest rates were very, very different to what they are today. You'll see U.K. guilds kind of over 5%. So anybody lending, that's the minimum that they will go for. You'll see that we haven't just done a straight up replacement of a GBP 65 million with a GBP 65 million selling PP because we are conscious of those interest rates, we've done a mixture of increasing the size of the RCF. We've got 2 different PPs. There's 1 in sterling, 1 in euros. together as a kind of blend, you're talking around about 6% is that kind of package of every guidance.

Okay. Great. and staying with you, Keith. BP has had a long-standing ROCE target of approximately 15%. Is that still an ambition or perhaps under review?

I think the target still holds. So you go back and look at that chart, we were dare or thereabouts for several years. And this year, this year dips. We do expect that, that will go back up next year. As I said during the presentation, the work that we've done on Brandon during FY '26 should start to improve that ROACE in '27 along with our kind of other growth opportunities. But 15% remains a target.

Great. And across diverse sectors, companies are now starting to report on the impact of raw material and energy price increases stemming from the Iran more. Are you seeing such cost pressures? And if so, can you pass them on to your customers?

Yes, very quickly, conscious at the time. The only 1 of note that we've experienced during the year is around fuel prices. So we have a large vehicle fleet delivering all the equipment around the country. Those prices like everybody else, we've seen those go up that got a buy of we have successfully put surcharges on to our delivery prices, and that has been accepted almost entirely across the board by our customers.

Great. And final question. We do have more, but I'm conscious of the time. So Alice, I can just come back to you. In the context of capital allocation, high how high up agenda is M&A and if high would expand in international be the priority given the success of CPH.

We will always keep an open look at M&A. I think at the moment, -- as I think we said earlier in the hour, it's likely to be at a bolt-on level. So it would be finding an expertise or an asset that we particularly think we could gain an advantage in. Yes. No. I mean I think it's fair to say that we're seeing better tailwinds from some of our overseas markets, and Vp has a long history of operating successfully overseas. So as and when those opportunities come along, we're definitely open to increasing our overseas exposure as we did with CPH.

Great. And sorry to have as we didn't manage to get through all the questions, but hopefully, you've had a really good overview from Alice and Keith. And just leaves me to say thank you very much for your time and that really comprehensive presentation. I'm sure that would have benefited a lot of people. And I look forward to seeing you at the back end of this year for your interims. And just to remind everybody, there will be a question coming up on your screen, so if you could answer the question, that would be most appreciated. And once again, thank you very much.

Thank you, everyone.