Welcome everybody. 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, March 2026. As Rachel said, my name is Alice. I'm the incoming CEO for Vp. I joined in February.
Yeah. Hi everyone, I'm Keith. I've been here a while, hello again.
The picture that you've got in front of you is a good example of the work that we do. 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 past our kit. Whether that's roadway cameras that are used in surveying works, people working in buildings will fit out. This is the Vienna Metro, it's an example of what our Groundforce division does. What you can see there is what we call shoring equipment, which keeps those enormous spaces open and safe to work in for our construction colleagues. 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, including a couple of areas where I think you might be more interested, because they've been a fair part of our performance conversation over the last few months. Over to Keith for a review of the financials, back to myself. We'll then look a bit at the markets that we're in and how they're doing, a forward look in terms of our strategy and medium-term plan. As Rachel said, this is my first year as our CEO, 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.
I got my first P&L role within Compass Group, a big catering provider internationally and in the U.K. I had a number of P&L leadership roles there for different divisions. About five years ago, I moved over to Mitie, which is a facilities management company, and did a lot of work, particularly in places like schools and hospitals, supporting with engineering teams in those buildings. My background is B2B. I love practical stuff, I love things like 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 I particularly love 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 Vp 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. That's a bit about my background. Let's move on to highlights for Vp's year just gone. Starting with some of the strategic elements, I'm really pleased to say that the restructuring program for our Brandon Hire Station division has now been completed. This is something that we announced back in November. It involves reshaping and resizing Brandon and moving it much more towards being a B2B and a strategic customer supporting division.
I'll talk about that in a bit more detail in a minute, that restructuring is done, that's thumbs up on that one. Also on the strategic side, we have a digital roadmap that is supporting our developments and some of our margin opportunities as a company. 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. Our best prices are going to the right places within our customer set, and we're already seeing, in the first division we've put that in, we're already seeing that supporting our margins. That's really positive news for us, and that roll-out continues into the year that we're in now.
We're also in the midst of developing a strategic plan, a 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 scene, reasonable number of headwinds. 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. We did take a step down, but we've delivered against 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, for a lot, I think, more supportive markets and hard work being done to take advantage of those. We continued to invest in our fleet.
We pride ourselves in having a high- quality, relatively young fleet. 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 a bit about some refinancing activity that gives us that strength and resilience. Our confidence in the underlying fundamentals of what we're doing and the health of the business for the future means that we are happy to maintain our dividend at GBP 0.395 per share. That's what it was full year last year, and that's what it will be full year this year. Little bit on the markets with more to come later. Water has seen a bit of a choppy start to the investment cycle that we're in in the U.K. That's called AMP8.
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 columns, and rail. In construction, our other big markets, specialist construction has been good, and general construction has been more challenging. Two 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. That gives us some highlights. As I said, I did just before I hand on to Keith, want 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 up front. One is our restructure of the Brandon Hire Station business.
Brandon Hire Station does 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. Also, unfortunately, that did mean a headcount reduction. What that would mean is that we enter this year with a tighter business that is totally focused on B2B, so just trade customers. That's exactly where we've got to. Everything that we said we would deliver back in November has now been done. That's a big tick against that plan, and you can see the key elements of it bottom left. From this point onwards, we don't have any consumer business going through Brandon. I can't, for example, ring them up and put an order in. They're not going to take cash transactions.
Everything's being done through trade accounts. Because we've done this, it reduces the volume of Vp's revenues overall that are going through general construction. It pivots us that little bit more towards our specialist sectors. 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. That's good for the group as a whole. It means that for the future, Brandon is going to focus on providing wraparound equipment support for our most strategic customers. 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, loos, 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 of four years. There's a cash cost, total cash cost of GBP 21 million, and we've gone about half of that in the year just gone. I should just highlight that the last time you would have heard from us, that cash cost was somewhat lower at GBP 16 million. It has gone up a bit. 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. We still target that four-year payback. That's on Brandon.
Now we'll move on to second area I wanted to do a deep dive on before we go back up to the financials, and this is the water sector. 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. weren't coming through as rapidly as we had thought they would. It's worth, I think, as we get to the end of the year, we're what? Sort of three, four months further on now, just updating you on that. 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, five-year cycles. We're in AMP8 at the moment, which runs 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 ran to 2025. There's a big opportunity for us. We're in year two at the moment. We would expected our pickup in revenues, you can see the revenue curve that we expect, bottom left, would have expected that to be a bit bigger a bit earlier. We think that planning constraints and people getting going with the design stage on these very big projects has perhaps slowed us down a bit. There is a significant opportunity to come through from here onwards. Then the right-hand side, you can see the divisions within our business that mostly engage with water. Good positioning for us with our customer base.
If you look at Vp's top largest 25 customers right across our group, that set of 25 includes all of the major main contractors that are working on AMP8. That will be big tier 1 U.K. construction companies and subcontractors, and we have relationships right across that list. That positions us well. All of that's positive, but let's talk about that slow start that we've had, that's on the following page. Here we can see on the left-hand side that we are really well positioned across these regions. We have all of the opportunity and all of the relationships. That's how some of our divisions show up against the map, where are we working currently. We can also see on the right-hand side that we have had a bit of a mixed picture.
The dark blue bars for the key three divisions that work in water, this is just looking at their water revenues. This shows you, dark blue bars, April this year versus April last year, and those bars, as we said, are moving backwards. 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. We also see seeds of growth here. The light blue bars show the April just gone revenue numbers for those divisions in water, and they compare it to our lowest month. The lowest month happened over the winter, depending on which division you talk about. It was either December, January, or February.
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. ESS is stuff like survey equipment. You're going to get your theodolite 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. Again, it's good to see that business coming through with some more positivity. Summary here is we acknowledge it's been a tougher start than we would like to this investment cycle, we do now see elements of that more positive revenue coming through.
Wanted to head those two off at the pass and then over to Keith on the financials.
Thanks, Alice. We'll go straight to P&L. Brilliant. Against challenging market headwinds, we've delivered a resilient set of results. We have seen some reduced performance, so against our key income statement metrics. 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 smaller 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, it is 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%. That margin impact includes higher U.K. employment costs from the National Insurance increases and minimum wage increases we saw in April last year. It also includes increased technology costs as we continue to progress our digital roadmap. Exceptional items were GBP 30.6 million, I will cover those in more detail on the next slide. Exceptional costs predominantly cover two main areas. The first is the Brandon Hire Station restructure, totaling nearly GBP 25 million. This significant restructuring program covers a few areas. The first is property-related costs of GBP 10.9 million. This is for costs such as dilapidations. Employment-related costs of GBP 7.8 million. This is redundancies, pay in lieu of notice.
Fixed asset impairments, GBP 4.8 million, covering right of use assets and property, plant, and equipment. GBP 1.4 million of other transformation costs covering areas such as professional fees. The other big area is the ongoing accounting for future deferred and earnout payments associated with last year's CPH acquisition. As you can see, GBP 4.6 million. We highlighted these previously, we will continue to incur them until the end of the earnout period in October 2027. All that is on a P&L basis, on a cash basis, we have incurred GBP 11 million of exceptional outflows in the year with GBP 10.5 million relating to the Brandon Hire Station restructure. We expect to incur a further GBP 10.6 million associated to that restructure in future years as we continue to exit our property leases and dispose of our excess hire fleet. Onto the balance sheet.
Our balance sheet positions us well for future growth, we continue to invest back into our hire fleet with investment in a year of just under GBP 52 million. The new row on here this year is assets held for resale. What that is, well, most of it is the excess hire fleet that we identified as part of the Brandon restructure. We intend to dispose of that in the next 12 months. Debtors remains well controlled, DSO and the bad debt write-off levels are consistent with last year. Net debt increased to around GBP 149 million. I will go into more detail on that on the next two slides. Net debt increased by GBP 10.4 million in the year, 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 year before, given the reduction in trading performance. We continue to be disciplined in how we allocate our capital with expenditure focus back into our hire fleet. Outside of this investment, we continue to pay interest and our taxes, we return funds to our shareholders via our dividend, which is uninterrupted now for over 30 years. A quick reminder of our finance facilities. Including our overdraft, we have around GBP 190 million of facilities, these include two fixed rate private placements. We also have a GBP 90 million revolving credit facility, which during the year we extended for a further year, that now matures in November 2028.
Our loans are subjected to 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 2x as our target for going forwards, and we expect that ratio to improve over the remainder of FY 2027. Post-year end, in advance of the GBP 65 million private placement maturing in January 2027, 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 their five-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.
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 fleet investment did decrease, though, from around GBP 65 million to just under GBP 52 million, as we prioritize CapEx into those areas that either deliver the best returns or have the highest growth potential. The two charts underneath the table give a little bit more insight into where we've targeted that investment. The left-hand set of charts split CapEx by geography. You'll see there's quite high weighting of that CapEx towards Ireland and Germany. Whilst these currently only represent a relatively low proportion of the group's revenue, they remain key growth geographies for us. 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 correct growth potential, or don't align fully with the group's core strategy. 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, what we put in around GBP 8.5 million of CapEx, and that was predominantly to support the CPH acquisition from the year before. 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 portable trackway 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 2027 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. The top chart shows our historic returns, and other than during COVID, this year stands out as a bit of an outlier.
We expect those returns to improve in FY 2027, given our strategic progress across areas such as the Brandon transformation and also our positioning in our growth markets. The bottom chart shows our dividend story with that dividend stretching back over 30 years. While we will see a reduction in cover, the Board has recommended a final dividend of GBP 0.28 consistent with last year, reflecting the Board's confidence in the underlying fundamentals of the business. 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 Hire restructuring has shifted the group's weighting away from general construction towards the 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 that deliver the highest returns and the geographies that show us the highest potentials. Alice.
Okay, two sections to go. Some time now on our operations and the markets that we work in, and then we'll move on to strategy, some of which is achievement and some of which what we'll be doing next. On our markets, this page gives you a view of the four markets that we operate in. The two on the left obviously being much more significant in terms of that share of revenue. That revenue share, that's Vp's revenue split between those four. That revenue split hasn't really moved materially year-on-year. That's pretty stable. We'll go through each of these four one 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.
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 more positively about the areas where we are investing more. We are pivoting our business towards those more positive markets. I think you'll see a sense that the forecast for the year to come is relatively balanced across these four areas where we find our revenue. We'll start with Infrastructure. Here, this is one of our largest segments. Almost 40% of our revenues come from infrastructure, and in fact, for five of Vp's divisions, they make the majority of their revenues in the infrastructure market. There are parts of Vp where this really is a critical part, a critical element of our revenue mix.
We benefit in infrastructure from big programs that we can latch onto and sell into, they're overlapping, and they're not particularly correlated to each other. Examples of this would be we've spoken about the U.K. water market, where we are in year two of five of the U.K. AMP8 investment cycle. U.K. Rail, that's investment program CP7, we're in year three of five. Over in Germany, where we've seen transmission doing well, the German NEP program, that's in year two of 12, a different time horizon. 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. That's helpful to us in terms of diversity of sources of revenue. Just to go through the key subsections within infrastructure.
Transmission, reasonable performance both in the U.K. and Germany in FY 2026, particularly in Germany. That big 12-year investment program is really starting to come through, we expect that positivity to continue into the year to come. Water, we've done in a bit of depth, won't go through it in detail here. As we said, we were somewhat disappointed by the revenues in FY 2026, we do see that ramp up into AMP8 coming towards us, and a lot of spend for us to go after. Rail, CP7 has given us steady progress. That's largely working directly with Network Rail. We've also seen the benefits of a pipeline of activity that goes beyond the core U.K. rail network, outside of Network Rail, effectively. That's things like working on Sizewell C, upcoming work with the Manchester Metrolink, which is great to see.
HS2 actually continues to be a source of revenues as well, we're seeing there the benefits of us having set up something called Vp Rail, which is the part of Vp that now specifically targets sales opportunities in the rail area. It has helped us to gain a foothold in some of these projects beyond Network Rail, that gives us some revenue upside. We expect that positivity to continue. 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 two halves. Within construction, we have Specialist Construction and General. We start with Specialist. We've seen good progress in terms of revenue on Specialist Construction, that's driven geographically by both the U.K. and Ireland. In terms of what kind of sub-sectors do we mean?
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 route into Europe. Data centers is coming through as part of specialist construction. MEP, that's our division that does work inside buildings on fit-out. If you imagine people on scissor lifts, those kind of things, working at height, but inside a building. They might be doing plumbing, HVAC, lighting. That trade is all represented within Specialist Construction, that's been doing well with, for example, some of the big refit projects that are happening in London. We spent much of the last year supplying equipment into the Citibank Tower in Canary Wharf, which some of you may be familiar with. Huge refit, we have been on-site there providing equipment for a significant amount of time.
We expect specialist construction to continue to look positive into the future. Some of those sectors, sub-sectors, I guess, within Specialist Construction are looking good. 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, we've spoken about that not being our strongest market, and that's fueling our decision to restructure that business. It has been a dampened market, and we see that reflected in the world around us. For example, we track the S&P Purchasing Managers' Index within construction. That has been in negative territory, signaling declines for the entire year, FY 2026. It remains in the negative now, which is not particularly positive. Obviously we need to be exercising self-help.
What do we do there? We have put the Brandon restructure in place. That reduces our exposure to this market. We continue to pivot that part of our business towards our more strategic customer options. We do expect that the general construction market will remain quite muted for the year to come. Again, that game of two halves in construction leads us on to our last two markets, and these are both on the next slide. Housebuilding on the left and energy on the right, and they are much smaller, respectively 7% and 8% of Vp's revenues. Housebuilding is subdued but stable through the year we've just had. I think you'll be well aware of the challenges facing the U.K. Housebuilding market, of course, we are impacted by those.
Our customers in housebuilding, 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 one of them. Looking ahead, when we do get recovering volumes in housebuilding, we expect to grow with that. There are elements of help coming in during the year that we think will be supportive. For example, Homes England, the government body, that starts writing grants under its affordable housing program in the second half of 2026, that will help some of our customers increase their build volume. We see those as positives, we do see that it's going to continue to be a muted sector for us for the year to come. Energy. A lot of this sits within our Airpac division, supporting largely the oil and gas sector.
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, also because it just creates uncertainty in global oil prices, that doesn't help our customers plan their projects particularly well. We've seen some impact there. 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. For example, in Germany, our TPA business, the roadway business, that also does some work supporting the erection of wind turbine masts, that has been a positive for us in the year just gone.
Again, that obviously is a mega trend that we continue to see run towards our renewables infrastructure, there is some offsetting benefit from that. That gives us a bit of an overview of where we are from a markets perspective. Last thing we're going to do is just spend a bit 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 is 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.
I've worked for years in B2B, and I'm used to having conversations with customers and them being quite demanding, 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. 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. I think specialist can be a difficult word because what does that mean? This page tries to make this as clear as possible.
Our divisions are all mapped on this grid, we obviously have some divisions who work internationally, some who work in the U.K., and two that do both. They're all specialist, but in a couple of different ways. We have some divisions that are fleet specialists. Forks is a great example of this. Mostly U.K. Forks is a fleet of telehandlers, so those are the machines that run about on a building site moving materials. We are very focused on that piece of equipment as the thing that U.K. Forks supports, and we know, quite frankly, everything about that kit, how to make it function well in the field. Groundforce, you saw that picture on page one. That's largely a shoring and piling business, so those really heavy pieces of metal that play that really critical job in major projects, that's what they're all about.
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. On the right-hand side, we've got parts of Vp that are activity specialists. This is where if you went to a depot, you'd find a wider range of kit, but it all supports a particular trade, a particular activity on site. MEP 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. ESS and Tech Rentals, they largely do the same thing but in the field of survey equipment and comms equipment and safety equipment.
Again, you can imagine that that's a bit of a wider range of kit, but it's all about supporting a specific activity and doing it really well. That means, for example, it also gives us a foothold into training, which we also do through ESS. We know this activity really well. We also train the operators who go out into the field and use our equipment. That's our strategic foundation and will remain so. I'm going to spend a couple of minutes now talking about where Vp is today and grounding that in our history. Vp has a really long history, over 70 years. I think it's been important for me coming in understanding how that history plays into our opportunities today.
I sort of see it in three different waves. Vp spent a very long time, so on the left there, building a series of expert businesses, that's what we talked about on the previous page, who really know what they're up to, and critically, some very long-term customer relationships. We have customers that we have worked for 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, and particularly under my predecessor, Anna Bielby, there was a lot of work done creating strong group strength and resources. 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. That gets us to where we are today with that 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. 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. Also find those ways of getting synergies across our division. That's about having more of a Vp way of doing hire.
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 previous years and previous decades. There is one more element of 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. If we flick on a slide, this shows us Vp's profit performance over the last few years, so 2023 into 2026, which is that number that you'll recognize we've just delivered in the year just gone. Vp's profits went down over this period, 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. I've looked into this, and the story that I've found is one I think we should be telling, because it also tells us about Vp sources of strength. 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 three years. It's fairly material, and that is why in the year just gone, Vp has really addressed that head-on, put that restructure in place, and transformed Brandon so that it can play a different and more successful role in the future. Yes, there was a problem there with one of Vp's divisions, and it has been addressed.
On the right-hand side, these blocks for me are all about how Vp has built a really strong foundation for the future. 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 in Ireland. That business is doing well and is settling very well into Vp, and you can see the benefits of that come through to the group. We've got an investment block. 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 roadmap, and I'll talk in a second about the impact that that's having.
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. We need that digital roadmap, and that investment shows up in our numbers. I do think it means that where we are now at the start of FY 2027, we have all of the benefit of that investment supporting us as we seek future places to find value growth. I think it's a story we should tell, we should be open about, because it sets us up for the future. If we pivot from where we've been to where we go, this page, 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 enablers. I'm here to continue that strategy. I think it's a good one. It absolutely points us in the right direction. There's no revolution going on here, but there is evolution, and the evolution is those five pillars that sit underneath our strategy themes. 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. Specialist expertise that delivers. As I said, when I've talked to customers, they really talk a lot about the power of our expertise and how that stands out.
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. We've had success, as I said earlier, with Vp Rail, with a real sector lens on sales. We will do that with more sectors in the year or so to come. Under operational excellence, we'll talk more about the strength of our group and the power of our divisions. Our divisions are experts in what they do and have autonomy in the way that they bring that to market.
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. We'll work on that. Performance you can rely on. This is about having really clear KPIs, indicators, ways of reporting, including reporting to you on how we're doing, and a bit more transparency there. You should expect to see that coming through from us. Evolving to meet the future under our enablers. Safety absolutely is my first priority and the first priority of everyone working at Vp. 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 with more to go. This is so essential to our business. When we talk about expertise, it's really the people that make it expert.
Of course, we need to be an ESG and a social value leader. We have very large, very prominent customers who expect that of us, and we're proud to play that role. These are five 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. I am never 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. I do want to give some confidence around, well, what are we doing now under those five headings. On the left, one and two under 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 gone, and Vp Rail is doing really well. Three and four 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. Under performance you can rely on, again, data is always really important and something we've delivered in the last year is much stronger carbon reporting at the item 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. Spoke about that price- quote tool going live as part of our digital roadmap. 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. We are making progress against all of these areas already. 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 highs and lows in the results, but the international profit growth has been a real positive. 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 five pillars that we've just shared. That brings us to the end. Rachel, I think back to you for questions.
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, apologies in advance. I'm probably going to go quite fast and try and get through as many as we can. If we just crack on with those. What do the two of you see as the biggest growth opportunity for Vp in the medium term?
Great question. I think for me, I think we need to make the best use of our geographic mix. We're not just a U.K. company. I think that's become really clear in our latest set of results, I think we need to go where the opportunities are. 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, 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. I think we will continue to focus our investment in those areas.
Yeah. The only thing I'd add to that, Rachel, is the work that we're doing that you would call, that you generally call kind of self-help, where we are doing what we can internally in terms of standardization, going to market as a Vp or a kind of single kind of docking point for some of our big strategic, so that as well.
Great. Thank you. 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?
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. The strength of that program is what leads us to commit to increasing that program over the year to come and beyond. In time, we will fold 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. Thank you. Probably a broader question. How have staff across the Vp group reacted to both the new CEO and the restructuring over the last year?
Hard to take restructuring. CEO point to keep. Definitely the 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 of us feel really proud, so we don't like it when there's a need to move in the opposite direction. My role here and our role is to create really sustainable jobs and growth off the back of that. I would like to actually just pay huge respects to everyone who's been involved in the Brandon restructure. Folks who left the company at that point, their support as they did so, was remarkable.
I'm very glad to say that we have retained a lot of people by moving them into branches where we continue to trade. We've kept a lot of our talent, and I'm also immensely grateful for Brandon, particularly our colleagues there, recognizing that this puts Brandon on a 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 been very hard for people. 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 for the future.
Yeah, in terms of new CEO.
Exactly.
Wow. What a —yeah. Okay. I guess Alice showed a slide earlier that was a kind of standing on the shoulders of giants kind of slide, and building on what's gone on before. Alice's, you'd call it evolution, rather than revolution, and I think that's gone down really well internally.
It is—
[crosstalk]
[crosstalk] like working with me.
That one.
Yeah.
Yes.
Okay.
If I can just briefly come back to Brandon again, and maybe from a different perspective. How have customers of Brandon reacted to the restructuring program?
We're still in the midst of ensuring that we retain all of our customers through that. We need to make sure that we do provide that support as we change. Obviously, it takes time for people to notice that we've 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 put our customers with us on 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 isn't there any longer. The reality is 40 depots across the U.K. gives you really good coverage. Our customers have recognized that and reacted very positively to the change.
Great. Thank you. Keith, I'm going to come on to you shortly, but maybe just a few more questions for Alice. 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. I think that's something that if you're playing 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. How do we ensure that's in place? I think we do it firstly by putting decision-making in the right place. For example, being really clear that if someone has an idea for where we should be investing in CapEx, that those ideas and those business cases are coming up to us from the business. It's not, it never should be us dictating, "Well, we think it's a brilliant idea if you buy this or that." Those proposals and recommendations should come from the place where the expertise sits.
I think it also comes from investing in our people. Making it clear that we expect people, whether you're a depot manager, whether you're a supervisor, whether you're a divisional leader, we expect you to work at your best. We'll also invest in you so that you can do that. I think there's two sides to this. There's both the freedom we give people and the responsibility, also making sure that they're equipped to play that role and investing in their development, then setting them off running. Both sides of that remain important.
Great. Thank you. I'm conscious, we've only got five minutes left, so Keith, over to you. We've had a number of questions concerning debt. Net debt is close to your leverage limit of 2x . Are you comfortable at these levels or actively trying to reduce debt?
Yeah. Two times is an internal level. That's not attached to our governance. I think that's the most important thing to say, an 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. We will keep on investing into our own fleet. We always prioritize a young and well-invested fleet. I would like it to come down. We do expect it to come down, but it won't need any kind of significant actions to do that.
Okay, thank you. Obviously you mentioned private placings. Are you commercially able to expand on details such as refinancing rates?
I won't give the complete nitty-gritty, but it's important to appreciate what we are replacing and the time that was taken out. The placements that we are replacing were entered into a long time ago when interest rates were very different to what they are today. You'll see U.K. gilts are kind of over 5%. Anybody lending, that's the minimum that they would go for. You'll see that we haven't just done a straight-up replacement of a GBP 65 million PP with a GBP 65 million PP because we are conscious of those interest rates. We've done a mixture of increasing the size of the RCF. We've got two different PPs. There's one in sterling, one in euros. Together as a kind of blend, you're talking around about 6% as that kind of package of refinance.
Okay, great. Thank you. Staying with you, Keith. Vp 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. You go back and look at that chart. We were there or thereabouts for several years. 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 2026 should start to improve that ROCE in 2027 along with our kind of other growth opportunities. 15% remains a target.
Great. Thank you. Across diverse sectors, companies are now starting to report on the impact of raw material and energy price increases stemming from the Iran war. Are you seeing such cost pressures, and if so, can you pass them on to your customers?
Yeah, very quickly, conscious of the time. The only one of note that we've experienced during the year is around fuel prices. We have a large vehicle fleet delivering all the equipment around the country. Those prices, like everybody else, we've seen those gone up. We have successfully put surcharges onto our delivery prices, and that has been accepted almost entirely across the board by our customers.
Great. Thank you. Final question. We do have more, but I'm conscious of the time. Alice, if I can just come back to you. In the context of capital allocation, how high up your agenda is M&A, and if high, would expanding 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. Look, 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. As and when those opportunities come along, we're definitely open to increasing our overseas exposure as we did with CPH.
Great. Thank you, guys. Sorry to our viewers, 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. I look forward to seeing you at the back end of this year for your interims. Just a reminder, everybody, there will be a questionnaire coming up on your screen. If you could answer the question, that would be most appreciated. Once again, thank you very much.
Thank you.