The major construction equipment rental firm, VP plc, plans to shower its shareholders with millions of pounds. This is the same company that pocketed a fortune from the furlough scheme.
VP claimed £7 million from the jobs retention scheme that it used until October 2020. At the peak, bosses furloughed up to 1,000 workers.
Construction News website says VP will now pay out £10 million—25p per share—to shareholders. Meanwhile, its workers will receive nothing extra.
It's one in a long line of companies taking state aid and then handing wads of cash to shareholders. In April JD Sports said it would pay out nearly £15 million in dividends.
But it has not offered to return any of the coronavirus-related help it grabbed. That included about £38 million of rates relief.
MPs have wailed for businesses to “act responsibly”. But there is no legislation forcing profitable companies to repay the cash that was handed out.
Other construction firms TClarke and NMCN have also chosen to pay dividends instead of repaying the state or giving pay rises to workers
Chief executive of VP, Neil Stothard says the furlough scheme “did what it was meant to do” and saved jobs. However, VP sacked 160 workers and failed to refill 119 vacant positions during the year.
VP includes brands such as Brandon Hire Station and HS. It made the dividend announcement as it revealed a £2.3 million pre-tax loss for the year.
But this was only because it had to pay a big fine. In December, the Competition and Markets Authority fined Groundforce, which is owned by VP, £11.2 million. This was for “anti-competitive practices” between 2011 and 2016.
With the fine and other one-off items excluded, VP reported a pre-tax profit of around £12.8 million.
Stothard told Construction News that the company was doing well. Infrastructure, general building and house building markets all look buoyant, he enthused.
But he worried there might be a shortage of workers.
The pandemic intensified inequality in society. Now as we are told it is ending, the same process is happening.
It’s time for a fight to stop workers being hit even harder, and to make the bosses pay.