The Harrogate-based firm said annual profits were ahead of market expectations and it has seen a strong start to its new financial year amid a supportive market backdrop.

The pandemic has taken its toll on the firm with revenues falling from £363m to £308m in the year to March 31. Underlying pre-tax profits were more than halved, falling from £47m to £23m. The group made a statutory pre-tax loss of £2m.

However, this was a better performance than had been expected after demand for equipment shrivelled during lockdowns.

Jeremy Pilkington, chairman of Vp, said: “I am pleased to be reporting a set of results that are ahead of our expectations in a year that has seen unprecedented challenges for the business and its customers.

“The past 12 months saw a focus on cash management which delivered a significant reduction in net debt.

“We have exited the year at nearly pre-Covid levels which is a better recovery than we anticipated at the beginning of the pandemic.

“Given that we are reporting results beyond the upper end of original expectations, and reflecting our confidence in the prospects of the group, the board is recommending a final dividend of 25p per share.

“As we look to the future with renewed optimism, I would like to thank all colleagues at Vp for their hard work and dedication throughout what has been the most challenging of times.”

Neil Stothard, chief executive of Vp, added: “The Covid-19 pandemic has brought out the very best in the business against the severest of backdrops and in response to a significant downturn in activity early in the last financial year, we took significant steps to de-risk the business by reducing costs.

“We finished the prior year well and I am pleased to confirm that we have maintained this into April and May of the new financial year, which has started strongly for us.

“Looking ahead, the market backdrop for Vp is positive.”

Mr Stothard said the group’s core markets of infrastructure, housebuilding and construction, are showing positive signs of sustained growth.

He said the group has recaptured a lot of the revenue shortfall and it is now seeing 95 per cent of its pre-Covid revenues.

“We are very pleased with where we’ve got to,” he added.

“At the onset of the pandemic I said that we were entering a period of significant economic uncertainty with an excellent and financially robust business and we planned to exit with an equally strong business, which I believe has been achieved,” he said.

“Vp has proven over time and throughout other economic downturns that its business model can continue to deliver quality, market leading earnings, for our shareholders.

“We are excited about the prospects for the coming year which we approach with increasing confidence.”