Despite strong stock market performance in 2024, I’m still looking for discounts to add to my Stocks and Shares ISA. And through the London Stock ExchangeInvestors like me are seemingly spoiled for choice, especially in certain sectors like construction.

One company that doesn’t seem to be getting a lot of love lately is Vice President Plc (LSE: VP.). The equipment rental company is one of several companies that have seen their market capitalization decline due to rising borrowing costs. Delays in construction projects, as well as some management errors, caused shareholders to suffer a 40% loss over the past three years.

However, with a new CEO at the helm and improving macroeconomic conditions, current low valuations could provide a lucrative opportunity to achieve a 6.5% dividend yield.

The Vice President’s Elephant in the Room

A few months ago, Vp published its final results for the 2024 financial year, ending in March. From a revenue perspective, the company has proven to be quite resilient. While turnover fell 0.8% from £371.5 million to £368.7 million, it performed better than some of its competitors in turbulent market conditions .

Unfortunately, it was the bottom line that caused the most concern, with pre-tax profits falling by 91%! The culprit is Vp’s Brandon Hire Station company. The company previously acquired this business in 2017 for £41.6 million. And from the start, problems began to emerge with £5.8 million in extra exceptional costs.

After being left to fester for years, Brandon’s problems finally boiled over, leading to a £27.7m impairment charge which sent profits plummeting. To be honest, this is a non-cash expense, so cash flow remain unchanged. But this shows that not all growth acquisitions are profitable, and Vp definitely made a big mistake seven years ago.

That said, new CEO Anna Bielby appears to be taking the necessary steps to resolve the issues. Brandon now has a revamped management team and underperforming branches are being closed.

Return to growth

Long-term demand for equipment rental from the construction industry has continued to increase over the past decade. And it’s a trend that’s likely to continue, given that it’s much more profitable for builders. Yet the short- and medium-term prospects for vice presidents are also starting to look more encouraging.

The new UK government’s budget announced a series of investments in infrastructure and construction which Vp intends to capitalize on. And even if the residential construction market is currently fragile, an overhaul of the building permit process could change the situation in the years to come.

This means that 88% of Vp’s current revenue streams appear poised to benefit from long-awaited growth tailwinds. And provided that we no longer put obstacles in the way, the current attacker of the company price/earnings ratio the ratio of 8.8 suggests great share price upside potential for my Stocks and Shares ISA.

That’s why I’m keeping a close eye on this company. Given its previous mistakes, I’d like to see more progress in earnings expansion before adding shares. However, for investors who accept more risk, Vp stock may warrant a closer look.