Growth in Middle East and France for Lavendon
16 January 2014
Lavendon Group has reported flat rental revenues for 2013 and said it was confident that profit would reach expected levels, with growth in France and the Middle East offsetting shrinking revenues in the UK, Germany and Belgium.
In Germany “teething issues” with the implementation of a new IT platform in the third quarter led to a 13% fall in the final three months of 2013. That, and generally more competitive pricing through the year, led to a 7% reduction for the full year. It said the IT problems had been resolved.
Lavendon’s trading statement, in advance of the full annual results, reported a 21% increase year-on-year for the Middle East, although quarterly growth rates were reducing with each successive period, reaching 6% growth in the fourth quarter.
The company said the outlook for the region remained “very positive, although the more onerous regulatory environment, particularly in Saudi Arabia, is slowing the progress of some projects”. Sales in France were up 7% for the year.
Revenues were down 4% in the UK, but improving through the year and “starting to gather momentum as we move into 2014”.
The group is expecting return on capital employed (ROCE) in 2013 to be marginally below the 10.7% reported for 2012, mainly because of a decline in the UK's relative contribution to the group's ROCE. Lavendon said it had taken measures in the quarter to address the performance of its UK business, which is operated under the Nationwide Platforms brand.
During the final quarter senior management at Nationwide was changed, with both the managing director and commercial director leaving. Former Aggreko manager Jeremy Fish joined as managing director in December.
Don Kenny, chief executive of Lavendon, said; “During the year, we have again delivered strong revenue growth in France and the Middle East, and, importantly, seen an improving trend in our UK business through both increased volumes and an improved pricing environment.
“The Board expects the Group's results for 2013 to be in line with its expectations, and, whilst mindful of continuing economic uncertainties in our European markets, we are looking forward to making further progress in 2014."
The full annual results for the year to 31 December 2013 will be published on 27 February.