Lavendon confident after positive first half

UK-headquartered powered access rental company Lavendon Group said it was confident that it could deliver on expectations for the full-year after reporting increased underlying revenues and operating profit for first six months of 2014.

Underlying revenues stood at £117 million (€148 million) for the six months to 30 June, up 3% year-on-year, while rental revenues increased 4% to £112 million (€141 million).

Operating profit was up 7% compared to the first half of 2013 to £14.9 million (€18.8 million).

The company said its improved performance reflected actions taken to re-energise its UK business towards the end of 2013, as well as a strategic decision to deploy additional capital into its Middle East operation.

It said the strength of the improvement in these two key businesses had more than compensated for the continued weakness in some of its continental European markets.

During the first half, a total of £21.4 million (€27 million) was invested in the group's rental fleet and operational infrastructure, compared to £27.4 million (€34.5 million) during the same period last year.

Lavendon said it planned to invest around £55 million (€69 million) for full-year 2014. It said this included the expansion of its Middle East rental fleet and “substantial refreshment” of its European rental fleet – it said almost 1,600 machines would be replaced in 2014.

The company said it also planned to further develop its BlueSky range of machine attachments.

CEO Don Kenny said Lavendon made good progress in the first half of the year, despite increased exchange rate headwinds on its overseas earnings.

"Trading since the half year has remained in line with the Board's expectations, and, whilst recognising the continuing economic uncertainty in our continental European markets and the strength of Sterling, the Board is confident that the group is well positioned to deliver its expectations for 2014 and substantial shareholder value in the medium term," he said.