Lavendon confident for 2014
18 November 2014
Rental company Lavendon said it was confident of delivering its expectations for the full-year after reporting growth for the first nine months and third quarter.
In an interim management statement, the company said rental revenues increased 6% in both the third quarter and for the first nine months of the year on a constant currency basis.
At actual exchange rates, it said its total revenue and rental revenues for the nine month period, excluding ex-fleet equipment sales, increased 3% year-on-year.
It said this revenue growth was driving improved profitability and margins, but did not provide figures.
Some territories performed better than others. In the UK, which contributed 47% to total group rental revenues, year-on-year growth stood at 8% in the third quarter.
This represented a slowdown compared to the second quarter of this year, when 11% year-on-year rental revenue growth was reported, while 10% growth was reported in the first quarter.
Lavendon said lower year-on-year volumes had hit the UK result, adding, “The shift in demand seen this year, away from high volume smaller machines towards larger higher revenue generating units, is expected to continue over the balance of the year and is an indication that the commercial and industrial construction sectors we serve continue to recover.”
The Middle East business – which contributed 20% to overall rental revenues – reported 15% year-on-year third quarter growth, following 13% growth in both the second quarter and first quarter.
Lavendon said the market outlook for the Middle East continued to be positive, adding “We are currently planning to deploy additional capital into the region as we move into 2015.”
Meanwhile in Germany, which contributed 18% to overall rental revenues, a decline of 2% was recorded for the third quarter.
This was an improvement on the 9% rental revenue decline seen in the second quarter, and 3% decline recorded in the first quarter. Lavendon said its German business returned to revenue growth towards end of the third quarter.
In France, which contributed 10% to overall rental revenues, growth stood at 9% in the third quarter, compared to 7% in the second quarter and 9% in the first quarter.
Belgium, which contributed 5% to the overall figure, reported a decline of 9% in the third quarter, compared to a 21% dip in the second quarter and 9% drop in the first quarter.
Chief executive Don Kenny said, “It is encouraging to see the growth in group revenue driving improvements in our profitability and margins, and at the same time delivering a better return on our capital employed.
“The board remains confident of delivering on its expectations for 2014, despite the FX headwinds on our overseas earnings and the continuing economic weakness in our Continental European markets."