Lavendon makes most of rising markets

27 February 2014

Lavendon Group has reported strong growth in the Middle East and France, as well as improvements in the UK market in its preliminary full year results for 2013.

Overall group revenue grew 1% to £237.5 million pounds in the financial year ending 31 December 2013, compared to the previous full year.

Underlying operating profits increased to £35.3m, with margins stable at 14.9%, while profit before tax increased 14% to £30 million and earnings per share rose by 12% to 14.42 pence.

The results were characterises by the fore-mentioned growth in the Middle East and France and improving revenue in the UK, but German progress was disrupted while restructuring plans are completed in the country, said the company.

Don Kenny, chief executive of Lavendon Group, said, "Our decision to deploy capital into those markets that offer superior growth opportunities and the successful implementation of our three year operational efficiency plan has continued to drive strong growth in our earnings.

"The proposed increase in our dividend (up 29% to 3.55p) reflects both our strong cash flows and the board's confidence in the group's future."

Mr Kenny continued, "With the first signs of improving market conditions emerging in the UK, our primary focus is on revenue growth in our key markets. With a more efficient business model established, we are well placed to drive revenues and deliver further earnings growth and improvement in our ROCE."

Return on capital employed (ROCE) declined by 10 bases points to 10.6%. But the company delivered operational efficiencies of £5.2 million over the last three years, ahead of expectations.

"Trading since the year end has been in line with the board's expectations, and we believe the group is well positioned to deliver another year of financial progress and substantial shareholder value over the medium term," concluded Mr Kenny.

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