Lavendon "resilient" despite weak markets

Revenues at the Lavendon Group fell 13% of a constant currency basis for the first five months of the year, with the UK, Belgium, France and Spain performing worst. In UK currency, total sales fell by just 5% for the five months and the company said its resilience against current economic conditions had improved during the period.

In its pre-close trading statement for the six months to 30 June, Lavendon said its UK revenues had fallen by 17% and that trading conditions continued to be difficult. The company said, however, that £8 million had been taken out of its UK cost base and that it was being successful in winning new business with major contractors.

Conditions are also difficult in Belgium and France, where local currency rental revenues fell 18% "against a background of reducing demand", although the company said recent weeks had seen an upturn in Belgium.

In Spain, meanwhile, conditions were described as "extremely harsh", with local currency revenues falling by 42% year-on-year. Lavendon said its Spanish operation remained profitable and cash generative.

Performing slightly better was Lavendon's German operation, where sales fell by 11% in local currency (equating to a 2% increase in UK sterling terms), "reflecting the subdued level of demand experienced in recent months".

The Middle East operation, Rapid, continues to be a bright spot. Revenues here grew by 39% in local currency (76% up in sterling terms), with growth driven by new supply contracts across the region. Lavendon said; "The ability to continue to grow revenues will be further supported by the transfer of additional machines to the region during the remainder of this year."

Lavendon said; "The Group's operating cash flows have been robust during the first five months of the year, and, with a tight control over capital expenditure, net debt levels have reduced in line with our plans.

"Whilst market conditions facing our European operations remain difficult, the Group has made good progress in reducing its cost base and is trading in line with our expectations."

Lavendon will report is half year results to 30 June 2009 on Friday 28 August 2009.