Lavendon's first half year turnover falls 7.5% but improvement expected
By Maria Hadlow27 August 2010
The Lavendon Group reported a reduction in turnover for the first half of 2010 of 7.5% compared to 2009, but the company said it sees an improving trend in trading in a number of its markets.
In 2009 the Lavendon Group had a £114008 by the end of the first six months, this year the figure was £105967.
Kevin Appleton, chief executive of Lavendon Group plc said, "Difficult market conditions impacted our trading performance in Europe in the first half, with these being further exacerbated by the extreme adverse weather at the start of the calendar year. However, we have seen progressive improvement in revenue levels through the second quarter, and our European operations, excepting Germany, are all now recording year-on-year revenue growth on a weekly basis.
"The recovery of business levels in Germany, after the effects of a prolonged winter, has proven more protracted than we had anticipated, whilst in the Middle East recent further delays to large projects, particularly in the petrochemical sector, are reducing our rate of volume growth compared to our earlier forecasts."
"Whilst we are confident that the recovery in the Group's trading performance will gather momentum during the second half of the year, we now believe that the timing and rate of recovery being experienced in our German and Middle East markets will be insufficient to enable the Group to meet its overall profit expectations for the year. Nonetheless, we are confident that, due to traditionally strong second half cash flows and our ability to control capital expenditure, the Group is still on track to meet its year end net debt expectations."
The Lavendon Group has extended its network and depots in France and a strong increase in construction-related activities in France has enabled the region to increase its first half revenues. In Belgium market share has been maintained in tough market conditions.
Spain has remained a weak market, with supply of access equipment well above demand, Lavendon says that tight cash control has offset revenue decline.
The company says it sees an improving trend in trading in a number of its markets, although revises full year profit expectations downwards due to slower than anticipated pick up in Germany and continued delays in project ramp-ups in the Gulf
The Lavendon Group believes it remains on track to deliver debt reduction targets due to good operating cash flow and careful management of capital expenditure.