Lavendon Group has announced its expectations of better-than-forecasted results for 2016, following year-on-year rental revenue growth of 8%.
Its home market, the UK, accounted for 46% of its overall rental revenue, which grew 9% year-on-year. The company attributed the rise to increasing market share gains and an improved pricing environment. In the fourth quarter, its UK rental revenues grew 12% and its fleet utilisation reached 77%. The company added that fleet investment and increased efficiency in its machine availability were the factors for growth.
The company’s second biggest market was continental Europe, which contributed 28% of total rental revenue for 2016. This market grew 2% year-on-year, with its biggest growth coming in the first half of 2016. The company said that growth in France (11%) and Belgium (1%) offset its loss in Germany of 3%.
Lavendon added that the performance of its German business was disrupted by the restructuring programme undertaken during the year, but said it successfully recovered the operating losses reported in the first half, while the business returned to profit for the year as a whole.
In the Middle East, which accounts for 26% of Lavendon’s total rental revenue, the company experienced growth of 16%. It said fleet utilisation levels reached 81% in the fourth quarter, as growth from its operations in in the UAE, Kuwait, Oman and Qatar continued to offset a decline in its higher margin Saudi Arabian business.
Lavendon added, however, that its net debt levels had risen to £141 million (€161.77 million).
The company is currently subject to bids from TVH and Loxam, with TVH leading the way with its offer of 261 pence per share – one pence higher than Loxam latest offer.
Don Kenny, CEO of Lavendon, said, “The group has delivered a strong performance in 2016 with growth in revenues driving increased profitability and margins. As a consequence, the board now expects the group’s results for 2016 to be ahead of its expectations.
“As we move into 2017, whilst recognising the uncertainty in the macroeconomic outlook, the group is well placed to build on the momentum developed during the past few years and to make further progress in the year ahead.”