Satisfactory first half for Lavendon
By Euan Youdale16 July 2015
Lavendon Group has reported an encouraging year so far with growth in all its regions, except the UK, and a satisfactory overall revenue growth.
In the first half trading update the group gave an indication of what can be expected from its complete half year results to be released on 28 August.
It said group revenue for the six months up to 30 June increased by 3% on a constant currency basis and excluding ex-fleet equipment sales compared with the same period last year, with rental revenues increasing by 1%.
In the UK Levendon saw a drop in rental revenue of 2% - the UK is its biggest regional segment contributing 47% of total revenue. The rest of continental Europe showed a 2% increase, year-over-year, however, and the Middle East continued its rise with an 8% increase in revenue.
Concerning the UK, the company said the figure reflected a gradual improvement in revenue performance driven by a more favourable mix of machines on hire and better pricing, broadly mitigating lower year on year volumes.
Higher volumes in the Middle East have continued to drive strong growth in revenues. The overall outlook for the region remains positive and we continue to allocate additional capital to expand its fleet.
Rental revenue in Continental Europe improved in the first half, said the company with strong growth in France of 14% and a return to growth for Germany with a 2% increase, offsetting the anticipated revenue decline in Belgium of 7%.
The company is increasing its level of fleet investment, principally in the UK and the Middle East, bringing forward UK£20 million of investment from 2016 into the current financial year.
As expected, the group said its net debt level increased to £104 million for the period, on a constant currency basis, relative to the £90 million at the end of the previous half year. At actual exchange rates, debt for the first half of 2015 was £97 million.
Don Kenny, chief executive of Lavendon, "The board remains confident of delivering further progress during the current year. Furthermore, to build on this momentum, we are accelerating the investment in our fleet over the final months of this year to ensure we are well placed to respond to improving market conditions as we move into 2016."