Lavendon Group’s revenue for 2015 increased by 3% compared to 2014, with rental revenues increasing by 2%, based on a constant currency basis and excluding ex-fleet equipment sales.
The UK returned to year-on-year revenue growth in the fourth quarter at 1%, said the access equipment rental specialist, although overall for the year rental growth was down by 1%.
The rate of revenue growth in the Middle East accelerated by 10% in the fourth quarter, compared to the same period last year, driven by increased utilisation of an enlarged fleet. For the year whole the company saw a 10% rise in the region, which was driven particularly by Qatar and the UAE, despite the increased pricing pressure in the Saudi Arabia market.
“Whilst cognisant of the changing political and economic climate within the region, the overall current outlook for our business remains positive” said the company in its statement. “Any further allocation of capital to support our business will be undertaken in a controlled manner, recognising the returns required, so that we retain flexibility to respond accordingly to changes in market conditions.”
Rental revenues in Continental Europe demonstrated growth in the fourth quarter, as increased volumes continued to drive revenue growth in France, up 13%, and Belgium, up 11, while Germany also returned to year-on-year growth of three 3%, compared to the fourth quarter in 2015. For the year Continental Europe saw a 3% rise over 2014.
Lavendon’s return on capital employed (ROCE) improved, it said, and remains above the its weighted average cost of capital, albeit with the rate of year-on-year progress being tempered by its previously announced accelerated fleet investment of £20 million in the final months of the year.
As expected, the group’s net debt level as of 31 December 2015 increased to UK£124 million, on a constant currency basis, relative to £90 million at the end of 2014. At actual exchange rates, the group’s net debt level at the end of 2015 was £119 million.
Don Kenny, chief executive of Lavendon, commented, “The group has delivered an improved year-on-year performance, with growth in revenues and further operational efficiencies driving increases in profitability, margins and ROCE.
“The Board expects the group’s results for 2015 to be at the top end of market expectations. As we move into 2016, whilst recognising the recent increase in uncertainty of the economic outlook, we are looking forward to building on the momentum we have developed during the past few years and to making further progress in the year ahead.”