17.04.2014

Strong start for Lavendon

Powered access rental group Lavendon has reported a strong first quarter with rental rates up eight percent and revenues up 10 percent.

The strongest growth came from the UK, France and the Middle East, with revenue growth of 10, nine and 13 percent respectively. Belgium was four percent, while Germany slipped back three percent, on higher utilisation, but lower rates.

Net debt increased from £97 million at the end of 2013 to £108 million at the end March, as new equipment was added to the fleet.

The company will tell shareholders attending today’s Annual General Meeting that the buoyant start to the year gives it increased confidence of meeting, or beating, its forecasts for the year, with improved margins and profitability, while all of its capital expenditure for the years will come from cash flow.

Chief executive Don Kenny said: "The group's first quarter performance was encouraging, with an underlying trading improvement being seen across nearly all our markets. In particular, the revenue growth in the UK, France and the Middle East has been strong, driving improvements in our profitability and margins. Whilst recognising the continuing economic uncertainties in our European markets, the board is confident of making further progress during the year and delivering its expectations for 2014."

Vertikal Comment

It is encouraging to see such a positive report from one of the first rental companies in Europe to report on the first quarter. It is true that some of the percent growth is down to comparison with a dreadful winter in 2013, compared to an amazingly benign one in 2014. However the fact that much of the growth is rate driven is highly positive for the industry as a whole.