16.11.2010

Lavendon on the rise

The Lavendon Group, Europe’s largest powered access rental company has reported a positive third quarter.

The company has issued its interim statement to update shareholders on business activity since the end of June.

Overall revenues for the four months since the end of June are up three percent which means that revenues – excluding fleet disposals -for the 10 months to date are down around three percent on a constant currency level.

Net debt has been reduced from £167.6 million to £158 million – although the company says that on a constant currency basis the reduction would have been £16.8 million..

The UK, Lavendon’s largest operation, saw revenues grow by five percent in the four months since the end of June, which leaves the year to date revenues two percent below last year. The company says that both utilisation and pricing levels are improving which bodes well for the full year.

In Germany revenues are down one percent leaving year to date rentals down eight percent.

France and Belgium is the most positive news with revenues for the four months up 23 percent on last year and 14 percent up year to date. The company says that France has been particularly strong.

The Middle East Lavendon’s shining star in recent years has reported a fall of 12 percent in last four months, leaving revenues down nine percent for the 10 months. Activity hit harder by Ramadan this year has improved in November.

Finally Spain is down 12 percent for the four months and 19 percent year to date with little improvement on the horizon it is apparently breaking even and positive in cash terms.

The statement said: "As expected, the group's trading performance has improved in the third quarter and into the fourth quarter. Although economic prospects still remain unclear in a number of markets, the board believes that this improvement will be maintained for the balance of the year and that the group will deliver a full year result in line with its expectations.”

Vertikal Comment

More positive news such as this will hopefully encourage other rental companies to stop some of the more extreme rate cutting that went on earlier in the year in several European countries.

Lavendon is a major force in a number of European markets as well as the Middle East and its leadership in this area will hopefully encourage others to employ sound business practices as activity improves and availability of good equipment becomes a scarcer commodity.

There is still a great deal of uncertainty as Europe heads into the winter, however this is a far brighter picture than we were looking at 12 months ago and if everyone plays their part it could continue to brighten over the next six months.