26.08.2011

Lavendon confirms results

UK based international rental company Lavendon has confirmed its half year results, previously announced in its preliminary trading statement.

Total revenues were £110.1 million four percent up on the same period last year, while pre-tax profits came in at £1.5 million compared to a loss of £300,000 in 2010. The company highlights the fact that the results include £3.57 million of one off exceptional charges and around £1 million of amortisation, take these out and the “underlying” pre-tax profit was £6.1 million.

The exceptionals include a £522,000 write down of equipment values in its Spanish fleet, currently being disbanded, £2.54 million of restructuring charges, including consultancy fees, termination costs etc... and £505,000 in exceptional interest charges.

As detailed in our report on the preliminary results Click here to read all of the group companies saw revenues improve in the first half, except the Middle East although it posted a stronger second quarter.

Capital expenditure for the first half was £7.5 million slightly down on the same period of 2010, and roughly half of what the company expects to spend in the year as a whole. Net debt was cut from £140 million at the start of the year to £133.7 million at the end with a further “substantial” reduction expected in the second half.

Rental rates continue to improve in the UK, which is still almost half the group’s business, gaining a further three percent in the first half, adding to the seven percent improvement in 2010.

John Standen, executive chairman said: "We are pleased with the improved performance of the group in the first half of 2011. The modest recovery in our markets combined with operational improvements have both contributed to increased operating margins and return on capital employed. Net debt has continued to fall in line with our plans. Following the reviews conducted earlier in the year, we remain confident of the significant benefits which will accrue to the business, both in terms of operational initiatives and our focus on efficient capital allocation. It is our aim to drive return on capital to a sustainable level in excess of the cost of capital over the business cycle and we believe the Group is well positioned to achieve this.”

"Trading since the half year end has been in line with our expectations and the Board is confident of the group's ability to deliver increased shareholder value in the medium term. Further substantial reductions in net debt are expected in the second half, creating a robust capital structure to support the further development of the group.”

“Future capital expenditure to be funded from annual cash flows that will allow a highly competitive fleet to be maintained whilst not having to re-leverage the Group's balance sheet.”