10.07.2014

Lavendon gathers pace

UK based international rental company Lavendon has reported a seven percent increase in first half revenues on a constant currency basis. Although the weaker Euro kicks this down to four percent when actual exchange rates are used.

The Middle East continues to lead the growth with a 13 percent improvement, driven by a larger fleet and improving prices. In the UK though Nationwide Platforms was close behind with an 11 percent lift, thanks to better utilisation and higher rental rates. The first quarter also benefited from a comparison with a poor quarter in 2013 when bad weather seriously disrupted business.

In continental Europe Gardemann in Germany continues to decline with revenues falling seven percent, although the company says that pricing is now stabilising. In Belgium competitive pricing issues in the second quarter helped push revenues for the six months down three percent, while France continues to move ahead, coming in eight percent higher than last year in spite of a tough market.

Net debt at constant rates increased marginally to £102 million, but on actual current exchange rates it fell to £99 million. The company says that it will easily fund this year’s capital expenditure from cash flows.

Chief executive Don Kenny said: "The group's performance in the first half of the year is encouraging, with particularly strong revenue growth from our key UK and Middle East businesses. We are now consistently delivering growth in overall revenues which is driving improvements in both profitability and margins. Whilst recognising the continuing economic uncertainties in our Continental European markets, the board is increasingly confident of delivering on its expectations for 2014."

Vertikal Comment

This is an excellent result from Lavendon which appears to be on the move again in the UK after a slightly shaky looking period. It should see this growth continue as the UK economy continues to improve. Germany is still a concern and is performing well below local operations. In spite of this most of the news is very positive and the company looks well placed to exceed expectations this year.