15.01.2015

Lavendon tops expectations

UK based international rental group Lavendon has issued a full year trading statement, indicating that it will complete the year at the top end of its forecasts.

The statement does not give specific revenue numbers but reports that for the full 12 months rental revenues will be six percent higher than in 2013.
Nationwide Platforms in the UK – roughly half the business – ended the year seven percent higher, thanks to improving pricing trends and a more favourable machine mix, which offset lower utilisation. Fourth quarter revenues increased just one percent.

In the Middle East Rapid ended the year 15 percent higher, although the fourth quarter was up 20 percent on higher volumes. The company says that the market outlook for its business continues to be positive and as a result it is “deploying additional capital in the region” during the first half of 2015.

The Gardemann business in Germany achieved a positive fourth quarter as predicted, ending up three percent on the same period last year. Partly due to a comparison with a weaker quarter in 2013. The full year revenues ended three percent below last year.

In France, the pace of growth continued in the fourth quarter with the business ending the year up eight percent, a number maintained in the final three months.

Finally DK Rental in Belgium had a further steep decline in the fourth quarter with revenues dropping 23 percent, it ended the full year down 13 percent. As in the third quarter the company says that much of this is due to the completion of a major project at the start of this year which boosts last year’s second half revenues.

The group's net debt at the end of the year was £2 million lower than at the end of 2013 at £95 million. At actual exchange rates in place at year end, it is £5 million lower at £90 million - helped by a weaker Euro.

Chief executive Don Kenny said: "The group performed well in 2014, with strong revenue growth in our UK, Middle East and French businesses driving improvements in our profitability and margins. This performance has been delivered despite exchange rate headwinds on our overseas earnings and the continued economic weakness in our Continental European markets."

"The Board expects the group's results for 2014 to be at the top of its expectations, and in particular will report that the Group's Return On Capital Employed has moved ahead of its Weight Average Cost of Capital for the year. As we move into 2015, we are looking forward to building on the momentum that we have developed during the past 12 months and making further progress in the year ahead."

Vertikal Comment

Overall this is a solid fourth quarter performance from Lavendon. It is encouraging to see Germany finally positing some revenue growth again, even if it is from a low level. The slower growth in the UK is slightly surprising, but most likely related to the timing of holidays and contract endings, than any significant underlying change in demand.

The full results will be issued later next month, which will show more detail and be combined with a couple of months trading in 2015.

All in all a positive start to the annual results season.