05.07.2006

Lavendon revenues rise 17%

The Lavendon group, Europe’s largest powered access business has reported preliminary first half 2006 numbers 17 percent higher than 2005 to around £56 Million. Growth came both from organic “same store” growth and the two UK acquisitions that it made in February.

In the UK, revenues were up by 25 percent reaching around £36.5 million putting the company on target to achieve £75 million in the UK for the full year. Two percent of the UK increase came from the existing business, with the balance from the acquisition of Panther and Kestrel in February and AMP in June.

German revenues declined by three percent in the first six months to around £9.8 million, although it says that the in last couple of months the German business posted year on year growth, which helped reduce operating losses.

Revenues in both France and Spain grew by 10 percent, with improved operating margins. This puts French sales in the region of £3.3 million and Spain at just under £2 million.

Revenues in the Middle East continued to flourish increasing by 20 percent to around £4.4 million, with margins remaining strong.

Net debt levels increased following the UK acquisitions, but it says are well supported by the Group's cash flows and improved trading performance.

The trading statement concludes: “Overall, the Group's performance is in line with expectations and the Board remains confident that further progress will be made in the remainder of the year."

Vertikal Comment

Lavendon is now beginning to benefit from both the improving market for powered access rental and from the restructuring of its business, including the UK acquisitions, which have allowed it to regain the local business in England that it had lost over the last three or four years.

Overseas the German market is now beginning to pick up rapidly, through both economic growth and increased awareness of self propelled aerial lifts. In spite of the cut backs last year, Lavendon still has a major foothold in the German market and could see the business back in profit by year end ready for 2007.

The French and Spanish operations must now be flirting with profitability, while the Middle East continues to prosper. Last year there were rumblings that the company would be better off pulling back into the UK market, selling off its overseas operations.

If any of this sentiment remains, and is shared by the directors, there could hardly be a better time to realise a premium for its Middle Eastern business.

All in All this is an encouraging set of results that are good both for the company and the European powered access industry.