02.07.2004

Lavendon see improved UK revenues

The Lavendon group, Europe’s largest powered access company, owners of UK market leader Nationwide Access, German market leader Zooom, and Middle East market leader Rapid Access, with companies also located in France, Spain and Austria, has issued an interim trading statement for the half year to June 30th...

The company has said that overall revenues are broadly in line with last year. This is generally ahead of market expectations. Revenues in the UK rose slightly compared to last year, but at a cost of extra investment in sales, marketing and customer service, the effect of this extra cost is likely to depress margins in the first half, but should pay off in the second half, particularly as market conditions in the UK are now beginning to improve in terms of pricing and utilisation.

In Germany the picture is less rosy, with a five percent fall on last years numbers in Euro terms. The company see few, if any, tangible signs of improvement in market conditions. Separate reports have indicated improving rental rates in Germany, but this does not appear to have helped Lavendon in the first half and they are not predicting any improvement in the second half.
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In the other European markets of France, Spain and Austria revenues were marginally down on 2003, dropping two percent overall. In the Middle East, Rapid Access, the group’s star performer in 2003, saw revenues rise a further 15 percent, helping compensate for the weak performance in continental Europe.

With a tight restriction on capital spending, cash flow was strong, allowing Lavendon to continue to pay down debt through out the period and they expect to continue this in the second half. With the Group's banking facilities due to expire in January 2005 refinancing has been high on the list of priorities, as a result a new £85 million multi-currency facility in has been put in place, which runs until the 30th June 2009. Fees for this exercise came to around £1 million, and will be reported as exceptional costs for the half year.

Lavendon expect the second half, which is typically a busier time of year, to improve in all markets except Germany, resulting in a full year result in line with forecasts.