22.04.2010

Lavendon revenues fall 13%

The Lavendon Group, Europe’s largest powered access rental company, issued an interim statement at its Annual General Meeting yesterday which show revenues down 13 percent compared to last year, but improving conditions since the start of April.

The company also says that the UK, its largest operation, fell 12 percent but has been on an improving trend with pricing levels showing signs of stabilising towards the end of the quarter. All of its other companies posted declines for the period, ranging from two percent in Belgium and France to 20 percent in Germany.

Here is the test of the statement in full:

"As previously reported, trading in Europe since the year end has been affected by unusually prolonged adverse weather conditions. We have however seen clear improvements in activity levels from March onwards, particularly in Germany. In the Middle East, demand continues on an improving trend following the slowdown experienced during the second half of 2009.”

“Group revenues, excluding ex-fleet equipment sales, for the three months ended 31 March 2010 have declined by 13 percent compared with the same period last year, on both an actual and constant currency basis. Despite this challenging start, based on recent increases in activity levels the board believes that the group will recover any performance shortfall and will meet its expectations for the full year.”

“As is common during the first quarter, the Group's borrowing levels remain little changed from the reported year-end position, with net debt as at 31 March 2010 of £181.5 million (31 December 2009: £182.1 million). “

“In the UK, revenues for the first three months declined by 12 percent compared with last year, with the rate of year on year decline reducing each month throughout the quarter. This trend has been supported by a recovery in demand from smaller, non key-account customers who had borne the brunt of the sharp downturn last year. By the end of the first quarter volume levels had almost returned to the levels of the prior year, with pricing stabilising. Our attention is now fully focused on improving yields.”

“Revenues for our German business declined by 20 percent in the first quarter compared to the previous year, on both an actual and constant currency basis. This decline was heavily weighted towards January and February, reflecting the exceptionally severe period of winter weather in the region, with activity levels improving steadily since March as construction projects recommence.

The combined revenues of France and Belgium declined by two percent in the quarter compared to the previous year, on both an actual and constant currency basis, with the rate of decline reducing month by month and in recent weeks moving to a year on year growth in revenues. The trading conditions in these markets appear slightly more helpful than elsewhere in Europe, and the outlook is reasonably positive.”

“Our Spanish revenues declined by 21 percent in the first three months, compared to the prior year, on both an actual and constant currency basis. As with our other European businesses, this decline was significantly weighted towards January and February and the rate of decline has slowed markedly in March, with volume levels moving ahead of prior year. Whilst Spain remains an extremely difficult environment, our business has been aggressively resized to the current market conditions, is broadly breakeven and continues to generate positive cash flows.”

“In the Middle East rental revenues have declined by five percent for the quarter, on both an actual and constant currency basis, against a strong comparative period last year. Total revenues, including sales of equipment, have declined by 13 percent on the same basis. This year on year decline in revenues reflects the on-going recovery, particularly in Saudi Arabia, from the slowdown in demand experienced through the second half of 2009, and we should return to year on year growth in the region in the coming months. Our operating margins remain very healthy, and the outlook for long-term major projects continues to be encouraging.”

“Whilst we have yet to recover fully the impact of the adverse weather conditions in the early part of the year, the increased activity levels seen in more recent weeks are encouraging and, the Board believes, sustainable. Accordingly, the Board continues to believe that its expectations for the year as a whole will be achieved."