16.04.2015

Lavendon edges up

UK based international rental group Lavendon has issued a trading statement indicating a one percent rise in first quarter revenues.

In the UK, Nationwide Platforms - which still represents 47 percent of group revenues –revenues fell by three percent in the three months, but the company says that growth retuned in March with a one percent improvement, after a slow first two months. The company says that while revenues were slower, ”the UK's more efficient operating model continued to drive growth in profitability and margins across the period compared to the prior year”.

Strongest revenue growth was once again seen with Rapid in the Middle East, where revenues increased 11 percent, compared to last year. This in spite of a comparison with a strong first quarter in 2014. Higher volumes in the region has led to the company to allocate additional capital to expand the regional fleet.
In continental Europe overall sales were flat, however France continues to improve and saw revenues increase 13 percent, while Gardemann in Germany slipped back three percent, while DK in Belgium fell 17 percent, due in part to the ending of a large contract that made up a significant portion of the 2014 revenues.

Net debt at the end of March - before allowing for exchange rate variations - increased £13 million on the quarter to £103 million, due to the purchase of additional equipment and the payments to equipment suppliers for equipment supplied last year. At actual exchange rates net debt is £98 million.

Chief executive Don Kenny said: "The group has traded in line with our expectations in the first quarter, with a modest growth in overall Group revenues and continuing operational improvements driving growth in profitability, margins and return on capital employed across the period. The board is confident of building on this momentum, making further progress during the year and delivering on its expectations for 2015."

Vertikal Comment

Overall this looks like a reasonable first quarter for Europe’s largest powered access rental company, although it is becoming quite dependant on the Middle East to offset variable performances in Germany and Belgium.

The good thing is that while the UK business began slowly, it looks like the company appears to have held its nerve, and not jumped into a rate slashing knee-jerk reaction. With revenues picking up in March and the year overall looking positive the UK business ought to see an increasingly positive year in 2015.

Germany could also pick up in the second quarter, while Belgium should settle a little, as France continues to grow. 2015 could well prove to be one of the group’s best years for a long time.