13.01.2017

Strong fourth quarter for Lavendon

Lavendon – owner of Nationwide Platforms in the UK, Rapid Access in the Middle East, Gardemann in Germany and DK Rental in Belgium has issued a full year trading statement.

The group as a whole saw rental revenues rise seven percent in the fourth quarter to end the full year eight percent higher which takes it to roughly £250 million, which ought to make total revenues around £265 million.

In the UK which represents 46% of the group’s total rental revenues, Nationwide achieved a 12 percent increase in revenues, to end the year up nine percent. In the Middle East the fourth quarter was slower with revenues up six percent, but the still came in 16 percent higher for the full year.
In France growth continued rising 11 percent, while Belgium edged up one percent and Germany declined three percent. The net effect for Continental Europe was a one percent improvement in fourth quarter revenues- up two percent for the full year.

The company say that market share gains drove the revenue growth in the UK, which combined with an improving pricing environment. In the fourth quarter utilisation levels reached 72 percent even with a larger fleet and helped by increased efficiency from its transport and maintenance operations which have, it says improved margins.

In the Middle East business fourth quarter utilisation reached 79 percent with growth in the UAE, Kuwait, Oman and Qatar offset by a decline in Saudi Arabia which generates higher margins.

In Continental Europe the German business will end the year in profit after a first half badly affected by restructuring.
Net debt at the end of December was £157 million compared to £119 million at the same time last year of which £16 million is due to the fall in the value of Sterling.

Chief executive Don Kenny said: “The group has delivered a strong performance in 2016 with growth in revenues driving increased profitability and margins. As a consequence, the board now expects the group’s results for 2016 to be ahead of its expectations. As we move into 2017, whilst recognising the uncertainty in the macroeconomic outlook, the group is well placed to build on the momentum developed during the past few years and to make further progress in the year ahead.”

Vertikal Comment

This is a good result from Lavendon with strong prospects for the year ahead, no mention is made in the trading statement regarding the current takeover attempts from Loxam and TVH. If by chance Lavendon was to remain as an independent publicly quoted company it is likely to have one of its best years ever in 2017.