17.11.2015

Steady third quarter at Lavendon

UK based international access rental company Lavendon has issued a positive third quarter trading statement.

The company reports that overall trading revenues for the nine months are up two percent on last year, while profit and return on investment has grown at a faster pace.

Year to date rental revenues are one percent higher year to date with the UK one percent lower due to a slow start to the year, the Middle East is up seven percent and continental Europe is two percent higher.

Looking at the preliminary revenues in the third quarter, the UK came in at similar levels to last year, but has seen a gradual improvement through the year, and has benefited from a more favourable product mix, supported by stable rental rates, even though this has resulted in lower volume at times. .

In the Middle East the third quarter came in three percent higher than last year, - its slowest growth percentage this year, but this relates more to comparison with a high number last year. The company says that growth is coming from the wider region and is proving more than sufficient to offset increased pricing pressures in Saudi Arabia. It also adds: “The overall outlook remains positive and we have continued to allocate additional capital to expand our fleet in support of our growth strategy”.

Continental Europe continues to recover improving two percent over last year, but most interestingly this is made up of a seven percent growth in Belgium, following several quarters of decline. France continued to grow, rising another three percent, whil Germany slipped back one percent.
The group's net debt level at the end of September increased as it predicted to £120 million, on a constant currency basis, relative to £90 million at the start of the year.

Chief executive Don Kenny said: "The group's trading performance in the first nine months of the year has improved across our markets, driving growth in revenues, profitability and margins. The board remains confident of delivering on its profit expectations for 2015, and with the delivery of the accelerated fleet investment now almost complete, we are well positioned to respond to market opportunities as we move into 2016."

Vertikal Comment

This is just a trading statement so there is no depth to the numbers supplied, however it looks very positive overall, and in some ways encouraging for the industry as a whole. The company seems to have used this year when there has been a good deal of uncertainty in the market to get itself set up and in position for a massive year in 2016, if the market picks up the pace of growth again which many are expecting , with a good chunk of next years fleet expenditure already in position for a full years contribution to revenues and the bottom line.

If the market stalls or declines, it is in a good position to sell off older equipment and stall on new capital expenditure without inflicting serious harm on its essential fleet renewal programme, in order to make the very best of a weak market.

All said and done this is a very positive and encouraging statement.