16th Jan 2014 10:19
LONDON (Alliance News) - Lavendon Group PLC Thursday said it is confident of meeting its profit expectations for 2013, as it reported strong rental growth in France and the Middle East and an improvement in the UK, its biggest market.
Lavendon, which rents out powered access equipment, said it had also achieved bigger annualised operating efficiency gains than it had expected.
In a trading statement, it reported rental growth of 21% in the Middle East and 7% in France, although overall rental was flat as it saw declines in the UK, Germany and Belgium.
However, the UK market, which contributes about 46% of total group revenue, improved throughout the year, with volumes down 7% in the first quarter, 6% in the second quarter, 4% in the third quarter and flat in the final quarter.
"The UK's revenue performance continued to improve in the quarter and is starting to gather momentum as we move into 2014, with volumes remaining consistently ahead of the prior year and pricing showing further signs of strengthening," it said.
"The influence of the shift in fleet mix on hire towards smaller units is now diminishing although remained a factor in the final quarter, offsetting the benefit of the increased volumes and prices on overall revenues and margins per hire," it cautioned.
It said it still expects to report a return on capital employed marginally below the 10.7% reported for 2012, mainly due to the decline in the UK's contribution.
It cut its net debt by GBP1 million to GBP96 million.
"The board expects the group's results for 2013 to be in line with its expectations, and, whilst mindful of continuing economic uncertainties in our European markets, we are looking forward to making further progress in 2014," Chief Executive Don Kenny said.
Analysts are expecting the company to report a pretax profit of GBP29.84 million for 2013, according to consensus forecasts on MorningStar. The figure was GBP20.80 million in 2012.
Lavendon will report its full 2013 results February 27.
By Steve McGrath; [email protected]; @stevemcgrath1
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