Preliminary Results

RNS Number : 9837H

Lavendon Group PLC

03 March 2010

 

 

3rd March 2010

 

Lavendon Group plc ("the Company" or the "Group")

 

Prelim Results for the year ended 31st December 2009

 

Lavendon Group plc, Europe's market leader in the rental of powered access equipment, today announces its Prelim Results for the twelve months ended 31st December 2009.

 

Financial summary

·; Full year performance in line with Board expectations:

▪ Revenues £226.9m (2008: £259.8m)

▪ EBITDA £80.4m* (2008: £97.3m)

▪ Operating profit £31.1m* (2008: £46.4m)

▪ Operating profit margin 13.7%* (2008: 17.9%)

▪ Profit before tax £13.9m* (2008: £30.4m)

▪ Statutory pre-tax (loss)/profit (£47.8m) (2008: £22.5m profit)

▪ Earnings per share 19.16p* (2008: 50.55p)

▪ Statutory (loss)/earnings per share (77.45p) (2008: earnings 37.43p)

▪ Dividend for year proposed at 1.60p (2008: 5.00p)

 

* Prior to amortisation charges and exceptional items. Amortisation charges totalled £3.5m (2008: £4.3m) and exceptional items totalled £58.2m (2008: £3.6m). Cash cost of exceptional items £14.0m (exceptional operating items £9.6m and £4.4m of exceptional interest items).

 

·; Strong cash generation and fundraising strengthened balance sheet:

▪ Cash generated from operations £76.7m (2008: £74.8m)

▪ Net capex reduced to £5.7m (2008: £58.1m)

▪ Raised £76.7m through issue of new equity, enabled to significantly accelerate debt reduction programme and deleverage:

- Net debt at year end £182.1m (2008: £305.0m)

- Debt to pre-exceptional EBITDA reduced to 2.22 times, (2008: 2.65 times)

▪ Achieved £17m of annualised cost savings

▪ Disposed of excess assets generating £10.7m

▪ Banking facilities, secured until September 2013, provide considerable headroom

 

Operational highlights

·; £17m of cost savings achieved through accelerating integration and consolidation of European businesses

 

·; Strengthened position in UK as market leader:

▪ Gained market share

▪ Acquired trade and assets of EPL Access from administrator for £3.7m

▪ Secured preferred supply agreements with major UK customers across several sectors

 

·; Continental Europe experienced challenging markets:

▪ Operational cost base addressed

 

·; Middle East showing encouraging signs of growth:

▪ Continued to grow fleet during 2009 in anticipation of demand increases

▪ Outlook for longer-term projects (excluding Dubai) remains solid

 

·; David Hollywood appointed as Chairman of Group

 

Post period end

·; Adverse weather conditions impacted trading - however impact expected to be recovered

·; Don't expect market conditions to deteriorate further

 

 

Kevin Appleton, Chief Executive of Lavendon Group plc said:

 

"Although 2009 has been an extremely challenging year, we achieved a performance in line with our expectations. With sharply declining revenues, we have mitigated the impact on underlying profitability by accelerating business integration and cost reduction measures.

 

"Additionally, we have dramatically reduced our net debt levels through a combination of increased free cash generation and a successful £77 million equity raising at the end of 2009, and at the same time, revised banking covenants. We believe therefore that we are well placed to trade confidently through the remainder of the current downturn in our industry.

 

"Whilst we do not anticipate any material recovery in our markets in 2010, we do believe that further significant deterioration is increasingly less likely and that we are well placed for profitable growth when the markets recover."

 

 

For further information please contact:

 

Lavendon Group plc Kevin Appleton, Chief Executive Alan Merrell, Group Finance Director	Today T: +44(0)207 831 3113 Thereafter T: +44(0)1455 558874
Financial Dynamics Jonathon Brill/Billy Clegg/Caroline Stewart	T: +44(0)207 831 3113

 

 

CHAIRMAN'S STATEMENT

 

Against a background of an extremely difficult economic environment in 2009, the Group's main focus has been on aligning its cost base to be more in line with the prevailing market demand, and generating cash to reduce its debt levels. This approach has sheltered the Group from the full impact of the economic and trading downturn, and should also amplify the Group's operational leverage when economic conditions improve.

 

The realignment of the Group's cost base has largely been facilitated through accelerating the integration and consolidation of our European businesses, particularly in the UK, enabling some £17.0 million of fixed costs to be extracted on an annualised basis, whilst ensuring that sufficient scale remains available to service the market as it recovers. We have also continued to benefit from growth in our Middle East business, where we have been pursuing a strategy of accelerated investment, and geographical diversification of activities (away from Dubai), over a four-year period. Whilst overall Group revenues on a like for like (1) basis declined by broadly £57 million, the combination of action taken to reduce the fixed cost base, close management of variable costs and the further growth from the Middle East, has mitigated the inherent operational leverage within our business to limit the fall in like for like underlying (2) operating profits to under £20 million.

 

The Group's net debt levels were reduced by £123 million in the year, through a combination of resilient operational cash flows, a fund raising of £77 million (net of expenses) and a favourable movement in foreign exchange rates. The fundraising, through a Firm Placing & Placing and Open Offer, enabled the Group to establish a more appropriate capital structure for the current economic climate. We also took the opportunity to agree new banking covenants with our lenders, which provide increased headroom against further trading pressures. This in turn allows us to face the challenges and opportunities presented by the current economic environment with greater confidence.

 

Financial Results

 

Group revenues for the year reduced by 13% to £226.9 million (2008: £259.8 million), reflecting a decline in revenues across all of our European businesses, partly offset by continued growth in our Middle East business. Underlying operating profits reduced by 33% to £31.1 million (2008: £46.4 million), with margins declining to 13.7% from 17.9% in the prior year. Using consistent exchange rates with 2008, underlying revenues reduced by 18% to £212.2 million and underlying operating profits reduced by 36% to £29.8 million. After amortisation charges and exceptional items, the Group recorded an operating loss of £24.8 million (2008: a profit of £38.5 million).

 

(1) Like for like comparison assumes a first quarter revenue and operating profit contribution in 2008 from the acquisition of The Platform Company (completed on 1 April 2008) of £9.6 million and £2.0 million respectively, and the use of consistent foreign exchange rates.

 (2) Underlying operating profits, profits before and after tax, earnings per share, EBITDA and interest costs are stated before amortisation charges and exceptional items.

 

 

Amortisation charges for the year were £3.5 million (2008: £4.3 million), and exceptional operating items totalled £52.3 million (2008: £3.6 million). Of the exceptional operating items, £9.6 million were cash costs that related to the restructuring of the Group's European businesses during the year. The remaining exceptional operating items, a total of £42.7 million, were non-cash costs, and related to the impairment of the Group's goodwill and intangible assets of £30.8 million and asset write-downs of £11.9 million.

 

Underlying net interest costs increased to £17.1 million (2008: £16.0 million), whilst the Group's underlying profit before tax fell by 54% to £13.9 million (2008: £30.4 million). Exceptional interest costs of £5.9 million were incurred during the year, which related to the accelerated amortisation of fees associated with arranging and amending the Group's banking facilities. There was no material difference to the Group's underlying profit before tax if consistent exchange rates with 2008 are used, as, due to a natural hedge provided by trading, movements in interest costs broadly matched the movement in operating profits. The loss before tax after amortisation charges and exceptional items was £47.8 million (2008: profit of £22.5 million).

 

With an effective tax rate of 23% (2008: 23%), the Group's underlying profit after tax was £10.7 million (2008: £23.5 million), which when combined with a 21% increase in the average number of shares in issue (adjusted for the effect of the Group's fundraising in December 2009), results in underlying earnings per share of 19.16 pence (2008: 50.55 pence). After amortisation charges and exceptional items, the Group had an effective tax rate of 9% (2008: 23%) on the loss after tax of £43.4 million (2008: profit of £17.4 million) and a loss per share of 77.45 pence (2008: earnings of 37.43 pence).

 

Underlying EBITDA (earnings before interest, tax, depreciation and amortisation) declined by 17% to £80.4 million (2008: £97.3 million) during the year, with margins easing to 35.4% (2008: 37.5%). After exceptional items, the EBITDA for the year was £70.8 million (2008: £93.7 million). Cash generated from operations, including the sale and purchase of rental fleet assets and after movements in working capital, increased by 3% to £76.7 million (2008: £74.8 million). Net cash generated from operations, after payments of interest and tax, increased by 4% to £56.2 million (2008: £53.9 million).

 

Investment in the Group's rental fleet and operational infrastructure, including the acquisition of certain assets of EPL Access for £3.7 million in August 2009, totalled £12.9 million for the year (2008: £58.9 million). This investment was partly funded by the disposal of surplus and retired assets that generated £10.7 million in cash (2008: £11.4 million). This activity, after reflecting the movement in amounts owed to equipment suppliers at the beginning and end of the year, resulted in a net cash outflow relating to capital expenditure for the year of £5.7 million (2008: £58.1 million). In addition to this investment, a further £9.4 million was paid in deferred consideration and redemption of loan notes relating to acquisitions made in earlier years, which was partly financed by a £1.2 million issue of shares to a number of the vendors of the businesses acquired.

 

The Group's solid operational cash flows and tight control over investment levels, when combined with the proceeds raised from the issue of new shares during the year and a favourable foreign exchange movement of £9.4 million, significantly reduced the Group's net debt levels to £182.1 million (2008: £305.0 million). The corresponding debt to equity ratio was 104% (2008: 206%), which not only reflects the reduction in net debt levels, but also recognises the increase in shareholders funds following the issue of new equity. The Group's net debt to EBITDA ratio (calculated in accordance with our bank facility agreement which assumes 12 months EBITDA contribution from EPL Access and uses consistent currency conversion rates) was 2.22 times (2008: 2.65 times). The Group is fully compliant with its banking covenants.

 

Dividend

 

In consideration of the Group's trading performance and the increased number of shares in issue following the fundraising, the Group is proposing a final dividend of 0.60 pence per share (2008: 1.67 pence), making a total dividend for the year of 1.60 pence (2008: 5.00 pence). The final dividend, if approved at the Company's Annual General Meeting on 22 April 2010, will be paid on 6 May 2010 to shareholders on the register at the close of business on 12 March 2010.

 

Board Changes

 

Following John Gordon's retirement at the Group's Annual General Meeting on 23 April 2009, I became Chairman of the Group. I would like to record my appreciation to John, for the experience and dedication that he brought to the Chairmanship of the Group, and wish him a long and happy retirement.

 

Summary and Outlook

 

During 2009, the Group strengthened its position in the UK through the integration of its various trading businesses and the opportunistic acquisition of the trade and assets of EPL Access from administration. We also invested further in our Middle East operations to strengthen our presence and took prompt action to defend margins and protect cash flow across all of our European businesses.

 

As the year progressed, the rate of deterioration in our European markets slowed, and towards the end of the year, projects previously delayed in the Middle East (outside of Dubai) started to get underway. Whilst we do not anticipate a marked recovery in overall demand in 2010, we do believe that further significant deterioration in our markets is unlikely. We have been successful in winning significant major projects and customers due to our scale and range of service proposition, and we believe that our relative competitive position has improved in our main markets during the year.

 

Our immediate focus is to manage working capital to maximise free cash flow and further reduce the Group's net debt levels. We will do this by continuing to aggressively manage costs and dispose of excess rental fleet, whilst selectively invest in high growth areas such as the Middle East. At the same time, we will continue to implement improvements in our IT systems, equipment maintenance programmes and people development, to ensure we have the necessary platform firmly in place to support our growth.

 

Trading since the year-end has been affected by the unusually prolonged adverse weather conditions, particularly in mainland Europe. At this stage, we envisage that any impact on our performance, caused by the slower start, will not affect our expectations for the year as a whole.

Review of Performance by Country

 

A summary of the revenues and underlying operating profit by each business unit is given below:-

 

	Revenues		Underlying Operating Profit
£' millions	2008	2009	2008	2009
UK	137.5	106.4	24.4	12.4
Germany	55.2	52.2	7.5	3.6
Belgium	16.8	14.4	4.7	3.1
France	13.2	12.4	0.9	0.5
Spain	14.0	9.4	1.6	0.1
Middle East*	23.1	32.1	7.3	11.4
	259.8	226.9	46.4	31.1
* Middle East includes the results of operations in Bahrain, Qatar, Saudi Arabia and the United Arab Emirates

 

All figures shown in the above table are before amortisation charges and exceptional items

 

We have structured the Group so that each country of operation is viewed as a separate reporting profit centre, supported by central Group service functions. Each operation has its own management team responsible for delivering agreed performance targets.

 

The performance of each operation is summarised below, with all financial figures being underlying numbers quoted before amortisation charges and exceptional items.

 

UK

 

Revenues fell during the year by 23% to £106.4 million (2008: £137.5 million), reflecting the difficult trading conditions that were present throughout the period. On a like-for-like basis, assuming a full year of revenue in 2008 from The Platform Company, revenues fell by around £41 million (or 28%).

 

This rate of revenue decline represented a continuation of the pattern established between September 2008 and April 2009 when the UK construction sector, in particular, saw a sharp contraction in demand due to the cancellation or delay of a number of significant projects. This contraction was reflected in our own customer base, where large numbers of our construction related customers, particularly those exposed to commercial and industrial construction, experienced falls in demand exceeding 30%. Decline in demand from other, non-construction related, sectors were not as severe but typically were still in the 10%-25% range depending upon the sector.

 

Whilst overall market demand has declined during the year, we have been successful in securing further preferred supply agreements with major UK customers in several sectors and believe our relative market position has strengthened considerably as a result. The scale of our UK business has also meant that we have been able to maintain this strong relative position despite removing considerable cost from the business. Of the £41 million like-for-like decline in revenues, only around £14 million or 34% translated into like for like operating profit deterioration, in what is typically regarded as a high fixed cost and operationally leveraged business.

 

In August 2009, we strengthened our market position in the UK vehicle mounted platform sector with the acquisition of the trade and assets of EPL Access from the administrator, a business mainly reliant on non-construction sectors.

 

Our presence as part of the on-site 2012 Olympic park equipment supply consortium contributed only marginally to our revenues in 2009. However, the build programme for the park increases sharply in 2010 and we would therefore expect to see this support utilisation and revenues through the year ahead.

 

With revenues at £106.4 million, underlying operating profits reduced to £12.4 million (2008: £24.4 million), with margins declining to 11.7% from 17.8% in the previous year.

 

Germany

 

The German economy declined sharply in the year, although without the same depth of impact on demand for the rental of powered access equipment as in the UK. In general, the revenue decline experienced by our business was more marked in the construction sector, with falls in revenue levels compared to the prior year of up to 26%, while in non-construction sectors, with the exception of energy-related demand, revenues fell by up to 14%. The energy-related sector suffered from a substantial fall in activities, down some 29%, partly due to fewer renewable energy projects compared to the prior year.

 

In response to this tougher market environment and to mitigate the decline in revenues, the operational cost base of the business was reduced across the year, by lowering the headcount by 15% and reducing both the depot network and size of the rental fleet. These actions reduced the operational cost base by around €3.5 million on an annualised basis, although the effect in the year was partly offset by a reduced level of profits from the disposal of ex-rental fleet equipment. The distance between conurbations and the need to maintain a national presence for our major customers means there are limited opportunities for further substantial cost reductions without impacting service levels and revenues.

 

Euro revenues for the year declined by 16%, but after adjusting for currency movements, revenues in sterling fell by 5% to £52.2 million (2008: £55.2 million). Underlying operating profits reduced to £3.6 million (2008: £7.5 million), with margins falling to 6.9% (2008: 13.5%).

 

Belgium

 

Against a difficult market environment, our Belgian business saw significant revenue decline in the year, exacerbated by a sharp reduction in sales of new equipment to end-users. In the later part of the year, the year on year decline in revenues started to slow, albeit activity levels remained well below those of the previous year.

 

Due to our lean operating structure, margins have remained at acceptable levels, albeit down on a year ago. The geographical density of the Belgian market means that we are able to provide national coverage from a network of just four depots. The relatively large scale of these depots means that we are able to eliminate some costs as revenue falls and thus limited the effects of a £2.4 million fall in revenues to a £1.6 million fall in underlying operating profits. This structure should also position us well to benefit from any eventual rebound in market conditions.

 

Euro revenues for the year declined by 24%, but after adjusting for currency movements, revenues in sterling fell by 14% to £14.4 million (2008: £16.8 million). Underlying operating profits reduced to £3.1 million (2008: £4.7 million), with margins falling to 21.5% (2008: 28.0%).

 

France

 

The French business has seen relatively modest revenue falls, despite a tough market environment where relevant sectors of construction have been in decline.

 

Our structure in France of a small number (five) of large depots (averaging over 250 units each) means we are able to compete favourably in large urban markets and are also able to extend our coverage areas if the immediate local market declines. This structure provides greater resilience to periods of market decline than competitors with a large national network.

 

Euro revenues for the year declined by 16%, but after adjusting for currency movements, revenues in sterling fell by 6% to £12.4 million (2008: £13.2 million). Underlying operating profits reduced to £0.5 million (2008: £0.9 million), with margins falling to 4.0% (2008: 6.8%).

 

Spain

 

As widely reported, the Spanish economy, and in particular the construction sector, continued to slow during the year, with an estimated weighted fall in output of over 15%. This reduction in demand was further compounded by extreme pricing pressure due to significant over-capacity in the powered access rental market.

 

Our local management have responded to these challenging market conditions by taking action to reduce the cost base of the business, and have been able to mitigate the impact of the revenue decline to the extent that only 33% of the revenue fall has fed through to a reduction in underlying operating profits. The scale of our business has been reduced to three large depots, in Madrid, Barcelona and Girona, positioning us well to withstand this period of market turbulence.

 

Euro revenues for the year declined by 41% but after adjusting for currency movements, revenues in sterling fell by 33% to £9.4 million (2008: £14.0 million). Underlying operating profits reduced to £0.1 million (2008: £1.7 million), with margins declining sharply to 1.1% (2008: 11.4%).

 

Middle East

 

Although there have been clear signals through the year that Dubai has entered a more challenging phase in its evolution, the outlook for longer-term projects in other parts of the region remains solid. We have expanded our operations beyond Dubai over a number of years in anticipation of this development (Dubai represented 21% of the region's revenue in 2009) and remain confident of the medium term economic prospects for the rest of the region.

 

There was a period of slower growth in Saudi Arabia during the second half of the year, as a number of infrastructure projects were re-priced or greater clarity on commodity prices was sought before committing to oil and gas projects. The majority of these projects are now reactivated and should have a positive impact on the business over the coming months.

 

The business has continued to grow its fleet during the year in anticipation of demand increases, and now operates over 1,600 rental units from a network of six depots. The increase in the rental fleet during the year was supplied largely from the Group's European fleet, where all transportation and duty costs are required to be expensed in the year the machines are transferred; a total of £1.2 million was expensed in 2009 (2008: £1.2 million).

 

Revenues for the year increased by 39% to £32.1 million (2008: £23.1 million), with underlying rental revenues (excluding the lower margin and less predictable revenues from new equipment sales) growing by 48% to £28.3 million (2008: £19.1 million). Underlying operating profits, after absorbing the transportation and duty costs of £1.2 million, increased to £11.4 million (2008: £7.3 million), with margins improving to 35.5% from 31.6% in the prior year.

 

Equipment Sales

 

The further development of our used equipment trading capabilities, re-branded as Lavendon Sales and operating out of Belgium, was instrumental in allowing us to dispose of some 1,900 ex-rental units to developing geographical markets, end users and international dealers, generating cash proceeds of £8.8 million. We believe that the ability to generate cash by reducing our fleet in periods of weaker demand, thereby lowering the fleet carrying cost and the associated costs of fleet storage and maintenance, is a key attribute of the business that provides important flexibility in the current economic environment.

 

Future Developments

 

Throughout 2009, we sought to limit the impact on the Group's profitability, from the revenue declines we were experiencing across our European businesses, by closely managing and reducing our cost base. At the same time, we controlled capital expenditure to ensure that the Group generated free cash flow to enable net debt levels to be reduced. This deleveraging of the Group's balance sheet was accelerated in December 2009 by the raising of £76.7 million through the issue of new equity.

 

In general, our rate of revenue decline slowed as 2009 progressed, and whilst we do not anticipate a marked recovery in demand during 2010, we do believe that further significant deterioration in markets is unlikely.

 

In 2010, we will continue to focus on managing our cost base and seek to improve our efficiency to ensure that the impact of our operating leverage is maximised when trading conditions improve. Our capital expenditure plans are to invest a maximum of £10 million during the year, net of any disposal proceeds, and this will be directed towards the continued expansion of our Middle East business and niche products that offer high growth and margin potential. We will continue to actively manage our rental fleet and dispose of surplus and/or retired rental units to generate cash. The average age of our fleet is 6.1 years as at 31 December 2009, and with an industry leading equipment maintenance programme we continue to have considerable scope to limit capital expenditure requirements for some time, without materially impacting our revenue generating capability.

 

The Group's ability to both generate significant cash flows through control of costs and working capital, even in difficult trading conditions, and limit requirements for capital expenditure, should ensure that strong levels of free cash are again produced in 2010 and net debt levels reduced progressively in the year.

 

It is clear that the economic outlook continues to be uncertain, with the timing of any recovery unpredictable. However, with a strengthened balance sheet and reliable cash flows, the Group is well positioned to manage its way through these difficult times and benefit disproportionately once market conditions improve.

 

Group income statement
For the year ended 31 December 2009
		2009				2008
						Restated
	Underlying	Amortisation charges and exceptional items	Total		Underlying	Amortisation charges and exceptional items	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Revenue	226,886	-	226,886		259,767	-	259,767
Cost of sales	(140,022)	(16,108)	(156,130)		(149,476)	-	(149,476)
Gross profit	86,864	(16,108)	70,756		110,291	-	110,291
Operating expenses	(55,809)	(39,702)	(95,511)		(63,869)	(7,877)	(71,746)
Operating profit/(loss)	31,055	(55,810)	(24,755)		46,422	(7,877)	38,545
Interest receivable	45	-	45		254	-	254
Interest payable	(17,168)	(5,874)	(23,042)		(16,292)	-	(16,292)
Profit/(loss) before taxation	13,932	(61,684)	(47,752)		30,384	(7,877)	22,507
Taxation on profit/(loss)	(3,183)	7,487	4,304		(6,927)	1,787	(5,140)
Profit/(loss) for the year	10,749	(54,197)	(43,448)		23,457	(6,090)	17,367
Earnings/(loss) per ordinary share
- basic	19.16p		(77.45p)		50.55p		37.43p
- diluted	18.69p		(77.45p)		47.48p		35.16p

 

All of the Group's trading activities relate to continuing operations.

 

 

Group statement of comprehensive income

For the year ended 31 December 2009

	2009	2008
	£'000	£'000
(Loss)/profit for the year	(43,448)	17,367
Other comprehensive income
Cash flow hedges net of tax	(476)	(1,654)
Currency translation differences	(6,092)	9,845
	(6,568)	8,191
Total comprehensive income for the year attributable to the owners of the Company	(50,016)	25,558

 

 

Group balance sheet
As at 31 December 2009
		Restated
	2009	2008
	£'000	£'000
Assets
Non-current assets
Goodwill	81,483	114,149
Intangible assets	7,436	14,723
Property, plant and equipment	290,410	361,842
	379,329	490,714
Current assets
Inventories	10,992	5,160
Trade and other receivables	48,139	60,152
Cash and cash equivalents	75,986	14,674
	135,117	79,986
Liabilities
Current liabilities
Financial liabilities - borrowings	(44,181)	(54,854)
Trade and other payables	(42,089)	(51,258)
Current tax liabilities	(11,399)	(9,999)
	(97,669)	(116,111)
Net current liabilities	37,448	(36,125)
Non-current liabilities
Financial liabilities - borrowings	(213,867)	(264,772)
Financial liabilities - derivative financial instruments	(2,741)	(2,081)
Deferred tax liabilities	(25,748)	(32,518)
Other non-current liabilities	-	(7,448)
	(242,356)	(306,819)
Net assets	174,421	147,770
Shareholders' equity
Ordinary shares	1,629	462
Share premium	103,258	101,961
Capital redemption reserve	4	4
Other reserves	(1,739)	4,829
Retained earnings	71,269	40,514
Total equity	174,421	147,770

 

 

Group cash flow statement
For the year ended 31 December 2009
	2009	2008
	£'000	£'000
Cash flows from operating activities:
(Loss)/profit for the year	(43,448)	17,367
Taxation (credit)/charge	(4,304)	5,140
Net interest expense	22,997	16,038
Amortisation, depreciation and impairment	95,572	55,114
Gain on sale of property, plant and equipment	(568)	(608)
Other non-cash movements	9	745
Purchase of rental fleet	(4,747)	(12,828)
Net decrease/(increase) in working capital	11,179	(6,139)
Cash generated from operations	76,690	74,829
Net interest paid	(19,339)	(13,503)
Taxation paid	(1,118)	(7,473)
Net cash generated from operating activities	56,233	53,853
Cash flows from investing activities:
Acquisition of subsidiaries (net of cash acquired)	(7,122)	(28,742)
Purchase of property, plant and equipment	(2,473)	(3,365)
Proceeds from sale of property, plant and equipment	1,943	1,847
Net cash used by investing activities	(7,652)	(30,260)
Cash flows from financing activities:
Drawdown of loans	13,235	183,870
Repayment of loans	(25,388)	(159,765)
Repayment of principal under hire purchase agreements	(43,423)	(38,383)
Settlement of loan notes	(1,160)	(5,068)
Repayment of guaranteed debt	(5,617)	(3,959)
Equity dividends paid	(1,246)	(4,288)
Proceeds from ordinary shares issued	80,955	136
Fees of capital raising	(4,198)	-
Net cash generated from/(used by) financing activities	13,158	(27,457)
Net increase/(decrease) in cash and cash equivalents before exchange differences	61,739	(3,864)
Effects of exchange rates	(427)	1,817
Net increase/(decrease) in cash and cash equivalents after exchange differences	61,312	(2,047)
Cash and cash equivalents at start of year	14,674	16,721
Cash and cash equivalents at end of year	75,986	14,674

 

 

Group statement of changes in equity

 

For the year ended 31 December 2009
						Net
			Capital		Cash flow	investment
	Ordinary	Share	redemption	Translation	hedge	hedge	Retained
	shares	premium	reserve	reserve	reserve	reserve	earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2009	462	101,961	4	25,533	(1,453)	(19,251)	40,514	147,770
Comprehensive income:
Loss for the year	-	-	-	-	-	-	(43,448)	(43,448)
Cash flow hedges, net of tax	-	-	-	-	(476)	-	-	(476)
Currency translation differences	-	-	-	(7,677)	-	1,585	-	(6,092)
Total comprehensive income	-	-	-	(7,677)	(476)	1,585	(43,448)	(50,016)
Transactions with owners:
Share based payments	-	-	-	-	-	-	9	9
Taxation movement on share based payments	-	-	-	-	-	-	(38)	(38)
Shares issued	1,167	1,297	-	-	-	-	79,676	82,140
Dividends paid in the year	-	-	-	-	-	-	(1,246)	(1,246)
Fees of capital raising	-	-	-	-	-	-	(4,198)	(4,198)
Total transactions with owners	1,167	1,297	-	-	-	-	74,203	76,667
Balance at 31 December 2009	1,629	103,258	4	17,856	(1,929)	(17,666)	71,269	174,421

 

Under the authority given to the directors at the Extraordinary General Meeting on 7 December 2009, the Company issued 115,472,199 new ordinary shares by way of a Firm Placing and a Placing and Open Offer at a price of 70.0p per share. The Firm Placing and the Placing and Open Offer raised net proceeds of £76,633,000 after costs of £4,198,000. As part of the Firm Placing and the Placing and Open Offer, the Company entered into an arrangement with a subsidiary availing itself of statutory merger relief for not recording share premium under Section 612 of the Companies Act 2006. The nominal value of new ordinary shares issued of £1,155,000 was credited to share capital, the costs of £4,198,000 were charged to retained earnings and the remaining consideration of £79,676,000 was recorded as a merger reserve. This merger reserve was transferred to retained earnings following receipt of the share proceeds as qualifying consideration prior to the year end.

 

 

For the year ended 31 December 2008
	Attributable to owners of the company
						Net
			Capital		Cash flow	investment
	Ordinary	Share	redemption	Translation	hedge	hedge	Retained
	shares	premium	reserve	reserve	reserve	reserve	earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2008	440	95,347	4	(1,528)	201	(2,035)	26,966	119,395
Comprehensive income:
Profit for the year	-	-	-	-	-	-	17,367	17,367
Cash flow hedges, net of tax	-	-	-	-	(1,654)	-	-	1,654
Currency translation differences	-	-	-	27,061	-	(17,216)	-	9,845
Total comprehensive income	-	-	-	27,061	(1,654)	(17,216)	17,367	25,558
Transactions with owners:
Share based payments	-	-	-	-	-	-	745	745
Taxation movement on share based payments	-	-	-	-	-	-	(276)	(276)
Shares issued	22	6,614	-	-	-	-	-	6,636
Dividends paid in the year	-	-	-	-	-	-	(4,288)	(4,288)
Total transactions with owners	22	6,614	-	-	-	-	(3,819)	2,817
Balance at 31 December 2008	462	101,961	4	25,533	(1,453)	(19,251)	40,514	147,770

 

 

 

 

 

Notes

1. Reconciliation of net cash flow to movement in net debt
	2009	2008
	£'000	£'000
Net increase/(decrease) in cash	61,312	(2,047)
Decrease in debt	61,179	18,237
Change in net debt resulting from cash flows	122,491	16,190
Non-cash items:
Accelerated amortisation of bank arrangement fees	(1,906)	-
Unsecured loan notes reclassified and issue of guaranteed deferred consideration	-	(4,060)
Debt acquired with subsidiary businesses	-	(33,791)
New hire purchase and finance lease agreements	(9,078)	(53,361)
Currency translation differences on net debt	11,383	(44,204)
Movement in net debt in the year	122,890	(119,226)
Net debt at 1 January	(304,952)	(185,726)
Net debt at 31 December	(182,062)	(304,952)

 

2. Segmental analysis

 

With effect from 1 January 2009, the Group adopted IFRS8 'Operating Segments'. This accounting standard requires a 'through the eyes of management' approach under which segment information is presented on the same basis as that used for internal reporting purposes. For internal reporting, the Group is organised into six operating segments based on the geographical locations of UK, Germany, Belgium, France, Spain and Middle East.

 

The Group's chief operating decision maker (the "CODM") is the Group Executive Committee, comprising the two executive directors and direct reports from the operating subsidiaries and business functional units in the Group. The Group Executive Committee reviews the Group's internal reporting in order to monitor and assess performance of the operating segments for the purpose of making decisions about allocation of resources. Performance is evaluated based on actual results compared to agreed targets and performance in prior periods.

 

The segmental information for the year ended 31 December 2008 has been restated to show Belgium and France as separate operating segments as a result of adopting IFRS8.

 

The primary profit measure used by the CODM is the underlying operating profit.

 

 

Year ended 31 December 2009
	UK £'000	Germany £'000	Belgium £'000	France £'000	Spain £'000	Middle East £'000	Group £'000
Revenue	106,377	52,187	14,380	12,424	9,398	32,120	226,886
Underlying operating profit	12,280	3,618	3,119	503	141	11,394	31,055
Amortisation	(1,769)	(513)	(870)	(30)	(331)	(6)	(3,519)
Exceptional items	(16,775)	(10,218)	(9,916)	(1,447)	(13,935)	-	(52,291)
Operating (loss)/profit	(6,264)	(7,113)	(7,667)	(974)	(14,125)	11,388	(24,755)
Interest receivable							45
Interest payable							(23,042)
Loss before taxation							(47,752)
Taxation							4,304
Loss for the year							(43,448)
Assets	282,879	90,665	52,865	27,222	21,981	38,834	514,446
Liabilities before group funding	(127,840)	(21,527)	(14,698)	(5,978)	(13,581)	(2,924)	(186,548)
Net assets before group funding	155,039	69,138	38,167	21,244	8,400	35,910	327,898
Group funding							(153,477)
Net assets							174,421
Capital expenditure	7,028	3,182	868	956	48	807	12,889
Depreciation	22,706	11,192	2,954	3,399	2,710	6,424	49,385
Exceptional impairment of property, plant and equipment	8,969	433	-	1,178	1,311	-	11,891
Amortisation of intangible assets	1,769	513	870	30	331	6	3,519
Exceptional impairment of goodwill and intangible assets	-	9,016	10,180	-	11,581	-	30,777

 

Notes:

 

The assets and depreciation charge shown for the Middle East operation includes rental equipment owned by the UK operation, but which is used by and costed to the Middle East operation. The inclusion of the assets and depreciation charge in the Middle East more accurately reflects the commercial nature of the arrangement and the reporting to the CODM.

 

The information disclosed for the UK operation includes certain centralised Group costs, assets and liabilities which may relate to the operation and financing of overseas subsidiaries.

 

Inter segment trading is not significant and therefore has been eliminated in the analysis presented above, so that only trading between the Group and external third parties is represented.

 

Capital expenditure includes the property, plant and equipment from the acquisition of the trade and certain assets of EPL Access Limited from administration.

 

 

Year ended 31 December 2008
	UK £'000	Germany £'000	Belgium £'000	France £'000	Spain £'000	Middle East £'000	Group £'000
Revenue	137,471	55,242	16,791	13,177	14,028	23,058	259,767
Underlying operating profit	24,413	7,479	4,689	913	1,664	7,264	46,422
Amortisation	(1,456)	(455)	(1,770)	(32)	(560)	(5)	(4,278)
Exceptional items	(2,358)	(740)	-	(237)	(264)	-	(3,599)
Operating profit	20,599	6,284	2,919	644	840	7,259	38,545
Interest receivable							254
Interest payable							(16,292)
Profit before taxation							22,507
Taxation							(5,140)
Profit for the year							17,367
Assets	260,099	115,758	73,358	33,839	47,837	39,809	570,700
Liabilities before group funding	(162,605)	(28,533)	(26,011)	(7,772)	(22,306)	(3,765)	(250,992)
Net assets before group funding	97,494	87,225	47,347	26,067	25,531	36,044	319,708
Group funding							(171,938)
Net assets							147,770
Capital expenditure	23,629	13,839	5,035	2,136	4,593	9,723	58,955
Depreciation	24,936	10,718	2,889	3,781	3,662	4,850	50,836
Exceptional impairment of property, plant and equipment	-	-	-	-	-	-	-
Amortisation of intangible assets	1,456	455	1,770	32	560	5	4,278
Exceptional impairment of goodwill and intangible assets	-	-	-	-	-	-	-

 

 

Notes:

 

The assets and depreciation charge shown for the Middle East operation includes rental equipment owned by the UK operation, but which is used by and costed to the Middle East operation. The inclusion of the assets and depreciation charge in the Middle East more accurately reflects the commercial nature of the arrangement and the reporting to the CODM.

 

The information disclosed for the UK operation includes certain centralised Group costs, assets and liabilities which may relate to the operation and financing of overseas subsidiaries.

 

Inter segment trading is not significant and therefore has been eliminated in the analysis presented above, so that only trading between the Group and external third parties is represented.

 

Amortisation has been restated in the segmental analysis for 2008 and is now reallocated across all operating segments.

 

3. Exceptional items and amortisation

 

Exceptional items and amortisation incurred during the year are set out below:

	2009	2008
	£'000	£'000
Exceptional costs of sale:
- plant and machinery impairment (i)	11,626	-
- restructuring costs (ii)	4,482	-
	16,108	-
Exceptional operating expenses:
- goodwill impairment (iii)	27,322	-
- other intangible assets impairment (iv)	3,455	-
- restructuring costs (ii)	5,141	3,599
- property impairment	265	-
	36,183	3,599
Exceptional interest payable:
- accelerated amortisation of bank arrangement fees (v)	5,874	-
Total exceptional items	58,165	3,599
Amortisation	3,519	4,278
Total exceptional items and amortisation	61,684	7,877

 

Notes:

 

(i) A number of rental units in Belgium, France, Germany, Spain and the UK have been identified for disposal and their net book values have been written down to fair value less costs to sell with reference to current market prices.

(ii) Restructuring costs relate to the Group's trading operations in Germany, Spain and the UK and principally relate to employee termination costs, transport and storage of rental machines, depot closure costs and associated professional fees.

(iii) The goodwill impairment relates to the Group's goodwill for Belgium, Germany and Spain.

(iv) The other intangible asset impairment relates to the other intangible assets acquired on the acquisition of dk Rental in Belgium and Spain.

(v) All capitalised issue costs have been written off in the year in accordance with IAS39 paragraph AG62.

 

4. Acquisition

 

EPL Access Limited ("EPL")

 

On 6 August 2009 the Group acquired the trade and certain assets of EPL Access Limited from administration. The consideration paid was £1,291,000 satisfied in cash. In addition total debt liabilities of £2,761,000 were assumed.

 

The effective date of the acquisition was 6 August 2009. Accordingly only trading between 6 August 2009 and 31 December 2009 has been recorded in the current period results.

 

Details of the acquisition are provided below:

 

	£'000
Cost of investment
Cash paid on acquisition	1,291
Total cost	1,291
Provisional fair value of assets and liabilities acquired
Non-current assets - property, plant and equipment	3,691
Current assets - trade and other receivables	361
Current liabilities - financial liabilities - borrowings	(892)
Non-current liabilities - financial liabilities - borrowings	(1,869)
Provisional fair value of net assets acquired	1,291

 

No fair value adjustments were made to the net assets acquired.

 

The acquisition of subsidiaries in the Group Cash Flow Statement includes deferred consideration from previous acquisitions.

 

5. Earnings per share

 

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:

 

		2009			2008
					Restated
		Weighted			Weighted
		average number	Per share		average number	Per share
	(Loss)/profit	of shares	amount	Profit	Of shares	amount
	£'000	(in millions)	pence	£'000	(in millions)	pence
Basic earnings per share
(Loss)/profit for the year	(43,448)	56.1	(77.45)	17,367	46.4	37.43
Effect of dilutive securities
Deferred shares		1.4			2.6
Options		-			0.4
Diluted (loss)/earnings per share	(43,448)	57.5	(77.45)	17,367	49.4	35.16
Underlying earnings per share
Basic	10,749	56.1	19.16	23,457	46.4	50.55
Diluted	10,749	57.5	18.69	23,457	49.4	47.48

 

The potentially dilutive securities are not included in the 2009 calculation, as they were not dilutive to the loss per share in that year.

 

(Loss)/earnings per share are calculated on the 56,148,882 ordinary shares in issue for the year ended 31 December 2009 being the weighted average number of ordinary shares in issue (year ended 31 December 2008: 46,395,261 (restated)).

 

Diluted (loss)/earnings per share assumes conversion of all potential dilutive ordinary shares which arise from share incentive scheme awards granted to employees and deferred consideration shares where the exercise price is less than the average market price of the Company's ordinary share capital during the year. The effect of this dilution is to increase the weighted average number of ordinary shares to 57,464,165 (year ended 31 December 2008: 49,431,250 (restated)).

 

Underlying earnings per share is presented to exclude the impact of amortisation charges and exceptional items in the year and their associated tax effect. The Directors believe that underlying earnings per share provides additional relevant information about underlying business performance.

 

The weighted average number of shares and earnings per share figures for the year ended 31 December 2008 have been restated for the bonus element of the capital raising on 8 December 2009 comprising of a Firm Placing of 38,490,733 new ordinary shares and a Placing and Open Offer of 76,981,466 new ordinary shares at an issue price of 70.0 pence per new ordinary share.

 

6. Dividends

 

	2009	2008
	£'000	£'000
Final dividend paid in respect of 2008 of 1.67p (restated as 1.65p) per 1p ordinary share (2007: 6.25 (restated as 6.17p))	773	2,749
Interim dividend paid in respect of 2009 of 1.00p (restated as 0.99p) per 1p ordinary share (2008: 3.33p (restated as 3.29p))	473	1,539
	1,246	4,288

 

Following the bonus element of the capital raising on 8 December 2009 the dividends paid per share have been restated for all dividends paid prior to this date.

 

The directors are proposing a final dividend in respect of the financial year ended 31 December 2009 of 0.60 pence per ordinary share which will distribute an estimated £978,000 of shareholders' funds. It will be paid on 6 May 2010 to those shareholders who are on the register at 12 March 2010, subject to approval at the Company's Annual General Meeting.

 

7. Taxation

 

Analysis of taxation (credit)/charge for the year:

 

	2009	2008
	£'000	£'000
Corporation taxation:
- current year	1,806	6,794
- adjustment in respect of prior years	(8)	390
	1,798	7,184
Deferred taxation:	(6,150)	(2,106)
Taxation movement on share based payments	48	62
Taxation	(4,304)	5,140

 

The taxation charge on the underlying profit is £3,183,000 (2008: £6,927,000). The taxation credit on amortisation charges and exceptional items is £7,487,000 (2008: £1,787,000).

 

In addition to the amount charged to the income statement, tax of £38,000 (2008: £276,000) in respect of share based payments was charged directly to reserves. This represents the reduction of a deferred tax asset which is in excess of the chargeto the income statement for share based payments.

 

No provision has been made in the financial statements for any tax liability which may arise upon future distributions of profit to the United Kingdom from overseas subsidiaries.

 

Reconciliation of taxation

 

The tax (credit)/charge for the year is higher (2008: lower) than the standard rate of corporation tax in the UK of 28% (2008: 28.5%). The differences are explained below:

 

	2009	2008
	£'000	£'000
(Loss)/profit before taxation	(47,752)	22,507
(Loss)/profit at standard rate of corporation taxation in the UK: 28% (2008: 28.5%)	(13,371)	6,414
Adjustments to tax in respect of prior years	(8)	(371)
Effect of overseas tax rates	(1,319)	(840)
Expenses not deductible for tax purposes	1,044	433
Impairment of goodwill	7,650	-
Additional tax losses recognised	(353)	(1,684)
Effect on deferred tax due to the tax rate change in the UK and Germany	-	(35)
Tax losses not recognised	1,140	1,223
Timing differences on which deferred tax is not provided	913	-
	(4,304)	5,140

 

8. Intangible assets

 

			Non-current intangible assets
	Goodwill		Intangibles recognised on acquisitions	Computer software	Trademarks	Total other intangibles
	£'000		£'000	£'000	£'000	£'000
Cost
At 1 January 2009	114,149		19,937	4,182	200	24,319
Exchange movements	(3,674)		(642)	(139)	-	(781)
Additions	-		-	182	-	182
Disposals	-		-	(8)	-	(8)
At 31 December 2009	110,475		19,295	4,217	200	23,712
Amortisation and impairment
At 1 January 2009	-		6,000	3,396	200	9,596
Exchange movements	1,670		(165)	(121)	-	(286)
Charge for the year	-		3,199	320	-	3,519
Exceptional impairment	27,322		3,455	-	-	3,455
Disposals	-		-	(8)	-	(8)
At 31 December 2009	28,992		12,489	3,587	200	16,276
Net book amount
At 31 December 2009	81,483		6,806	630	-	7,436

 

 

Intangibles recognised on acquisitions comprise brand names, customer relationships and non-compete agreements.

 

			Non-current intangible assets
			Intangibles
			recognised
	Goodwill		on acquisitions	Computer software	Trademarks	Total other intangibles
	£'000		£'000	£'000	£'000	£'000
Cost
At 1 January 2008	71,944		10,740	3,183	200	14,123
Exchange movements	18,790		3,102	444	-	3,546
Recognised on acquisition	23,415		6,095	18	-	6,113
Additions	-		-	537	-	537
At 31 December 2008	114,149		19,937	4,182	200	24,319
Amortisation
At 1 January 2008	-		1,356	2,600	200	4,156
Exchange movements	-		747	415	-	1,162
Charge for the year	-		3,897	381	--	4,278
At 31 December 2008	-		6,000	3,396	200	9,596
Net book amount
At 31 December 2008	114,149		13,937	786	-	14,723

 

Goodwill acquired in a business combination was allocated, at date of acquisition, to the cash generating unit that benefited from that business combination. The Directors consider that a cash-generating unit is generally an individual country of operation.

 

The allocation of the goodwill by cash generating unit is shown in the table below:

	Goodwill
	2009	2008
	£'000	£'000
Cash generating units ('CGUs')
United Kingdom	41,029	40,912
Belgium	21,762	32,912
Germany	18,692	29,811
Spain	-	10,514
	81,483	114,149

 

 

9. Property, plant and equipment

 

	Short leasehold properties	Rental fleet	Motor vehicles	Office fixtures and equipment	Total
	£'000	£'000	£'000	£'000	£'000
Cost
At 1 January 2009	1,382	540,347	2,635	12,072	556,436
Reclassification	-	(14,097)	7,277	6,820	-
Exchange movements	-	(15,479)	(513)	(844)	(16,836)
Additions	54	6,725	835	1,402	9,016
Recognised on acquisition	140	3,551	-	-	3,691
Disposals	-	(22,405)	(3,048)	(321)	(25,774)
Transferred to inventories	-	(65,296)	-	-	(65,296)
At 31 December 2009	1,576	433,346	7,186	19,129	461,237
Depreciation and impairment
At 1 January 2009	790	185,130	924	7,750	194,594
Reclassification	-	(12,132)	5,975	6,157	-
Exchange movements	-	(6,183)	(351)	(548)	(7,082)
Charge for the year	50	46,489	1,068	1,778	49,385
Exceptional impairment	265	11,568	8	50	11,891
Disposals	-	(18,209)	(1,868)	(126)	(20,203)
Transferred to inventories	-	(57,758)	-	-	(57,758)
At 31 December 2009	1,105	148,905	5,756	15,061	170,827
Net book value At 31 December 2009	471	284,441	1,430	4,068	290,410

 

During the year the Group has reclassified certain assets between rental fleet, motor vehicles and office fixtures and equipment, to more accurately reflect the nature of the assets.

 

 

	Short leasehold properties	Rental fleet	Motor vehicles	Office fixtures and equipment	Total
	£'000	£'000	£'000	£'000	£'000
Cost
At 1 January 2008	1,290	415,384	3,623	9,324	429,621
Exchange movements	-	50,169	529	1,285	51,983
Recognised on acquisition	-	54,428	7	474	54,909
Additions	92	55,590	1,662	1,074	58,418
Disposals	-	(31,136)	(3,186)	(85)	(34,407)
Transferred to inventories	-	(4,088)	-	-	(4,088)
At 31 December 2008	1,382	540,347	2,635	12,072	556,436
Depreciation
At 1 January 2008	748	147,023	1,488	5,469	154,728
Exchange movements	-	15,815	158	812	16,785
Charge for the year	42	48,015	1,250	1,529	50,836
Disposals	-	(22,865)	(1,972)	(60)	(24,897)
Transferred to inventories	-	(2,858)	-	-	(2,858)
At 31 December 2008	790	185,130	924	7,750	194,594
Net book value At 31 December 2008	592	355,217	1,711	4,322	361,842

 

 

10. Basis of preparation

 

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2009 or 2008 but is derived from those accounts. Statutory accounts for 2008 have been delivered to the registrar of companies, and those for 2009 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 237 (2) or (3) of the Companies Act 1985 in respect of the accounts for 2008 nor a statement under section 498 (2) or (3) of the Companies Act 2006 in respect of the accounts for 2009.

 

The Group financial statements have been prepared in accordance with EU endorsed International Financial Reporting Standard ("IFRS's") and IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The Group financial statements have been prepared under the historical cost convention.

 

In preparing the consolidated financial statements, comparative amounts for earnings per share and dividends per share have been restated as a result of the Capital Raising on 8 December 2009.

 

The Group has adopted the following new and amended IFRS as of 1 January 2009.

 

i) IAS16 (amendment), 'Property, plant and equipment' (and consequential amendment to IAS7, 'Statement of cash flows') (effective from 1 January 2009). The amendment is part of the IASB's annual improvements project published in May 2008. Entities whose ordinary activities comprise renting and subsequently selling assets present proceeds from the disposal of those assets as revenue and

should transfer the carrying amount of the asset to inventories when the asset becomes held for sale. A consequential amendment to IAS7 states that cash flows arising from purchase, rental and sale of those assets are classified as cash flows from operating activities.

 

ii) IAS1 (revised) 'Presentation of financial statements'. The revised standard requires all non owner changes in equity to be presented separately from owner changes in equity. The Group has elected to present non owner changes in equity in a Group Statement of Comprehensive Income, separate from the Group Income Statement.

 

iii) IFRS8 'Operating segments'. For more information see note 2.

 

iv) IAS23 (Revised) 'Borrowing costs'. There were no material amendments following the adoption of IAS23.

 

v) IFRS 7 'Financial instruments - Disclosures' (amendment) - effective 1 January 2009. The amendment requires enhanced disclosures about fair value measurement and liquidity risk. In particular, the amendment requires disclosure of fair value measurements by level

of a fair value measurement hierarchy.

 

vi) IFRS 2 (amendment), 'Share-based payment' (effective 1 January 2009) deals with vesting conditions and cancellations. It clarifies that vesting conditions are service conditions and performance conditions only. Other features of a share-based payment are not vesting conditions. These features would need to be included in the grant date fair value for transactions with employees and others providing similar services; they would not impact the number of awards expected to vest or valuation there of subsequent to grant date. All cancellations, whether by the entity or by other parties, should receive the same accounting treatment.

 

The group has adopted IFRS 2 (amendment) from 1 January 2009. The amendment does not have a material impact on the group's financial statements.

 

11. The Annual General Meeting of Lavendon Group plc will be held at Investec Bank plc, 2 Gresham Street, London EC2V 7QP on 22 April 2010 at 11:30am.

 

 

 

 

 

 

This information is provided by RNS

The company news service from the London Stock Exchange