Preliminary Results

1st March 2011

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

Preliminary Results for the year ended 31st December 2010

Lavendon Group plc, Europe's market leader in the rental of powered access equipment, today announces its Preliminary Results for the year ended 31 December 2010.

Financial highlights

·; Revenues £225.4m (2009: £226.9m)

·; EBITDA £70.2m* (2009: £80.4m)

·; Operating profit £24.7m* (2009: £31.1m)

·; Operating profit margin 11.0% (2009: 13.7%)

·; Profit before tax £13.1m* (2009: £13.9m)

·; Statutory pre-tax profit/(loss) £10.7m (2009: loss £47.8m)

·; Earnings per share 5.94p* (2009: 19.16p)

·; Statutory earnings/(loss) per share 4.90p (2009: loss 77.45p)

·; Cash generation and debt reduction programme continue to progress well:

- Net debt at year end reduced to £140.3m (2009 £182.1m)

- Debt to EBITDA is 2.00 times (2009: 2.26 times)

- Cash generated from operations £67.9m (2009: £76.7m)

·; Final dividend for year proposed at 0.67p (2009: 0.60p)

* Prior to amortisation charges and, in case of the prior year figures, exceptional items. Amortisation charges totalled £2.4m (2009: £3.5m) and no exceptional items were incurred in the period (2009: £52.3m).

Business Highlights

·; Underlying market conditions progressively stabilised across most of the Group's European areas of operation during 2010

·; Performance heavily impacted by severe weather conditions during Q1 and again in December

·; Demand from non-construction customers continued to outperform the construction sector in UK

·; Market position remains strong in Middle East with Saudi Arabia and Abu Dhabi markets slowly improving, but being offset by decline in Dubai

·; Rejected two public, unsolicited approaches from third parties as indicative prices significantly undervalued the Group

·; Conducted reviews which have highlighted internal levers to improve efficiency and scope to drive top line growth

·; Appointed two Non-Executive Directors in December

Current trading

·; Trading in line with Board expectations since year end

·; Continuing debt reduction programme through good operating cash generation

Kevin Appleton, Chief Executive of Lavendon Group plc said:

"Trading in 2010 remained challenging with the continuation of the cyclical market slowdown. We did however see an improvement across the majority of the Group's operations in the second half which enabled the Group to deliver results in line with market expectations.

"In the last few weeks, we conducted operational and business plan reviews with some external support, and these have confirmed opportunities for the Group to improve efficiency and drive top-line growth going forward. Following these high-level reviews, we are working to produce detailed implementation plans. The Board is confident of the Group's ability to deliver increased shareholder value through the cycle."

For further information please contact:

CHAIRMAN'S STATEMENT

In 2010, we saw a continuation of the cyclical market slowdown, although the general trading environment in the second half of the year showed a modest improvement across most of the Group's operations. Towards the end of the year we strengthened our Board and conducted a review of our strategy and operations, which we believe will better prepare us for the future. In November 2010 and in January 2011 we received two public, unsolicited, approaches from third parties, to acquire the Group, but at indicative price levels which your Board felt significantly undervalued the Group.

Trading

Underlying market conditions have progressively stabilised across most of the Group's European areas of operation during the year, although our performance was heavily impacted by severe weather conditions during the first quarter and again in December. The return to growth of our Middle East business was slower than we had originally anticipated, with a number of major projects delayed or not reaching their expected levels of demand in the year. Notwithstanding these unforeseen headwinds the Group has traded in line with our revised expectations and has delivered the further substantial reduction in net debt levels planned at the start of the year.

During the second half of the year, the Group's revenues returned to year-on-year growth across all European operations. This return to revenue growth, when combined with the improved operating leverage of the business following the cost reduction programmes undertaken in 2009, enabled the financial performance of the Group to improve progressively through the second half, until the interruption by poor weather in December, delivering an overall operating profit performance for the final six months of the year ahead of the same period in 2009.

Net debt levels were reduced by a further £41.8 million during the year, as the Group continued to restore its balance sheet strength and position itself for any sustained improvement in market conditions.

Financial Results

Overall Group revenues were marginally down for the year at £225.4 million (2009: £226.9 million), with increased revenues from the disposal of ex-rental fleet units broadly compensating for a 2% decline in rental revenues. The year on year rental revenue decline in the first half of the year was 8%, which was partly offset by a return to growth of 3% in the second half. Using consistent exchange rates with 2009, overall revenues increased by almost 1% to £228.3 million, with underlying rental revenues reducing by 1%.

Underlying operating profit1 for the year was £24.7 million (2009: £31.1 million), with margins reducing to 11.0% (2009: 13.7%). This decline in profitability was wholly incurred in the first half of the year and the Group returned to profit growth in the second half.

After amortisation charges of £2.4 million (2009: £3.5 million), the Group's operating profit was £22.3 million (2009: £27.6 million). There were no exceptional items incurred during the year (2009: exceptional items of £52.3 million, of which £9.6 million were cash costs).

Net interest costs reduced significantly to £11.7 million (2009: £17.1 million), reflecting the Group's reduction in net debt levels throughout 2009 and 2010. After interest costs, the Group's underlying profit before tax was £13.1 million (2009: £13.9 million). Using consistent exchange rates with 2009, the Group's underlying profit before tax was broadly unchanged. The profit before tax after amortisation charges was £10.7 million (2009: profit of £10.4 million before exceptional items and a loss of £47.8 million after exceptional items).

The Group's underlying profit after tax was £9.7 million (2009: £10.7 million), after incurring an effective tax rate of 25% (2009: 23%), which, when combined with an almost three-fold year on year increase in the average number of shares in issue (following the Group's equity fundraising in December 2009) has resulted in

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

underlying earnings per share of 5.94 pence (2009: 19.16 pence). After amortisation charges, the Group had an effective tax rate of 25% (2009: 9%) and a corresponding earnings per share of 4.90 pence (2009: earnings per share of 14.79 pence before exceptional items and a loss per share of 77.45 pence after exceptional items).

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the year were £70.2 million (2009: £80.4 million), again with virtually all of the year on year decline occurring in the first six months of the year. Cash generated from operations, including the sale and purchase of rental fleet assets and after movements in working capital, was £67.9 million (2009: £76.7 million). Net cash generated from operations, after payment of interest and tax was £51.8 million (2009: £56.2 million).

A total of £14.7 million (2009: £12.9 million) was invested in the Group's rental fleet and operational infrastructure, which was almost fully funded by the disposal of surplus and retired assets that generated £14.0 million in cash (2009: £10.7 million). After reflecting movements in amounts owing to equipment suppliers at the beginning and end of the year, there was a net outflow relating to capital expenditure of £0.9 million (2009: £5.7 million).

The Group's final deferred consideration obligation of £7.8 million, relating to the acquisition of The Platform Company in 2008 and which impacts the Group's net debt levels, was settled in the year, partly financed by a £1.0 million issue of shares.

The combination of healthy operating cash flows and controlled investment activity, together with a favourable foreign exchange movement of £5.3 million on Euro-denominated net borrowings, has enabled the Group to make further substantial progress in reducing its net debt levels by 23% to £140.3 million at the year-end (2009: £182.1 million). The corresponding debt to equity ratio was 78% (2009: 104%), with a net debt to EBITDA ratio of 2.00 times (2009: 2.26 times). The Group remains fully compliant with its banking covenants.

The Group's return on capital employed (ROCE) for 2010 was 6.6% (2009: 6.8%), based on operating profits as a percentage of average capital employed during the year of £338.4 million (2009: £404.7 million). The Group's pre-tax weighted average cost of capital is approximately 11.0%. As discussed below, a considerably greater focus is being placed on this performance measure going forward, as we recognise the need to improve ROCE from its current low point and return and maintain it at a level above the Group's cost of capital over the economic cycle.

Dividend

The Board is proposing a final dividend of 0.67 pence per share, an increase of 12% over the final dividend for 2009 and making a total dividend for the year of 1.00 pence (2009: 1.60 pence). Following the year on year increase in the number of shares in issue, the proposed total dividend will distribute £1.6 million to shareholders for 2010, an increase of 13% over the amount distributed for 2009. The final dividend, if approved, will be paid on 3 May 2011 to shareholders on the register at the close of business of 11 March 2011.

Business Plan and Operational Performance Review

As we emerge from the challenges of the last two years, it is vitally important to adopt strategies and management disciplines appropriate to the new market environment. In that context, during the fourth quarter, we have undertaken an exercise, with the assistance of advisors, to review the appropriateness of our business plans and to develop a roadmap for future earnings growth and increased returns on capital employed. We also wanted to review the detail of our operational structures and processes, following the integration of previous acquisitions and subsequent downsizing in 2009, to establish the scope for further performance improvement.

These studies are now substantially complete and are being turned into detailed implementation plans, specific for each of the Group's markets, against which the Board will carefully measure progress going forward. We will focus our capital deployment into geographic areas with the potential for strong and sustainable organic growth, and where we have, or can achieve through organic growth, market leadership. Where the economic outlook for markets is less attractive, we will look to downscale our activities. There is scope to enhance operational performance, particularly (but not exclusively) in commercial, technical and transport activities, that could yield annualised margin improvements over the next three years in the order of £5.0 million. A detailed assessment of the timing of the benefits and associated restructuring and transition costs will be completed during the first half of 2011. Over our three-year planning horizon we believe that these actions, all of which can be financed from operating cash flows, will enable us to increase shareholder value, by improving operating margins and increasing returns on capital to a level above the Group's cost of capital through a typical business cycle.

Board Changes

At the end of September I became Chairman of the Group, following David Hollywood's decision to resign due to the time pressures of his other business interests. We thank David for his contribution as Chairman since April 2008 and as a non-executive director from 2005. In view of the changed economic circumstances facing the Group, we recognised the need to strengthen the Board, and in December 2010, appointed Jan Åstrand and Andrew Wood as Non-Executive Directors, with Jan Åstrand becoming Chairman of the Remuneration Committee and Andrew Wood becoming Chairman of the Audit Committee.

Tim Ross, who has been a Non-Executive Director of the Group since 2005, has given notice that he will retire from the Board at the forthcoming Annual General Meeting on 20 April 2011 and I would like to take this opportunity to thank him for his contribution to the Board. We will address the replacement of Tim as the year progresses.

Summary and Outlook

We are a cyclical business and this particular downturn has been harsh and endemic. Nonetheless, we have retained strong, market leading positions across a number of national and local markets. Our cash generation during 2010 has reduced our net debt level to £140.3 million, and we expect this to reduce further in 2011, leaving the Group with a robust capital structure. The future investment requirements necessary to ensure our rental fleet remains highly competitive can be funded from the Group's annual cash flows. Furthermore, we enter 2011 with a clear strategy and a realistic programme for operational performance improvement. Since the year-end, trading has been in line with the Board's expectations, and the Board is confident that the Group is well placed to deliver significant value to shareholders over the medium term.

Review of Performance by Country

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

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

Total revenues increased by 5% during the year to £112.0 million (2009: £106.4 million), with rental revenues being broadly flat against the previous year whilst the sales of new and used equipment doubled.

The UK's rental revenue performance was influenced by the disruption caused by the severe weather during the first quarter of the year and the flow-through effect of pricing pressures seen in 2009. Through the year rental demand progressively increased, from both major and smaller accounts, and the UK produced year-on-year revenue growth for the second half of the year of 5%. Demand from non-construction customers continued to out-perform the construction sector, although construction revenues moved into year-on-year growth across the second half of 2010.

As demand improved across the year, our key focus has been on increasing rental prices, and, by the end of the year, discount levels had improved by around 7%. This will remain an area of focus through 2011.

Although pricing pressures have squeezed margins, particularly in the first half of the year, cost savings initiatives taken in 2009 and close management of operating costs during the year enabled the UK to deliver an underlying operating profit of £11.3 million (2009 £12.4 million). This decline in underlying operating profits was wholly weighted to the first half, with second half underlying operating profits being around £1.0 million ahead of the prior year. As a consequence of the revenue mix change away from rental revenues, margins declined to 10.1% from 11.7% in the previous year.

Germany

Our German business was severely affected by a very poor start to the year, most acute in the construction sector, where first half revenues were consistently in excess of 20% down on the prior year. This was principally caused by the extreme weather, with frozen ground conditions lasting into April in some parts of the country. We also believe that the full impact of the economic crisis on construction activities was seen later in Germany than in the UK. By year-end the run rate of year-on-year decline in construction revenues in Germany had reduced to below 5%. After being adversely affected by weather during January and February non-construction revenues remained solid throughout the remainder of the year, with year-on-year growth rates averaging 8% between February and December.

Total revenues fell by 9.4% to £47.3 million (2009: £52.2 million), which was almost entirely attributable to rental revenues. In the absence of further material cost savings within the current operational structure this revenue decline led directly to a reduction in underlying operating profits to £1.3 million (2009: £3.6 million), with margins falling to 2.7% (2009: 6.9%).

Belgium

Our Belgian business performed solidly in a market where demand was sluggish through the first three quarters of the year. Total revenues fell by 7.6%, although underlying rental revenues actually increased by 2% to £12.6 million (2009: £12.3 million). This was partly achieved through a shift in business in favour of non-construction activities, whilst construction revenues recovered by year-end after a weak, weather affected, first half.

Underlying operating profits fell to £2.4 million (2009: £3.1 million), which was almost entirely attributable to a reduced profit contribution from our Belgian-based equipment trading business, as they concentrated on the disposal of those surplus assets that had been identified for disposal and subject of an exceptional write-down in 2009. Belgium's underlying operating profit margin was 18.0% (2009: 21.5%).

France

Our French business grew strongly in 2010 as a result of improving availability and service levels in existing depots as well as the opening of a new depot in Marseilles at the start of the second quarter. The market in France has historically been dominated by generalist rental businesses, but it appears that, as elsewhere in Europe, the focus and service differentiation offered by a working at height specialist is appreciated by medium and large users, and consequently this has enabled us to grow our market share in a generally lacklustre market. Total revenues grew by 23.4% to £15.3 million (2009: £12.4 million) with virtually all of this growth being derived from rental revenues.

Market price pressures, which were extreme in the earlier part of the year, together with the drag of start-up costs from the new depot opening, meant that growth in rental revenues did not translate into a proportionate growth in underlying operating profits, which grew by just £0.6 million to £1.1 million (2009: £0.5 million). By year-end, price discounts had been improved around 3% from those at the start of the year and no further depot openings are planned for 2011.

Spain

Our Spanish business has performed well in the face of continued difficult market conditions. The International Powered Access Federation (IPAF) estimates the market has almost halved in size between 2008 and 2010. Revenues in our Spanish business fell by 16% to £7.9 million (2009: £9.4 million), with rental revenues falling 18% to £7.0 million (2009: £8.5 million).

Cost savings actions (including the transfer of fleet to feed the opening of the Marseilles depot in France) enabled the impact of the £1.5 million revenue decline to be limited to a modest reduction in underlying operating profits of £0.1 million to a breakeven position (2009: profit of £0.1 million).

It seems clear that, despite having a well managed and cash generative business, the outlook for the Spanish economy and market remains challenging for the foreseeable future. Against this background, the Group will continue to look at ways of improving the returns made on capital that is currently deployed in the Spanish market.

Middle East

The Middle East has been our area of greatest disappointment during 2010, relative to original expectations for the year. It is clear that although our business in the region, outside of Dubai, was slower to be affected by the global economic crisis, decisions taken to defer, refinance or cancel projects across the region has impacted our rate of growth in 2010.

The region is characterised by large, long-term (12-24 months is not untypical) petrochemical and infrastructure projects and as this long-term project profile protects activity levels going into a crisis (as witnessed by our continued strong trading in 2009) it makes the region slower to emerge into growth during the recovery. Nonetheless, strong oil commodity prices and generally robust public finances mean that the market fundamentals are strong and our market position is undiminished. We will proceed with caution in terms of investment and predicting a return to revenue growth, until we see firm physical evidence that stronger demand patterns are well established.

Total revenues for the region fell to £29.5 million (2009 £32.1 million) with rental revenues representing £2.1 million of the decline. Within a relatively fixed cost base this translated directly to a decline in underlying operating profit to £8.6 million (2009: £11.4 million), with margins reduced but still healthy at 29.2% (2009: 35.5%). We have taken steps to strengthen our management in the region in preparation for a resumption in project activities and remain confident that our business in the region and surrounding countries will be a significant contributor to the Group in future years.

Equipment Sales

Lavendon Sales, which principally operates out of Belgium, was again instrumental in allowing us to dispose of some 3,000 ex-rental units during the year to developing geographical markets, end users and international dealers, generating cash proceeds of £13.5 million (2009: £8.8 million).

Future Developments

Our markets have largely stabilised in 2010, with the exception of the Middle East where we still await a return to year on year revenue growth (this market was also the last to enter a period of year-on-year revenue decline). The impact of extreme winter weather conditions on our trading across Europe was substantial during 2010, reducing revenues across the first quarter and in the month of December. This impact, along with weaker than anticipated demand in the Middle East, meant that our original expectations for the year were not delivered.

As we moved towards the end of 2010, the Group's European markets were all experiencing year on year growth on a monthly basis. Against this background, and to ensure that the Group's strategy for future development was aligned with the economic and market outlook in the medium term, we undertook, with the assistance of external consultants, a review of our business plans and assessed the scope for operational improvements to our business performance. Based on the findings of these reviews, we will look to focus our efforts on those markets where through the retention or achievement of market leading positions, we could expect good quality growth in revenues. Consequently, over time, our capital deployment will migrate to these markets to ensure that the Group's overall returns on capital are maximised.

Our investment programme for 2011 will be a total of £15.0 million, net of any disposal proceeds, which should enable the Group's net debt levels to further reduce during the year. This level of investment for the year, together with planned future expenditure, will provide a well-invested and maintained fleet, which is capable of continuing to gain market share. Based on our plans, the Group's rental fleet can be refreshed and enhanced from operating cash flows as we go forward, without the need to re-leverage the Group's balance sheet or raise new equity.

With stability in markets and careful investment in high return assets and geographies the Group is well set to make progress towards improving its return on capital performance to sustainably acceptable levels.

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

Group statement of comprehensive income

For the year ended 31 December 2010

Group statement of changes in equity

In 2009 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 2009 year end.

Notes

2. Segmental analysis

The Group's chief operating decision maker (the "CODM") is the Group Board, comprising the two executive directors and direct reports from the operating subsidiaries and business functional units in the Group. The Group Board 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 primary profit measure used by the CODM is the underlying operating profit.

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.

Group funding represents the value of external borrowings held by Lavendon Group plc on behalf of the Group.

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 in August 2009.

Group funding represents the value of external borrowings held by Lavendon Group plc on behalf of the Group.

3. Exceptional items and amortisation

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

Notes:

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

(ii) Restructuring costs related 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 related to the Group's goodwill for Belgium, Germany and Spain (see note 7).

(iv) The other intangible asset impairment related to the other intangible assets acquired on the acquisition of dk Rental in Belgium and Spain (see note 7).

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

 4. Earnings per share

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

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

Earnings per share are calculated on the 164,011,025 ordinary shares in issue for the year ended 31 December 2010 being the weighted average number of ordinary shares in issue (year ended 31 December 2009: 56,148,882).

Diluted 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 164,011,436 (year ended 31 December 2009: 57,464,165).

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.

5. Dividends

The directors are proposing a final dividend in respect of the financial year ended 31 December 2010 of 0.67 pence per ordinary share which will distribute an estimated £1,102,000 of shareholders' funds. It will be paid on 3 May 2011 to those shareholders who are on the register at 11 March 2011, subject to approval at the Company's Annual General Meeting.

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.

6. Taxation

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

The taxation charge on the underlying profit is £3,312,000 (2009: £3,183,000). The taxation credit on amortisation charges and exceptional items is £660,000 (2009: £7,487,000).

In addition to the amount charged to the income statement, tax of £172,000 (2009: charge of £38,000) 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 charge to 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 charge/(credit) for the year is lower (2009: higher) than the standard rate of corporation tax in the UK of 28% (2009: 28%). The differences are explained below:

7. Intangible assets

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

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 operating segment is generally an individual country of operation.

The allocation of the goodwill by operating segment is shown in the table below:

8. Property, plant and equipment

During 2009 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.

9. Basis of preparation

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2010 or 2009 but is derived from those accounts. Statutory accounts for 2009 have been delivered to the registrar of companies, and those for 2010 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 498 (2) or (3) of the Companies Act 2006 in respect of the accounts for 2010 or 2009.

The Group financial statements have been prepared in accordance with EU endorsed International Financial Reporting Standards ("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, on a going concern basis, under the historical cost convention as modified by financial assets and liabilities (including derivative instruments) at fair value through the profit or loss. A summary of the more significant Group accounting policies is set out below.

The Group has adopted the following new and amended IFRS as of 1 January 2010.

i. IFRS 3 (revised), 'Business combinations', and consequential amendments to IAS 27, 'Consolidated and separate financial statements', IAS 28, 'Investments in associates', and IAS 31, 'Interests in joint ventures', are effective prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July 2009. The revised standard continues to apply the purchase method to business combinations but with some significant changes compared with IFRS 3. For example, all payments to purchase a business are recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the statement of comprehensive income. All acquisition costs are expensed.

IFRS 3 has no impact on the current year as no acquisitions were made.

ii. IAS 27 (revised) requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting treatment when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognised in profit or loss. IAS 27 (revised) has had no impact on the current period.

10. The Annual General Meeting of Lavendon Group plc will be held at Financial dynamics, Holborn Gate, 26 Southampton Buildings, London WC2A 1PB on 20 April 2011 at 11:30am.