12th Jan 2012 07:00
12 January 2012
Lavendon Group plc
Trading Update
Lavendon Group plc ("the Group"), the market leader in the rental of powered access equipment in Europe and the Middle East, today issues the following trading update for the year ended 31 December 2011:
"We are pleased with the progress achieved across the Group in 2011.
The Group's overall revenues for the year to 31 December 2011, on a constant currency basis (including new equipment sales but excluding ex-fleet equipment sales and the Group's discontinued Spanish business), increased by 7% compared with the prior year in line with the Board's expectations. In the fourth quarter, Group revenues increased by 5% compared with 2010 on the same basis.
During the fourth quarter, revenues from our UK business continued the trend of growth seen in the earlier quarters of the year, albeit at a reduced rate due to progressively stronger comparatives. A combination of volume and pricing increases has delivered revenue growth across the UK and Continental European businesses, with Belgium and France beginning to benefit from the redeployment of the Spanish fleet. The UK has also made further progress in improving pricing in the period such that this more than compensated for some volume decline following the completion of major projects during the quarter. In the Middle East, as previously reported, demand patterns remain unpredictable, although the recovery of the Abu Dhabi and Saudi Arabian markets continues to gain momentum which, together with our leading market position, has driven an increase in the rate of year-on-year rental revenue growth. A comparison of the rental revenue growth rates across the Group's markets by quarter is given below.
Market |
Contribution to Total Group Rental Revenues |
Q1 2011 Rental Revenue Growth Y-O-Y |
Q2 2011 Rental Revenue Growth Y-O-Y |
Q3 2011 Rental Revenue Growth Y-O-Y |
Q4 2011 Rental Revenue Growth Y-O-Y | 12 months to 31 Dec 2011 Rental Revenue Growth Y-O-Y |
UK | 50% | 11% | 8% | 7% | 4% | 7% |
Germany | 23% | 17% | 4% | 4% | 4% | 7% |
Belgium | 7% | 24% | 12% | 9% | 10% | 13% |
France | 8% | 20% | 12% | 8% | 14% | 13% |
Middle East | 12% | -7% | 2% | 8% | 17% | 5% |
Group | 100% | 11% | 6% | 7% | 7% | 8% |
Percentages shown are on a constant currency basis and are rental revenues only excluding revenues from new and ex-fleet
equipment sales and from the Group's Spanish business, which has now closed and which will be reported as a 'discontinued
business' in the Group's year end accounts
The combination of revenue growth and actions to enhance operational and capital efficiency has delivered a marked improvement in the Group's profitability, margins and return on capital employed ("ROCE") for the year. Our ROCE performance has demonstrated substantial progress in moving towards our near term aim of returning ROCE to above the weighted average cost of capital of the Group over the business cycle. In particular, our German business is starting to benefit from the actions taken to improve profitability and deployment of capital in line with our aim to substantially improve its relative contribution to the Group's performance. As we move into 2012, we anticipate further progress in our key performance metrics.
The Group's net debt level reduced by £33 million during the year to £107 million at 31 December 2011 (2010: £140 million) reflecting the Group's strong cash flows, a modest level of investment and a favourable FX movement of £2 million. Whilst investment levels will increase during 2012, as previously indicated, the Board still expects that further progress will be made in reducing the Group's level of borrowings during the coming year."
Don Kenny, Chief Executive said:
"The Group made good progress in 2011 with all operations growing revenues and the actions taken to improve operational efficiency and capital deployment delivering the expected benefits. As a result, there has been a marked improvement in the Group's profitability, margins and ROCE for the year. In addition, the improved performance has facilitated a significant reduction in the Group's net debt levels and has positioned us well as we move into 2012. The Board believes the Group's results for 2011 will be in line with expectations."
Ends
For further information, please contact:
Lavendon | ||
Don Kenny, Chief Executive Alan Merrell, Group Finance Director | Tel: +44 (0)1455 206 736 | |
FTI Consulting (formerly Financial Dynamics) | ||
Jonathon Brill Caroline Stewart Alex Beagley | Tel: +44 (0)207 831 3113 |
Conference call
A conference call will be held for analysts at 9.30am GMT on 12 January 2012, the details of which can be obtained from FTI Consulting. A replay of the call will be available on the company's website after the event at www.lavendongroup.com.
Next Update
Lavendon Group will release its preliminary results on 29 February 2012
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