U.K. aerial equipment specialist Lavendon Group plc, last week issued a trading update for the six months to June 30, before entering its close period prior to the announcement of its interim results on Aug. 28.
“Overall, with our business remaining strongly cash generative and operating with a lowered cost base, we believe that our resilience against the current economic climate has been improved during the period,” the company said. “For the five months to May 31, Group revenues have declined by 5 percent compared with the same period last year. On a constant currency basis revenues have reduced by 13 percent. The prior year comparator includes two months of contribution from the acquisition of The Platform Company, which was completed on April 1, 2008.”
In the U.K., revenues have fallen by 17 percent as trading conditions continue to be difficult across a number of sectors, particularly industrial and commercial construction. This decline in revenues is being mitigated in part by continued success in winning new business with major contractors and by the successful completion of the operational integration program, which is delivering the targeted annualized reduction in the U.K.’s cost base of £8 million — £6 million of which will be delivered in 2009 (about U.S. $13.1 million and $9.8 million respectively).
Revenues from the company’s German business in local currency revenues have reduced by 11 percent, reflecting the subdued level of demand experienced in recent months, particularly across the period of public holidays in April and May.
In Belgium and France, local currency rental revenues have declined by 18 percent against the same period last year, against a background of reducing demand. However in recent weeks there have been some encouraging signs in Belgium that activity levels are starting to strengthen.
Market conditions in Spain continue to be extremely harsh, with local currency revenues falling by 42 percent year-on-year. Despite this deterioration in revenue the company says its business remains profitable and continues to be cash generative.
Total revenues in the Middle East have grown by 39 percent in local currencies, with underlying rental revenues, as opposed to revenues from the sale of new equipment, increasing by 40 percent in local currencies. This revenue growth has being driven by the securing of several new supply contracts across the region and is delivering a strong improvement in operating margins. The ability to continue to grow revenues will be further supported by the transfer of additional machines to the region during the remainder of this year.
The Group’s operating cash flows have been robust during the first five months of the year, and, with a tight control over capital expenditure, net debt levels have reduced in line with the company’s plans.
Lavendon is based in Lutterworth, Leicestershire, U.K.
