U.K.-based aerial rental specialist Lavendon posted £106 million (about U.S. $163.8 million) in revenue for the first half of 2010, a 7.5-percent decrease compared with £114 million for the same period last year. Losses for the first half totaled £232,000, compared with a £36.5 million loss a year ago. Profit before tax was £1 million.
Lavendon’s trading performance in the first half was impacted by continuing market conditions and adverse weather conditions across Europe at the beginning of the year. In the U.K. and Germany, the company’s revenue mix continued to shift away from the construction sector. The company expanded its branch network in France, maintained market share in Belgium and tightened cost control efforts to offset the revenue decline in Spain. The company performed well in the Middle East where it supported some major projects, and the company is positioned for growth as large petrochemical projects develop.
“We have seen progressive improvement in revenue levels through the second quarter,” said Kevin Appleton, Lavendon Group chief executive. “Our European operations, excepting Germany, are all now recording year-on-year revenue growth on a weekly basis. The recovery of business levels in Germany, after the effects of a prolonged winter, has proven more protracted than we had anticipated, whilst in the Middle East recent further delays to large projects, particularly in the petrochemical sector, are reducing our rate of volume growth compared to our earlier forecasts.”
While Appleton expressed confidence that the group’s trading performance would gather momentum in the second half of the year, he said the “timing and rate of recovery being experienced in our German and Middle East markets will be insufficient to enable the Group to meet its overall profit expectations for the year. Nevertheless, we are confident that, due to traditionally strong second-half cash flows and our ability to control capital expenditure, the Group is still on track to meet its year-end net debt expectations.”
The company said that utilization has improved as a result of aggressive fleet re-sizing. “The next step is to use the scarcity of supply that this creates to improve pricing yields, and, thereby, operating margins,” officials said. “This process is now underway, and there are encouraging signs in a number of our markets that yields are progressively improving.”
Lavendon Group is based in Lutterworth, Leicestershire, U.K.
