U.K. high-reach specialist Lavendon Group plc last week said its 2009 pre-tax profit will be lower than earlier estimates because of tough trading conditions in Europe. The company agreed on revised banking covenants amid uncertainty in its end-user markets.
The revised covenants would increase the margin payable on borrowings by 125 basis points, but create additional covenant headroom and provide further flexibility.
The groupâ€™s revenues for the first quarter increased by 8 percent compared with the same period as last year. In the U.K., revenues increased 2 percent, supported by the full-year effect of the acquisition of The Platform Company in April 2008. The companyâ€™s German business increased 6 percent year over year in sterling terms, although in local currency revenue declined 8 percent. First-quarter activity levels were affected by a harsher winter than in recent years, delaying construction activities in southern and eastern Germany. The market situation was similar in France and Belgium, the company said, with local currency rental revenues dropping 14 percent.
In Spain local currency revenues declined 41 percent with a dramatic drop in demand.
The company reduced its capital expenditure plans for 2009 from ÂŁ20 million to ÂŁ8 million.
Lavendon is based in Lutterworth, Leicestershire, United Kingdom.