Lavendon achieves 5% rental rate growth

Aaron Morby 11 years ago
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Rental and powered access hirer Lavendon lifted underlying profits 65% to £22m in the year ending December.

Revenues were up 4% at £225.4m and underlying operating profits were up 21% at £30m.

The firms also revealed it had struck a financing deal with banks to giving it access to £150m, which Lavendon said would be used to support growth over coming years.

UK revenue remained flat at £112m, with underlying operating profit edging up from £11m to £14m last year.

Rental revenues in the UK increased by 7% during the year to £108m (2010: £100.9m), principally driven by a 5% year-on-year pricing improvement and good volume growth from the first eight months of the year.

Volumes peaked in September and then declined towards the year-end as a number of major projects completed.

Lavendon said the growth in rental revenues fully absorbed the anticipated decline in sales of old fleet machines.

The balance in group performance was made up by Germany, where profits improved to £4.1m, Belgium, France and the Middle East.

Chief executive Don Kenny said: “The group made good progress during 2011 in improving the financial performance of its operations.

“As we move into 2012, we are encouraged by the operational efficiency gains made to date and the impact that these will have on the group’s operating leverage as revenue growth is delivered.

“Our improvement plans for Germany are being implemented and our Middle East region is now demonstrating a sustained recovery in revenues.

“The increased level of capital investment in the group’s rental fleet planned for 2012 will be funded from our annual cash flows, still allowing free cash to be generated to reduce net debt levels further.”

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