Lavendon profit jumps 43% for first half of 2008

Lavendon, parent company of Nationwide Access, Panther Platforms and many other access specialists in the UK and aboard, has reported a 43% increase in pre-tax profits to £11.9m for the first six months.

UK revenues were up 32% to £62m, including a contribution from the Platform Company which was purchased in April, and operating margins increased to 16.5% from 15.8% in the first half of 2007.

Because of the series of other acquisitions over the past year, like-for-like figures are not available but Lavendon’s chief executive Kevin Appleton told CJ organic growth would "probably be solid low single digit".

Having bought the Platform Company which had a young fleet of 4,000 machines, Appleton was able to reduce UK fleet investment by £20m for the year and cancelled some orders from the newly acquired companies. 

The purchase of DK Rental tripled revenue at its French and Belgium operation to £13.7m and moved the business into profit, while business in Spain improved by 169% to £7m, of which £1.4 dropped to the bottom line.

The Middle East saw rental income grow by a third to post an operating profit of £3m while exchange rate movement saw Germany’s 5% decline in revenue (due to rationalisation) turned into a 9% increase and profit climb to £3.2m.

The purchases, investments and currency exchange movements have caused the group’s net debt to jump from £185.7m at the end of last year to £258.7m or 3.2 times its pre tax, interest, depreciation and amortisation earnings. Appleton said this reflects the full cost of purchasing the Platform Company, but only three months of revenue.

“If necessary we could step out of cap ex on fleet renewals for a couple of years and clear that debt,” said Appleton.

Appleton said no purchasing commitments have yet been made for 2009.

The company said there is little sign of over supply in the market and the manufacturers are taking a ‘responsible approach’ by reducing cost and capacity. So despite the uncertain economic climate there was no marked change in demand with the exception of Spain where Appleton said there has been a 27% increase in capacity.