LONDON (Alliance News) - Lavendon Group PLC said Friday that pretax profit and revenue rose in its first-half despite currency headwinds on its overseas earnings, buoyed by strong growth in its key UK and Middle East businesses.
In it half-year results for the six months to June 30 the powered access equipment provider said pretax profit rose 10% to GBP12.3 million from GBP11.1 million last year. Statutory pretax profit was up to GBP10.8 million from GBP8.6 million the previous year.
Revenue was also higher for the period, up 3% to GBP117.4 million from GBP113.6 million in the comparable in 2013.
Lavendon Group also increased its dividend to 1.40 pence per share from the 1.15 pence per share paid last year.
The company said it saw strong growth in its key UK and Middle East businesses during the first-half, with the improved performance reflecting its "actions taken to re-energise our UK business towards the end of 2013, as well as our strategic decision to deploy additional capital into our Middle East operation."
UK rental revenue was up 11% to GBP54.4 million from GBP49.1 million, reflecting a combination of increased volumes, a more favourable fleet mix and a further improvement in pricing, said Lavendon.
In the Middle East division rental revenues increased 13% in local currency. Once translated to sterling the company said revenues were up 3% to GBP22.7 million from GBP21.8 million last year, attributed to the year-on-year strengthening of sterling against the US dollar and continued volumes growth and further price improvement across the region compared to the prior year.
Lavendon said the strength of these businesses more than offset the continued weakness seen in some of its Continental European markets, enabling progress to be made in the group's overall financial performance despite the increased exchange rate headwinds on overseas earnings.
Trading since the start of the second-half has remained in line with board expectations, said Lavendon, with the company confident that the group is well positioned to deliver its expectations for 2014 and substantial shareholder value over the medium term, despite the continuing economic uncertainty within its Continental European markets and the strength of sterling.
In a separate statement Friday the company said it has refinanced its funding arrangements. The equipment rental company has extended its existing GBP50 million and EUR60 million revolving bank facilities to July 2019 at a lower margin cost, as well as issuing two EUR17.5 million loan notes on the US Private Placement market to mature in August 2012 and August 2024.
The group now has combined debt facilities of around GBP175 million which Lavendon said "provides a robust medium to long-term diversified financing package, with significant liquidity, that will support the development of the Group in the coming years."
Shares in Lavendon Group were Friday trading 2.18% lower at 201.50 pence per share Friday morning.
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
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