LVD.L Regulatory News (LVD)

11 July 2013

Lavendon Group plc

First Half Trading Update

Profitability Continues to Improve and Board Confident of its Expectations for 2013

Lavendon Group plc ("Lavendon" or the "Group"), the market leader in the rental of powered access equipment in Europe and the Middle East, today issues the following trading update for the six months ended 30 June 2013:-

Summary

·; On track to deliver Board's expectations for the year 

·; Margins and profitability continue to improve

·; Group's revenues returned to growth in Q2 after adverse weather conditions in Q1

·; Strong revenue growth in the Middle East and France

·; On track to deliver annualised operational efficiency gains of £5 million by end of 2013

·; Annual cash flows funding 2013 investment programme

The Group's total revenue for the six months ended 30 June 2013, on a constant currency basis and excluding ex-fleet equipment sales, declined by 2% compared with the prior year, whilst rental revenues remained in line with 2012. In the second quarter, both Group total and rental revenues returned to growth and both increased by 1% compared to 2012 on the same basis. The rental revenue growth rates across the Group's markets for the first half by quarter are given below:

Percentages shown are on a constant currency basis and are rental revenues only (excluding revenues from the

sale of new and ex-fleet equipment)

As expected, our European businesses (including the UK) have all shown improved revenue trends in the second quarter, with both Germany and France demonstrating considerable progress. In the UK, revenues showed some improvement during the second quarter as weather conditions improved. However, the UK's relevant commercial and infrastructure construction sectors remain difficult markets, and whilst overall volumes are broadly in line with the prior year, this has been partly at the expense of pricing in order to maintain market share.

In the Middle East, our revenue growth continues to be strong, despite increasingly more difficult comparators, driven by robust demand and supported with additional fleet investment over the first half of the year. The market outlook for the region remains encouraging and the acceleration of our planned programme of investing additional capital into the region is delivering the anticipated enhancement in performance.

Our actions to improve the Group's operational efficiency and deliver an annualised benefit of £5 million by the end of 2013 remain firmly on track. These efficiency gains together with a lower interest charge for the period, has enabled the Group to make further progress in improving its margins and profitability in the first half of the year.

As expected, the Group's net debt level at 30 June 2013 increased to £104 million, on a constant currency basis relative to the 2012 year-end (FY2012: £97 million), reflecting the purchase of additional equipment to support our growth in the Middle East and the payment of amounts owing to equipment suppliers from the previous year-end. At actual exchange rates, the Group's reported net debt position at 30 June 2013 was £109 million. Our planned investment programme for 2013 is being funded from our annual cash flows, and the Board expects the Group's year-end net debt level to be broadly in line with the net debt of £97 million as at 31 December 2012.

Don Kenny, Chief Executive of Lavendon, commented:

"The strong revenue growth seen in our French and Middle East businesses in the first half has offset the revenue weakness experienced in our other markets, illustrating the strength and benefit of the Group's geographic diversity. Our margins and profitability have continued to improve in the period, ensuring we are well placed to demonstrate further progress in our key objective of increasing our return on capital employed during 2013. Whilst ever mindful of the continuing economic uncertainties in our European markets, the Board remains confident of delivering its expectations for the year."

Ends

Conference call

A conference call will be held for analysts at 8.30am (UK time) today (11 July 2013), the details of which can be obtained from FTI Consulting. A replay of the call will be available on the company's website after the event at www.lavendongroup.com.

Next Update

Lavendon will announce its Interim Results for the six months ended 30 June 2013 on Friday 30 August 2013.

For further information, please contact:

Notes to Editors

Lavendon is the European and Middle East market leader in the rental of powered access equipment. The quality and diversity of its hire fleet, coupled with the professionalism and accessibility of its depot network, provides an exceptional product range for customers.

Powered access equipment is designed to enable people to work safely, productively and comfortably at height. It can be used in a comprehensive range of applications, both inside and outside buildings and structures.

The Group has operations in the United Kingdom, Germany, Belgium, France, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The equipment fleet totals almost 20,000 units and the Group employs almost 1,650 people.