LVD.L Regulatory News (LVD)

18 April 2013

Lavendon Group plc

Interim Management Statement

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, will make the following Interim Management Statement, covering the period from 1 January 2013 to date, at its Annual General Meeting to be held later today:-

Summary

·; Board confident of delivering its expectations for the year 

·; Revenue trends outlined at the time of the 2012 results continued through first quarter

·; European revenues disrupted by prolonged periods of adverse weather

·; Continued strong revenue growth in the Middle East

·; 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 quarter ended 31 March 2013, on a constant currency basis and excluding ex-fleet equipment sales, declined by 4% compared with the prior year, with rental revenues declining by 2%. This quarter is historically the least significant trading period of the year, and this marginal decline is expected to be recovered as the year progresses. The rental revenue growth rates across the Group's markets for the 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 outlined at the time of our 2012 results in February 2013, our European businesses (including the UK) have been disrupted by adverse weather, causing delays to external projects and driving a change in the mix of fleet on hire away from our higher revenue generating units. The change in the quarter's mix was coupled with overall volumes remaining broadly in line with the prior year, while pricing, particularly in Belgium and France, remained under pressure. We expect the revenue declines seen in the first quarter to be recovered over the balance of the year, as we move beyond the Easter break, through the second quarter and into our traditionally more important trading months.

In the Middle East, our revenue growth continues to be strong, driven by robust demand and supported with additional fleet investment in the quarter. The market outlook for the region remains encouraging and as previously indicated we plan to allocate additional capital into the region in the coming months.

We continue to take actions to improve our operational and capital efficiency, and we are confident that these will underpin the delivery of our key priority of moving our return on capital employed ("ROCE") above our weighted cost of capital during the year. In particular, further progress has been made in achieving our objective of securing annualised operational efficiency gains of £5 million by the end of 2013.

As expected, the Group's net debt level at 31 March 2013 increased to £111 million, on a constant currency basis relative to the 2012 year-end, 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 31 March 2013 was £113 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 Group's first quarter trading performance is in line with the trends we reported in our 2012 results statement in February. It reflects the disruption to our European revenues caused by prolonged periods of adverse weather, largely offset by the continued strong performance of our Middle East business. We are continuing to achieve tangible improvements to our operational and capital efficiency, which will underpin our ability to deliver further progress in our key objective of improving our ROCE. Whilst ever mindful of the continuing economic uncertainties in our European markets, the Board is confident of delivering its expectations for the year."

Ends

Conference call

A conference call will be held for analysts at 8.00am (UK time) today (18 April 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 release its half year trading update in July 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 of 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, Saudi Arabia, the United Arab Emirates, Bahrain, Oman and Qatar. The equipment fleet totals almost 20,000 units and the Group employs over 1,600 people.