LVD.L Regulatory News (LVD)

20 April 2011

Lavendon Group plc

Interim Management Statement

Lavendon Group plc ("the Group"), Europe's market leader in the rental of powered access equipment, will make the following Interim Management Statement, covering the period from 1st January 2011 to date, at its Annual General Meeting to be held later today:-

"At the time of the Group's preliminary results in March we stated that trading in the opening months of the year had been in line with the Board's expectations and this remains the case. The operating environment still remains difficult to predict, but during the first quarter Group revenues on a constant currency basis (excluding ex-fleet equipment sales) increased by 11% compared with the prior year, albeit a prior year period that was particularly weak due to adverse weather conditions.

Revenues in each of our European businesses have increased in the period, reflecting a combination of volume growth and pricing improvements. Our Middle Eastern revenues (the majority of which are generated from Saudi Arabia, Qatar and Abu Dhabi, all of which have been less exposed to the recent social and political unrest in the region) were down on the prior year with volumes broadly unchanged but average prices yet to recover. Rental revenue growth by territory for the first quarter over the same period last year, at constant currencies, is given in the table below:

Group EBIT and EBITDA margins and ROCE have all improved compared with the same period of last year.

As is usual during the first quarter, the Group's borrowing levels remain broadly unchanged from the reported year-end position. However, on a constant currency basis net debt reduced in the quarter from £140.1m to £137.5m. We remain comfortable with the Group's capital structure and continue to focus on a further significant reduction in net debt levels by the year end.

At the time of our preliminary results, we outlined the results of the business plan and operational performance reviews. These reviews were undertaken with the objective of identifying areas to improve margins and increase returns on capital to a level above the Group's cost of capital through a typical business cycle.

Having detailed the scope of the reviews' findings, the project development phase is now underway, involving management appointments, pilot studies and, in certain areas, the progressive implementation of identified initiatives. We look forward to updating shareholders on our progress in the coming months, and will report more fully on the improvements we envisage at the time of our interim results announcement in August.

We have stated that the majority of benefits from our operational and business plan reviews will accrue in 2012 and beyond. Developments in the first quarter of the year have reinforced our belief in both the timing and the magnitude of these benefits and accordingly the Board remains confident of the Group's ability to deliver improving shareholder value through the cycle."

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