LVD.L Regulatory News (LVD)

17 April 2014

Lavendon Group plc

Interim Management Statement

Encouraging Start to 2014

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 2014 to date, at its Annual General Meeting to be held later today:

"Summary

· Board confident of delivering its expectations for the year 

· Rental revenues increased by 8% in first quarter

· Strong rental revenue growth in the UK, France and the Middle East

· Revenue growth driving improved profitability, margins and ROCE

· Annual cash flows to fund 2014 investment programme

The Group's total revenue for the quarter ended 31 March 2014, on a constant currency basis and excluding ex-fleet equipment sales, increased by 7% compared with the prior year, with rental revenues increasing by 8%. This year on year growth reflects both an improvement in the Group's underlying trading and relatively weak comparators due to the previous year's adverse winter weather and the timing of Easter. The rental revenue growth rates across the Group's markets for the last six months 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)

Our European businesses have shown good overall growth in the quarter, with volumes consistently ahead of the prior year and further pricing improvements being seen in our UK business. In Germany, whilst volumes were ahead of the prior year, the pricing environment has remained competitive.

In the Middle East, the rate of revenue growth regained momentum during the quarter, despite stronger comparators, driven both by volume and pricing increases. The market outlook for the region continues to be positive and we will allocate, as planned, additional capital into the region in the coming months.

The growth in Group revenue in the quarter has driven improved profitability, operating margins and returns on capital employed ("ROCE"). The Board's primary focus remains on improving the Group's ROCE above our average weighted cost of capital across the business cycle, and we expect to make further progress towards this objective in 2014.

As expected, the Group's net debt level at 31 March 2014 increased to £109 million, on a constant currency basis relative to the £97 million at the 2013 year-end, due to the planned purchase of additional equipment to support our growth 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 2014 was £108 million. Our planned investment programme for 2014 will be funded from our annual cash flows, and the Board expects the Group's year-end net debt level to be broadly in line with that at 31 December 2013."

Don Kenny, Chief Executive of Lavendon, commented:

"The Group's first quarter performance was encouraging, with an underlying trading improvement being seen across nearly all our markets. In particular, the revenue growth in the UK, France and the Middle East has been strong, driving improvements in our profitability and margins. Whilst recognising the continuing economic uncertainties in our European markets, the Board is confident of making further progress during the year and delivering its expectations for 2014."

Ends

Conference call

A conference call will be held for analysts at 8.00am (UK time) today (17 April 2014), 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.

Capital Markets Day - London - 10 June 2014

Lavendon will be hosting an afternoon event to provide further insight into the Group's UK & Middle East operations and markets. Further information can be obtained from FTI Consulting.

Next Update

Lavendon will release its half year trading update in July 2014

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, Bahrain, Kuwait, India, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The equipment fleet totals over 20,000 units and the Group employs over 1,650 people.