Lavendon under pressure in all European markets

Lavendon's access rental businesses are under pressure in all its major European territories and the company said it was taking further action to reduce its costs. The company has revised downwards it previously announced profit forecast.

In an interim management statement, Lavendon said total revenues for the group fell 2% in the first quarter on a constant currency basis. Sales in the UK increased by only 2%, despite the fact that this year's quarter included revenues from The Platform Company, which was acquired last April. On constant currencies, German revenues fell by 8%, Spanish sales by 41%, and in France and Belgian by 14%.

The only bright spot for the group was the Middle East, where revenues grew by 49% in local currency.

Lavendon said; "In response to these tougher market conditions, we have taken actions to reduce the Group's operating cost base, and have further reduced our capital expenditure plan for the year from £20 million to £8 million. In addition, we are taking opportunities to accelerate the disposal of excess fleet, and have generated £1.2 million in disposal proceeds in the first quarter of the year.

"We believe that these actions will mitigate the expected weaker trading performance and will continue to deliver a material reduction in net debt levels through the course of the year, in line with our previous expectations."

Lavendon said that as a precautionary measure, it had agreed revised banking covenants. This increases the rate payable on debts by 125 basis points, but "creates additional covenant headroom and provides further flexibility in these testing market conditions."