Lavendon cherry picking success

Powered access equipment rental firm Lavendon has reported revenues and profits significantly ahead of expectations for the first half of 2012 as it seeks to capitalise on its European and Middle East markets.

The group is explicit in targeting the return on capital employed metric (ROCE), which rose from 7.9% in the first half of last year to 10% by the end of June this year. "It is our continued aim to drive ROCE to a sustainable level in excess of the cost of capital over the business cycle and we believe the Group is well positioned to achieve this," said Lavendon's Chief Executive Don Kenny.

The group's total revenues for the six months to June 30th increased by 8% to £114.5m, reflecting an increase in rental revenues of 4% and a £4.2m increase in the sale of new and ex-rental fleet equipment.

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Underlying operating profits increased by 31% to £13.6m (2011: £10.4m), with margins improving to 11.9% (2011: 9.8%).

Profit before tax came in at £9.5m, 55% ahead of 2011 while the interim dividend has been increased 102% to 0.75p per share.

Kenny said that trading "since the half year end has been in line with our expectations and we are well positioned to deliver another year of financial progress and, in the medium term, significant value to our shareholders."

Mention of the medium term is pertinent because since 2007 Lavendon shares have dropped 80%. Today's figures resulted in a rise of 7.44% by 11:23.

BS