Equipment hire firm Lavendon Group has said its resilience against the recession has improved over the past six months.
In a trading update ahead of the firm’s half year results for the six months to 30 June 2009, Lavendon said it had remained “strongly cash generative and operating with a lowered cost base”.
As a result bosses believe the firm’s resilience against the current economic climate has improved.
But for the five months to 31 May 2009 group turnover declined by 5 per cent compared with the same period last year.
In the UK, turnover has fallen by 17 per cent as trading conditions continue to be difficult across a number of sectors, particularly industrial and commercial construction.
This decline in turnover is being mitigated in part by continued success in winning new business with major contractors and by the successful completion of the operational integration programme, which is delivering the targeted annualised reduction in the UK’s cost base of £8 million (£6 million of which will be delivered in 2009).
Total turnover in the Middle East have grown by 39 per cent in local currencies (76 per cent on translation to sterling), with underlying rental revenues, as opposed to revenues from the sale of new equipment, increasing by 40 per cent in local currencies.
The group’s operating cash flows have been robust during the first five months of the year, and, with a tight control over capital expenditure, net debt levels have reduced in line with its plans.
Whilst market conditions facing the firm’s European operations remain difficult, bosses said Lavendon has made good progress in reducing its cost base and is trading in line with our expectations.