Lavendon makes exceptional charge of £43.2 million

Lavendon Group's revenues fell by 16% on a constant currency basis to £114.0 million for the first six months of the year (7% down in Sterling). Operating profits before one-off costs were down 32% to £14.1 million, but exceptional charges of £43.2 million produced an operating loss of £31.2 million.

The exceptional charges included £3.6 million for restructuring in the UK, Germany and Spain, £8.8 in asset write downs in the UK, France and Spain, and a £30.8 million impairment charge in the company's goodwill. These charges were made in light of the difficult market conditions and the uncertainty over the economic outlook.

The company's revenues fell in all of its territories with the exception of the Middle East. In local currency terms, sales were down 48% in Spain, 22% in France and Belgium, 13% in Germany and 20% in the UK, its largest market.

In the Middle East, sales grew 39% in local currency terms to £16.9 million, the result of a 45% increase in the fleet size (equivalent to an additional 500 machines).

Elsewhere, the company has been shedding fleet and reducing its workforce. Over the first six months of the year, 14% of staff (270 people) have let the company and the fleet size has been reduced by 10% (2500 units).

Kevin Appleton, chief executive of Lavendon, said; "Market conditions in the traditionally quieter first half have been challenging, but the business traded in line with our revised expectations. The Group was strongly cash generative in the period and our debt reduction plan for the year is on track.

"As European market leader, the current economic conditions are providing us with an opportunity to grow our market share, which we will look to continue to do in the second half of the year. We will also continue to manage the business tightly, with a focus on generating cash, to ensure we meet our debt reduction plan for the year."