Lavendon restructures in Germany and boosts Belgian fleet

Levendon Group has started a 12-18 month restructuring plan for its German business to improve returns, and will boost its Belgian and French fleets by transferring platforms from its Spanish operation, which is being closed.

Its revenues in Germany for the first six months of the year were up 10%, but Lavendon said its new management team in the country had started to reshape the business "so that it is more aligned with the market place and has greater capacity to deliver acceptable returns".

In its half-yearly financial statement, Lavendon reported revenues up 4% for the first half of the year, with its business growing in all regions except the Middle East, where revenues fell by 5% year on year.

The closure of the Spanish operation by the end of this year will see 250 machines moved to Belgium, which is performing strongly. In the Middle East the company will shift fleet and personnel to Saudi Arabia and Abu Dhabi, the growth markets in the region.

The company said its capital investment programme this year would be "limited", with total net spending of £15 million.

Lavendon continues to seek a new chief executive, and said the search was "progressing". For the moment, John Standen is acting as executive chairman and Jan Åstrand, Lavendon's senior independent director, is taking the role of chief executive for continental Europe.

The UK remains Lavendon's largest market and here the company reported revenue gains of 10% to £52.1 million. Lavendon said industrial and non-residential construction remained relatively weak in the half-year period, but said growth was the result of growing market share with the largest powered access users in the construction sector.

Revenues in France were also up, by 16%, through market share gains and the impact of a new depot in Marseille opened in October 2010. The French business will also see an increase in its fleet with some units transferred from Spain.

The strong performance in Belgium - with revenues up 17% - was driven by increased activity in both construction and non-construction. The fleet will be expanded by taking 250 units from the Spanish business.

Lavendon said it was disappointed with the performance in the Middle East, with monthly revenues only returning to year-on-year growth in the second quarter of the year. As a result it will switch fleet from Dubai and Qatar to the faster growing markets of Saudi Arabia and Abu Dhabi "where a number of large-scale, long-term projects are now underway."

John Standen, Lavendon's executive chairman, said; "We are pleased with the improved performance of the group in the first half of 2011. The modest recovery in our markets combined with operational improvements have both contributed to increased operating margins and return on capital employed (ROCE)."