The loss was caused by £43m of exceptionals for the impairment of goodwill, asset write downs and restructuring costs in its UK and European operations. However, the underlying performance shows a pre-tax profit of £5.3m – more than 60% down from £14.3m last year.
Despite a marked fall in revenue (from £65m to £52m) Lavendon’s UK operations are still the biggest sector in the group but operating profit more than halved £4.4m and some £10m of exceptionals turned this into a £7m loss. Finance director Alan Merrell said within the exceptionals is £9m of write downs on around 1,500 surplus machines that will be sold off within a year and the company expects annualised cost savings of around £11m following the integration of the various UK businesses.
ADVERTISEMENTSpain, where the recession in the housing and construction industry has been particularly acute, recorded a 30% fall in revenue to ВЈ5m and suffered more than 90% fall in pre-tax profit (to ВЈ42,000) meaning there was little to offset the ВЈ13m of exceptionals feeding directly through to a loss.
Business levels in Germany climbed slightly to £26m but profit slumped by two thirds to £1m with a £9.4m exceptional charge helping plunge the business into an £8.6m loss – similar to that in Belgium which recorded a 16% fall in turnover to £7.7m, a 30% decline in profit to £1.6m and £9.7m of exceptionals.
Only the Middle East recorded growth with revenue increasing by more than 75% to ВЈ16.9m and pre-tax profit doubled to ВЈ6.7m which, without exceptionals, fed through to the bottom line.
The company slashed capital expenditure by a factor of eight to under ВЈ5m in the first half allowing it to reduce net debt by more than ВЈ30m to ВЈ273m which it says is well within its banking covenants. In the City Lavendon shared fell 8p to 168p.
Looking forward Merrell said the markets do not appear to be getting more difficult but he was uncertain whether the seasonal second half increase in business would materialise this year.
Report analyses big plant owners’ performanceGenesco posts $2.7 million second quarter net loss
