Pre Close Trading Update

RNS Number:0193N
Lavendon Group PLC
01 July 2003


1st July 2003

                                LAVENDON GROUP PLC

                            PRE-CLOSE TRADING UPDATE


Lavendon Group plc, Europe's market leader in the rental of powered access,
today issues the following trading update prior to entering the "close period"
before the announcement of its interim results for the six months ending 30 June
2003, which are to be published on 2 September 2003.

The Group's revenues for the first half of 2003 are expected to be some 4%
higher than in the corresponding period last year, despite operating in a
challenging environment with significant levels of global economic uncertainty.
However, this revenue growth will be insufficient to fully absorb the increase
in depreciation costs resulting from investments in the rental fleet made in
2002. Given the strong seasonality bias towards the second half of the year, the
increased depreciation cost has a disproportionate effect on the first half of
the year.

In the UK, revenue levels are stable compared with the previous year, despite
there being reduced demand in the manufacturing and telecommunications sectors,
which has put pressure on overall margins. In recent weeks, there has been a
general increase in activity levels, in line with the normal seasonality
patterns of the business.

The demand levels in Germany were predictably weak during the period, resulting
in a decline of first half revenues of approximately 5% compared with the
previous year. The effect of this revenue reduction has been partly mitigated by
reducing the cost base and re-deploying items of fleet to other markets with
stronger, short-term prospects. As in the UK, there has been a recent increase
in activity levels and, perhaps more importantly in the case of Germany, signs
of hire rate improvement.

The Group's other operations in Austria, France, Spain and the Middle East are
showing good year on year growth in revenues and improved margin performance. In
particular, in the Middle East, we are experiencing strong revenue and margin
growth as a result of the number of contracts commencing during the period.

The Group's cashflows continue to be strong and, as previously indicated, the
focus remains on reducing debt levels by the year-end. As planned, there have
been no capital commitments for rental equipment during the first half of the
year and this will continue until the present over-capacity in a number of our
markets has reduced.

Whilst we remain cautious about the economic backdrop generally, we are moving
into what is traditionally the busiest half of the year when we would reasonably
expect a marked improvement in demand levels. Consequently, we continue to
believe that the results for the year as a whole will be broadly in line with
the Board's previous expectations.

                                    - ends -


For further information please contact:-

Lavendon Group plc                                                  01455 558874
David Price, Chairman
Kevin Appleton, Chief Executive
Alan Merrell, Group Finance Director

Weber Shandwick Square Mile                                        020 7067 0700
Peter Corbin


                      This information is provided by RNS
            The company news service from the London Stock Exchange

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