West Midland platform rental specialist Lavendon Group turned in an impressive set of results, picked up a Southern rival in a £46 million deal, and announced a bumper dividend yesterday.
Chief executive Kevin Appleton was in bullish mood, after revealing that the Lutterworth-based business was in the black for the first time throughout all its UK operations, and overseas.
Lavendon - which describes itself as a 'powered access equipment renter' - operates in Belgium, France, Germany, the Middle East and Spain. Despite ongoing uncertainty in the equity markets, and suggestions that the construction sector is slowing, Mr Appleton said 2008 had begun well.
"Trading has been in line with expectations, and we have seen no impact on our end-user markets from economic uncertainty in the UK," he added.
"As such, the board looks to (the rest of) 2008 with confidence."
Lavendon has received a sharp trading boost from the Government's drive to increase workplace health and safety standards.
"The more legislation is put in place, the more benefit it has for our company," said Mr Appleton.
He also revealed that terms had been agreed for the acquisition of the Platform Group.
The complex cash-and-shares deal will ultimately cost Lavendon £46.1 million, over the next three years.
Slough-based Platform, which operates 4,000 platforms from a 10-depot network, generated pretax earnings of £7.5 million in its last financial year, on turnover of £31 million.
Mr Appleton said the additional capacity of the combined group would now enable Lavendon to scale back its planned capital expenditure programme for 2008. Finance director Alan Merrell expects that the expanded business will increase annual UK sales to more than £150 million.
He said Lavendon was already Europe's biggest provider of powered access equipment, before the Platform deal.
News of the group-wide profit and the acquisition came alongside the announcement of Lavender's year-end results to the end of December.
Profits were up an eye-catching 178 per cent to £21.4 million, underpinned by a dramatic increase in turnover, up almost 50 per cent to £186 million. Margins also rose sharply, from 10.2 per cent in 2006 to 14.1 per cent last year. Lavendon has focused in recent years on establishing its Nationwide Access brand throughout the UK.
At the same time, it has developed a regional business network, via the previous acquisitions of Panther, Kestrel, AMP and Higher Platforms.
The acquisition phase has been critical in propelling turnover upward.
Mr Appleton said there would now be an increasing focus on replacing under - performing rental equipment.
Nationwide Access and Platform will operate as separate businesses, until integration in the first half of 2009.
"We believe that our increased pool of assets will then be available for redeployment to the Middle East, where market conditions continue to be buoyant," said Mr Appleton.
Reflecting Lavendon's strong year-end performance, the annual dividend is being doubled to 9p.
Meanwhile, another rental equipment provider, Ashtead Group, also reported bumper profits yesterday.
Chief executive Geoff Drabble said third-quarter profits at the underlying pretax level were up from £11.3 million to £20.8 million.
The 82 per cent increase followed good performances across all Ashtead's operating divisions, and in the UK and the US.