Lavendon Group Plc (LVD) rose to the highest price in more than four years after the U.K. supplier of lifts and platforms for construction said its success in building business in the Middle East will continue this year.
Lavendon’s growth in the region, led by Saudi Arabia, accelerated throughout 2012 as it shifted resources from Germany. Rental revenue surged 35 percent in the Middle East last year and full-year earnings will be at the “upper end of the board’s expectations,” Lutterworth, England-based Lavendon said today in a statement.
The stock rose as much as 10 percent to 159 pence, the highest since October 2008, and was up 7.1 percent at 12:01 p.m. Lavendon was the second-biggest advancer on the FTSE All-Share Index (ASX) and has gained about 72 percent in 12 months.
Equipment rental companies have been among the biggest gainers on the FTSE All-Share Support Services Index (FASUPP) of 51 companies in the past year, with Lavendon, Ashtead Group Plc (AHT) and Speedy Hire Plc (SDY) among the top five advancing stocks. Ashtead leads rental competitors, more than doubling in that period as it gains business in the wake of superstorm Sandy in the U.S.
Lavendon said it’s betting on the Middle East, “given the encouraging market outlook and our plans to direct further investment into the region.” The company has disposed of surplus fleet in Germany, where sales declined 6 percent last year, and is shifting investment to the Persian Gulf region.
The rental business, which includes scissor lifts for use in warehouses and truck-mounted platforms for telecommunications work, got 15 percent of sales in the Middle East last year.
Lavendon, led since October 2011 by Chief Executive Officer Don Kenny, still gets the largest share of its business in the U.K., with 48 percent of rental revenue in 2012. Sales in Britain recovered in the fourth quarter, resulting in broadly flat growth for the year as higher prices compensated for lower volume.
The shift of investment to the Middle East will continue this year, including by redeploying or disposing of excess fleet capacity in Belgium, Lavendon said. Its Gulf region operations are in Saudi Arabia, the United Arab Emirates, Bahrain, Oman and Qatar.
More than 1.1 million Lavendon shares traded as of 12:01 p.m., triple the average daily volume in the last three months. The company is scheduled to release full-year results in March.
To contact the reporter on this story: David Risser in London at firstname.lastname@example.org
To contact the editor responsible for this story: Heather Harris at email@example.com