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Secondary Recommendation

Lavendon Group - "Self-help" programme driving surge in eps growth

March 2013

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • LVD
  • Price:
  • 170p
Sometimes, the most fantastic share price gains can come from turnaround situations in which new management are parachuted in to restore a company's fortunes, following a period of struggle. In the case of Lavendon, which hires out powered access platforms to provide a safe way of working at height, this process is already underway with its key measure of return on capital employed (ROCE) having recovered from 6.6% in 2010 to 10.9% last year. However, after meeting with chief executive, Don Kenny, over the month, we believe Lavendon is only part-way through its recovery cycle. The keynote is that even without much market growth we still expect a lucrative cycle of upgrades to forecasts on the back of an ongoing “self-help†program, wh ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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