Interim Management Statement

At the Annual General Meeting to be held today at 11:00am Ishbel Macpherson, Chairman, will give the following update on the Group's progress since the start of the current financial year:

“The new financial year has begun satisfactorily and overall performance remains in line with management expectations. Areas such as water, waste, energy and transport provide promising opportunities and, although uncertainty in the wider construction sector continues, these key areas of focus for the Group give management confidence that we can make further progress in the current financial year.

Despite the quarter’s early trading being affected by the extended holidays which followed the late Easter and subsequent bank holidays in late April and early May, Group revenues on a like for like basis, excluding fleet equipment sales, in the three months to 30 June, 2011 are up 0.4% on the same period last year. Since April 2011, monthly comparatives have improved, with June 2011 up 6.2% on the prior year.

Within the UK & Ireland Asset Services division, which constitutes c.95% of Group revenues, like for like revenues were down 2.2%. Adjusting for the loss of the Network Rail contract in December 2010, revenues are up 0.5% on the prior year quarter. During the period, it was pleasing to note that UK yields were up 7.8%, driven by hire rates 8.8% higher, offset by volumes which were 5.8% lower.

Encouraging progress continues to be made in both of the newer operating activities, the International Asset Services and Training & Advisory Services divisions. Combined turnover in the first quarter was up 70.3% on the prior year, totalling over £3.5m (excluding fleet equipment sales), and the divisions are progressing towards profitability as planned.

Since the year-end, the Group has successfully completed the disposal of its Accommodation Hire operation for £34.9m to Elliott Group (retaining working capital of c.£3.6m). This has had the benefit of removing the only established, loss-making and non market-leading operation from the Group, while at the same time providing our customers with access to a more comprehensive product offering through our new partnership agreement with Elliott.

As a consequence of this disposal, net debt at the end of last week was reduced to £79.9m (from £113.9m at 31 March, 2011), in line with our expectations and illustrating the strength of our balance sheet (1.3x pro forma net debt/EBITDA at 31 March, 2011). Cash generation remains a key area of focus for management and, with a continued tight control over cash and costs, we aim to reduce net debt from its July seasonal high over the remainder of the financial year.

During the period, the Group has also successfully completed a refinancing of its banking arrangements, entering into a new £220m asset based revolving credit facility. This provides greater flexibility for future capital investment, as well as certainty with regard to our medium term funding arrangements, and is another key step in the Group’s ongoing recovery.

We are pleased to have recently announced the appointment of Dr Chris Masters as a Non-Executive Director. His appointment will take effect from today. We have also made very good progress in the selection of a new Finance Director and an announcement regarding an appointment is anticipated shortly.

With trading improving in line with expectations and having secured new banking arrangements and disposed of the loss-making Accommodation Hire operation, the Board considers that, with its market leading position, strong balance sheet and clear market approach, the Group is well positioned to take full advantage of wider economic recovery. In the meantime, we will continue to make steady progress, cautiously invest in our fleet, evolve our property base and drive efficiencies through the business.”