Lavendon expects results for the year ended 31 December to be ahead of its forecasts.
The group's total and rental revenues for the year, on a constant currency basis and excluding ex-fleet equipment sales, increased by 8% compared with the prior year.
At actual exchange rates, the Group's total and rental revenues (excluding ex-fleet equipment sales) increased by 15% over the prior year.
In the UK (46% of total Group rental revenues), market share gains have driven strong volume growth across the year which combined with an improving pricing environment to generate a 9% year on year increase in rental revenues.
An update says: "In Q4, the rate of year on year revenue growth increased to 12% as fleet utilisation levels reached 77% (averaging 72% for Q4). This revenue growth, supported by fleet investment and better availability from the increased efficiency of our transport and maintenance operations, has delivered the expected year on year improvement in profitability and operating margins.
"Our Middle East business (26% of total Group rental revenues) has delivered strong rental revenue growth of 16% for 2016, despite increasingly difficult comparators as the year progressed. In Q4, fleet utilisation levels reached 81% (averaging 79% for Q4) as growth from our operations in the UAE, Kuwait, Oman and Qatar continued to more than offset a decline in our higher margin Saudi Arabian business. As expected, the level of free cash generated by the region has increased significantly in 2016, as we moderated our fleet investment compared to recent years and, through focused management, improved our working capital profile in the second half.
"Rental revenues in Continental Europe (28% of total Group rental revenues) increased by 2% for the year, with volume growth driving revenues higher in France (+11%) and Belgium (+1%) which more than offset a weaker performance in Germany (-3%). Although the performance of our German business was undoubtedly disrupted by the restructuring programme undertaken during the year, it successfully recovered the operating losses reported in the first half and the business returned to profit for the year as a whole."
Chief executive Don Kenny said: "The Group has delivered a strong performance in 2016 with growth in revenues driving increased profitability and margins. As a consequence, the Board now expects the Group's results for 2016 to be ahead of its expectations.
"As we move into 2017, whilst recognising the uncertainty in the macroeconomic outlook, the Group is well placed to build on the momentum developed during the past few years and to make further progress in the year ahead."