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Van Elle HoldingsPLC - Half-year Report

RNS Number : 5155A
Van Elle Holdings PLC
22 January 2020
 

 

Van Elle Holdings plc

 

22 January 2020

 

Interim results for the six months ended 31 October 2019

 

Van Elle Holdings plc ("Van Elle", the "Company" or the "Group"), the leading geotechnical engineering company offering a wide range of ground engineering techniques and services to customers in a variety of UK construction end markets, announces its interim results for the six months ended 31 October 2019.

 

Highlights

 

6 months ended 31 Oct 2019

6 months ended 31 Oct 2018

Change

%

Revenue (£m)

48.5

42.9

13.1

Underlying* EBITDA (£m)

3.7

5.2

(28.8)

Reported EBITDA (£m)

3.5

4.8

(27.1)

Underlying* operating profit (£m)

1.5

3.0

(50.0)

Reported operating profit (£m)

1.2

2.6

(53.8)

Underlying* profit before taxation (£m)

1.1

2.8

(60.7)

Reported profit before taxation (£m)

0.9

2.4

(62.5)

Underlying* earnings per share (p)

1.2

2.8

(57.1)

Reported earnings per share (p)

0.9

2.4

(62.5)

Dividend per share (p)

0.2

1.0

(80.0)

Operating cash conversion **(%)

41.8%

100.3%

 

Return on capital employed*** (%)

2.8%

6.4%

 

* before share-based payments and exceptional costs

**  defined as cash generated from operations divided by EBITDA less profit on sale of fixed assets

*** Return on capital employed calculated as underlying operating profit divided by net assets less cash and excluding loans and borrowings

 

The October 2019 results are not directly comparable to the previous periods as a result of the adoption of IFRS 16.  The impact on the results is not considered to be material and is explained in note 1

Summary highlights

·     Despite a challenging market backdrop, the benefit of self-help initiatives and revenue growth resulted in an improving performance as the half progressed

 

·     Revenue grew by 13.1% to £48.5m (H1 2019: £42.9m), reflecting growth in the housing and highways markets, contrasted with subdued conditions in commercial and rail markets

 

·     Underlying PBT reduced to £1.1m (H1 2019: £2.8m), reflecting a weak first quarter and adverse sales mix across the period 

 

·     Progress against the previously announced transformation programme remains on track, with phase 1 now substantially complete:

                                                                     

Simplified divisional structure implemented with each under new, strengthened leadership;

All operations now based at a single site in Kirkby in Ashfield;

Positive developments with strategic customer engagement and development of bid pipelines;

Operational performance stabilised, with a continued focus on margin improvement;

Ongoing investment in the development of new products and services to diversify capabilities

 

·     Cash performance was affected by some long running final accounts, but net debt is manageable at £10.4m (H1 2019: £5.6m) after adjustment for adoption of IFRS16

 

·     Due to subdued profitability in the first half the Board is recommending a reduced interim dividend of 0.2 pence per share (FY2019: 1.0 pence)

·      The Group's new Chief Financial Officer, Graeme Campbell, joins Van Elle from Severfield plc on 17 February 2020

 

 

Mark Cutler, Chief Executive, commented:                

 

"The business continues to improve and, despite challenging market conditions through the first half, we have made progress.  We have a clear strategy focused on three core markets - housing, infrastructure and regional construction - where we offer a broad range of end-to-end technical capabilities through our extensive and well-invested rig fleet. Good progress continues to be made in building long term and strategic relationships with our key customers in all sectors.

 

"Operational performance is stable with previous challenges now substantially addressed.  The simplified divisional structure with motivated, co-located teams under strengthened leadership means that we are more efficient and joined-up.  This allows us to focus even more intently on customer service, operational excellence, margin improvement and cash generation.

"Whilst mindful of ongoing volatility across construction markets and recognising a slower Q3 than previous years due to subdued rail activity, the Board expects some market improvement and further progress in the balance of the second half.  This is also supported by the benefits of ongoing improvements under the Group's transformation programme. Consequently, the Board expects to deliver results for the full year within the range of market expectations."

 

 

For further information please contact:

 

Instinctif Partners (Financial PR)

Tel: 020 7457 2020

Mark Garraway

James Gray

Rosie Driscoll

 

 

 

Peel Hunt LLP (Broker)

Tel: 020 7418 8900

Charles Batten

Mike Bell

Edward Allsopp

 

Van Elle Holdings plc - Interim Report to 31 October 2019

 

Strategic overview

Van Elle continues to be in transition, following a plan focused on improving the performance of the business through a range of organisational, commercial and operational actions whilst also putting in place the building blocks of future sustainable growth in line with our updated strategy.

Good progress is being made in delivery of the three-phase transformation programme and early benefits are starting to be evidenced despite the challenging market conditions that have prevailed though FY2019 and the first half of FY2020.

 

Phase one of the three-phase transformation programme is now substantially complete, with highlights including:

 

-     The restructuring of the business divisions is substantially complete with several key managerial changes made during the period aimed at improving the leadership capability and acting on area

Quick facts: Van Elle Holdings

Price: 32

Market: AIM
Market Cap: £34.13 m
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