Full year trading update
26 April 2019
Van Elle Holdings plc
("Van Elle" or the "Group")
Full year trading update
Van Elle, 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, is issuing the following trading update for the year ending 30 April 2019.
The business continues to make good progress on its transition plan, announced in January 2019, in terms of improved operational efficiency and a more effective commercial approach.
In terms of current year performance, the Group has experienced a level of uncertainty in its markets, particularly in the infrastructure sector, in the latter part of the year. This has meant that, despite encouraging progress in winning work, some contract award and start dates have been delayed by customers. As a result, whilst volumes in the fourth quarter have been the strongest of the year to date, sales for the full year are expected to fall short of levels previously expected by circa 3%. This reduction in forecast sales for the current year is expected to result in the Group delivering full year adjusted PBT slightly below the lower end of the range of market expectations.
The previously highlighted operational weaknesses in the Piling Division are being addressed, with the margins improving in Q4, as expected. A new, experienced director of the Piling Division will join in early June 2019. Further streamlining and business simplification across the Group has resulted in annualised cost savings ahead of targets previously announced.
In addition, cash management has been good and will result in net debt at year-end improved against previous forecasts and below the £5.6m reported at the end of H1.
Looking ahead, the fourth quarter run-rate is expected to remain solid into the forthcoming year, as recently secured contracts mobilise and with ongoing enquiry levels remaining strong. Reflecting the improved commercial approach, which is focussed on longer term partnerships, the Group has a record current order book of £35m (April 2018: £25m) and is preferred bidder on a further £25m of contracts. This includes approximately £10m of Smart Motorway schemes, secured in the fourth quarter, and a record order book of £12m in the housing sector for the Group's integrated piling and foundation solutions for national housebuilders.
Despite the uncertain market conditions, the Board is very encouraged that the improvement actions being taken are generating tangible operational and commercial benefits. The momentum entering the new year underpins the Board's confidence in the prospects for the Group
For further information please contact:
Instinctif Partners (Financial Public Relations)
Tel: 020 7457 2020
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Peel Hunt LLP (Nominated Adviser and corporate broker)
Tel: 020 7418 8900
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