Van Elle Expects Lower First Half Revenue On Quiet First Quarter

LONDON (Alliance News) - Van Elle Holdings PLC said Monday it expects its first half revenue to be lower than last year due to a "relatively quiet" first quarter.

The piling and ground engineering firm said its first half revenue is expected to about about GBP43.0 million compared to GBP52.6 million the year before. Van Elle's underlying pretax profit is expected to be GBP2.8 million, halved from last year's GBP5.4 million.

The company said the decrease represents the "subdued activity" levels in the first quarter, due to a "challenging period" for the UK construction market.

Van Elle said, however, market conditions were "more supportive" in the second quarter and new contract starts have "progressively gained momentum".

The company said the year has been an "important one of transition". New Chief Executive Officer Mark Cutler, who was hired in August, has looked to streamline the firm's operations, generating about GBP600,000 of annualised cost savings.

Van Elle said a provision of GBP300,000 has been included for the first half for exceptional restructuring costs.

Van Elle's net debt reduced in the period to GBP5.6 million from GBP5.9 million at the end of 2017 and is expected to decrease further in the second half.

Cutler said: "Since joining the business in August I have been taking action to refine the group's commercial approach, streamline operations, strengthen the leadership team and re-focus on our key customers. This is already creating a strong platform from which to pursue our growth strategy.

"It is pleasing to see momentum building into the third quarter with growing demand for our specialist services and a strong orderbook providing good forward visibility. The group is well placed to benefit from the significant opportunities we see in the second half and beyond."

Van Elle said the "positive" momentum exiting the first half continued into the start of the third quarter, with the company's order book 16% ahead of last year at GBP32 million from GBP27.6 million.

The company expects its full year results to be "similar" to last year.

In the financial year ended April 2018, Van Elle reported a pretax profit of GBP9.2 million on revenue of GBP103.9 million.

Shares in Van Elle were down 5.3% Monday at 76.22 pence each.