Last checked at 22 Nov 2017 07:00
22 November 2017
Van Elle Holdings plc
("Van Elle" or the "Group")
Half-year trading update
Van Elle, the geotechnical engineering contractor 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 ahead of announcing its interim results for the six months ended 31 October 2017 on 25 January 2018.
Overall trading in the first half of the financial year has been positive and the Board expects to report turnover of approximately £53m (H1 2016: £43.1m) with underlying profit before taxation increasing by approximately 15% (H1 2016: £4.7m).
The General Piling division has performed strongly in the period, benefitting from an enlarged range of rigs and techniques. Divisional revenues have increased against the comparative period last year, with further operational efficiencies in delivery resulting in good profit growth.
In Ground Engineering Products, the Group's proprietary Smartfoot® foundation system continues to gain share in the market and operating performance in the period reflects the benefits of the expanded manufacturing capacity.
Ground Engineering Services' revenues have also been encouraging. The division has seen strong growth from the recently established Scottish business, which has enabled the Group to increase its activity in this region significantly, albeit overall margins have been impacted by remedial works carried out in the Ground Stabilisation operating unit.
Performance in the Specialist Piling division has been more mixed, with market and operating conditions in the Group's rail business remaining challenging in the first quarter, as indicated in the trading update on 12 September 2017. Whilst rail turnover growth has been reasonable, the commercial parameters in two specific electrification contracts have resulted in a dilution to gross margin, with a result that divisional profit will be below that in the comparative period. Pleasingly, margin performance has improved consistently during the second quarter and expectations for the second half are for a return to satisfactory levels.
Cash performance in the half has been good, with the strong operating cash flow generated. The Group has also continued to invest, acquiring nine new rigs which will enhance its service offering.
The Group has a seasonal weighting towards a stronger second half and the Board expects this will be the case again in the current year. As the Group enters H2, enquiry levels are encouraging and the current order book as at November remains strong. The Board continues to monitor market conditions closely and whilst mindful that the Group is subject to clients' decisions regarding contract call-off timing, its expectations for the full year remain unchanged.
Enquiries:
Instinctif Partners (Financial Public Relations) | 020 7457 2020 |
Mark Garraway |
|
James Gray |
|
Rosie Driscoll |
|
|
|
Peel Hunt LLP (Nominated Adviser and corporate broker) | 020 7418 8900 |
Charles Batten |
|
Mike Bell |
|
Justin Jones |
|
Market Abuse Regulation
The information contained within this announcement is deemed by Van Elle to constitute inside information as stipulated under the Market Abuse Regulation. Upon the publication of this announcement via a regulatory information service, this inside information is now considered to be in the public domain.