REG - Van Elle HoldingsPLC - Trading Update

Van Elle HoldingsAnnouncement

22/05/2024 07:00

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RNS Number : 3734P  Van Elle Holdings PLC  22 May 2024

 

Van Elle Holdings plc

('Van Elle', the 'Company' or the 'Group')

 

Full year performance in line with expectations; well positioned in strategic
growth sectors

 

Van Elle Holdings plc, the UK's largest ground engineering contractor,
provides an update on trading for the 12 months ended 30 April 2024 ("FY24" or
the "Period").

 

Full year 2024 expectations in line

Group revenue for the year is expected to be £140m, approximately 6% below
the previous year including five months contribution from the acquisition of
Rock & Alluvium Limited, or 12% lower on a like-for-like basis. This is in
line with expectations and reflects the impact of prevailing market
conditions, with the housing and infrastructure sectors being impacted by
lower levels of demand and delays.

 

During the Period, the Group continued its focus on operational performance,
whilst controlling its cost base, and as a result expects to report profit
before tax in line with market expectations(1).

 

The balance sheet remains strong with a healthy cash balance. Net cash as at
30 April 2024 (excluding IFRS 16 property and vehicle lease liabilities)
decreased to £5.5m (30 April 2023: £7.5m) reflecting increased investment in
the year. During the Period, the Group made the final consideration payment of
£0.7m for the acquisition of ScrewFast Foundations Limited, the initial
consideration of £1.8m for the acquisition of Rock & Alluvium, and early
repayment of variable rate hire purchase contracts of £1.1m.

 

The Group's funding facility of £11.0m is unused, providing significant
liquidity headroom. The Board continues to appraise new M&A opportunities
in the Group's core and adjacent markets.

 

The order book as at 31 March 2024 was £36.8m (30 April 2023: £30.8m).

 

Integration of Rock & Alluvium

The Group completed the acquisition of Rock & Alluvium from Galliford Try
on 30 November 2023.  Integration into the Group has progressed in line with
expectations, and the business is trading profitably with volumes
approximately 30% above those pre-acquisition. As expected, the acquisition
has stimulated wider growth opportunities for the Group in London and the
South East.

 

Outlook

Both the housing and infrastructure sectors are widely expected to recover in
the near term, and whilst timing remains uncertain, the Group will benefit
from increased volumes.  Van Elle is also developing a strong position in the
water and energy sectors, which are both expected to contribute materially to
activity levels from FY26 and beyond.

 

The Group has been awarded new frameworks in Q4 FY24 including in Network
Rail's CP7 civils and geotechnical programme, with the Coal Authority for
national ground investigation services and for key customers in the energy
sector.  The Group will commence its first major energy transmission scheme
in FY25 with further tender opportunities expected this year and is designing
modular foundation solutions for several customers ahead of AMP8 in the water
sector.

 

The Board remains conservative on the timing of a full recovery in the housing
sector, but the Group is seeing early signs of progress with order intake and
rig utilisation increasing over the last three months.

 

In Canada, the Group has continued to develop a strong position ahead of
significant rail infrastructure opportunities including its appointment as a
strategic partner within the Toronto region expansion programme.

 

The Group has identified a range of further cost saving measures, consisting
of headcount reductions and efficiency projects, with targeted annualised
savings in excess of £1m.

 

Notice of results

The Company expects to announce its results for the year ended 30 April 2024
in the second half of July 2024.

 

(1) Company compiled analyst consensus for FY2024 underlying profit before tax
is £5.0m.

 

 

For further information, please contact:

 Van Elle Holdings plc                                   Via Walbrook

 Mark Cutler, Chief Executive Officer

 Graeme Campbell, Chief Financial Officer

 Peel Hunt LLP (Nominated Adviser and corporate broker)  Tel: 020 7418 8900

 Ed Allsopp

 Charlotte Sutcliffe

 Ben Harrington

 Walbrook PR Limited                                     Tel: 020 7933 8780

                                                         or vanelle@walbrookpr.com
 Tom Cooper                                              07971 221 972 or 07748 325 236

 Nick Rome

 

 

About Van Elle Holdings plc:

Van Elle Holdings is the UK's largest specialist geotechnical engineering
contractor. Formed in 1984 and listed on AIM in 2016, the Company provides a
wide range of ground engineering techniques and services including ground
investigation, general and specialist piling, rail geotechnical engineering,
modular foundations, and ground improvement and stabilisation services.

 

Van Elle operates through three divisions: General Piling, Specialist Piling
and Rail, and Ground Engineering Services; and is focused on diverse end
markets including residential and housing, infrastructure and regional
construction - across which the Group has completed more than 20,000 projects
over the last 40 years. The Company acquired ScrewFast Foundations Limited in
April 2021 and Rock & Alluvium Limited in November 2023.

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