New CEO Mark Cutler took over at the business last August and implemented a transformation programme to simplify its structure, reduce overheads and improve contract performance.
Van Elle issued interim results today for the six months to October 31 2018 showing pre-tax profits down 54% to £2.4m as turnover fell 18% to £42.9m.
The company also provided an update on current trading and confirmed “poor profitability” in Q3 caused by lower than expected margins in the general piling division which have prompted a change in divisional leadership
Cutler said: “The third quarter has been more challenging than we anticipated, with a disappointing performance in General Piling and several project delays.
“As a result and despite good momentum being carried in from the first half, we don’t believe we will be able to deliver the significant step up in performance during the second half that we anticipated at the time of our trading statement in December 2018.
“These challenges have been frustrating, but it is pleasing to see outlook for the final quarter remaining robust and with a strong pipeline of target projects providing good forward visibility.”
Van Elle said it is expecting a strong Q4 but “believes it is prudent to reduce its revenue expectation for the current year.”
Cutler added: “First half results were in line with our revised expectations and reflected the improved performance in the second quarter after a quiet start to the year.
“This is a transitional year for the business and since my arrival in August 2018, I have been undertaking a full review of the business.
“As part of this process 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.”
Van Elle’s share price fell by 30% in early trading this morning.