Van Elle profit slides in first-half

Aaron Morby 1 month ago

Ground engineering specialist Van Elle has suffered a hit in profitability after higher margin railway work slowed in the first half.

Mark Cutler is counting on a better second half as more rail work comes through
Mark Cutler is counting on a better second half as more rail work comes through

Pre-tax profit slumped from £2.4m previously to just £900,000 in the six months to the end of October.

Revenue grew by 13% to £48.5m reflecting growth in the housing and highways markets, although the piling specialist reported subdued conditions in its higher margin commercial and rail markets.

Cash performance was affected by two long-running final accounts, lifting net debt to £10.4m from £5.6m in the previous first half.

General and Specialist Piling revenues were slightly down, while there was significant growth within Ground Engineering Services, up £7m to £17m.

This was driven primarily by housing growth as a result of closer relationships with national house builders which are asking for faster build times and integrated piling and foundation solutions.

But Van Elle also saw increased competition in the regional construction market and subdued activity levels in the rail sector as a result of delays to Network Rail’s CP6 programme.

Mark Cutler, Chief Executive, said: “While mindful of ongoing volatility across construction markets and recognising a slower Q3 than previous years due to subdued rail activity, the board expects some market improvement and further progress in the balance of the second half.

“This is also supported by the benefits of ongoing improvements under the group’s transformation programme.

“Consequently, the board expects to deliver results for the full year within the range of market expectations.”

He added: “We have a clear strategy focused on three core markets – housing, infrastructure and regional construction – where we offer a broad range of end-to-end technical capabilities through our extensive and well-invested rig fleet.

“Good progress continues to be made in building long term and strategic relationships with our key customers in all sectors.”

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