Van Elle raises nearly £7m for Covid-19 safety net

Aaron Morby 4 years ago
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Piling specialist Van Elle has raised £6.7m from shareholders to buttress it from the impact of the coronavirus shutdown.

Fresh management measures to improve cash flow by £5.3m
Fresh management measures to improve cash flow by £5.3m

Around 200 staff, representing around 40% of the total workforce, have been furloughed, while part-time working has been introduced for others.

Van Elle said it had also temporarily closed the group’s precast concrete factory.

Since mid-March the rapid spread of Covid-19 has seen most of its housing and regional construction sites close.

Most road and rail sites have remained active, albeit with increased logistical challenges in order to comply with best working practices and widespread materials disruption.

In the regional construction sector, many sites are also closed although Van Elle said that it expected some to re-open on a carefully managed basis.

Van Elle warned that these market conditions would result in a significant reduction in revenues in the period from March to May.

In its mid-case scenario, Van Elle said it expected group revenue levels to reduce to 40% of plan in May before recovering to around 80% in September, and then be maintained at that level for the remainder of the year.

Mark Cutler, chief executive officer, said: “This fundraising provides the group additional flexibility to manage the impact of Covid-19 as well as potential capacity to support growth investment as markets recover.

“The board believes that the long-term opportunity for the group remains significant.

“We have a clear strategy in place and believe the group is well-placed to capture significant opportunities as construction markets recover.”

The successful share placing with three exiting investors on Friday, represents around a third of its total shares.

The existing shareholders taking up the offer were: Ruffer Investment Management, Otus Capital Management and Premier Miton Investors.

Cutler added: “On behalf of the board, we would like to place on record our gratitude to our shareholders for their continued support in the company and to all our employees during this challenging time.”

 

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