Piling specialist Van Elle returns to profit

Aaron Morby 5 months ago
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Ground engineering specialist Van Elle returned to profit in the first half of the year and is forecasting better than expected performance for the rest of the year as rail industry work picks up.

Mark Cutler, chief executive, said that Van Elle has continued to deliver a strong recovery from the pandemic, despite supply chain and labour pressures.

Cutler said: “Our core markets have seen strong demand with all divisions operating at increased utilisation levels throughout the period.

“This demand for our services has continued into the third quarter, and we are particularly encouraged by the improved opportunities in our Rail division.”

 He added: “We remain optimistic that the improved levels of demand in our core markets will remain strong for the remainder of the financial year and into the medium term.

“As a result, we expect the trading performance for the full year to be ahead of our previous expectations.”

But Cutler warned that managing the headwinds caused by supply chain challenges continued to prove difficult, particularly with regard to the pricing and availability of cement, concrete, and steel.

He said: “The impact is greatest in the General Piling division, where higher volumes of raw materials are typically required on contracts.

“Price increases have been reflected in tendering activity to recover the significant input cost inflation we are exposed to, although with some customer pricing mechanisms, there is a lag in recovery.”

During the first half to October 2021, revenue rebounded by 57% to £60m, from the Covid-impacted previous first half and 24% ahead of the pre-pandemic interim results.

 Van Elle generated a pre-tax profit of £1.9m after suffering a £700,000 loss the year before.

The rail business saw improved contract activity towards the end of the period, which has continued into the third quarter.

Cutler said the integration of ScrewFast Foundations, acquired last April, was progressing well and performance is in line with expectations at the time of acquisition. 

He added that despite the recently announced pause to Smart Motorway programmes, ScrewFast was expected to continue with its design remits on all the new schemes, and continue construction activities on the M6 junction 21a-26.

Net cash slid to £6.3m from £8.5m due to planned capital expenditure and a reduction in group debt.

He added that Van Elle remained on track to reinstate dividend payments, after the full year.

 

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