Van Elle ends year ahead of recently-hiked expectations

Ground engineering contractor Van Elle said in an update on Tuesday that the elevated demand in its core markets, as detailed in its interim results in January, continued through the second half.

The AIM-traded firm said that as a result, it now expected to report results for the financial year just ended ahead of its recently-upgraded forecasts, with revenue of about £125m.

That would represent an increase of 48% year-on-year for the 12 months ended 30 April, or 41% after adjusting for the acquisition of ScrewFast Foundations, with operating profits “slightly ahead” of the top end of the range of market expectations.

“This continued demand is reflective across the group's divisions,” the board said in its statement.

“As anticipated, there has been an increase in work delivered within the rail division, and volumes across housing, specialist piling and general piling have remained consistent.

“Supply chain challenges are showing some signs of moderating, with the impact of material price inflation being managed through contract pricing mechanisms.”

Van Elle reported continued momentum on its bidding programme aligned to its target growth markets, including the signing of the 10-year Smart Motorways Programme Alliance (SMPA) framework, and a new contract award in the energy sector within general piling, representing its largest single award since the start of the Covid-19 pandemic, at around £8m, for which work was expected to start this month.

Cash generation in the second half was described as “strong”, with cash at year-end of £7.0m, up from £6.3m at the end of the first half, and net funds pre-IFRS 16 lease liabilities rising to £5.9m from £3.5m.

The group said its order book as at 30 April totalled £39m, excluding the SMPA framework and recent general piling contract award.

“The board is pleased with progress made in the second half of the 2022 financial year,” Van Elle said.

“The trading momentum has continued into 2023, while future prospects in its growth markets remain encouraging.

“The board is therefore increasingly confident of achieving its mid-term financial targets of 7% to 8% operating profit and 15% to 20% return on capital employed.”

Van Elle said it would release its results for the year ended 30 April on 3 August.

At 1232 BST, shares in Van Elle Holdings were up 7.81% at 51.75p.

Reporting by Josh White at Sharecast.com.