TIDMVANL
RNS Number : 6848A
Van Elle Holdings PLC
24 January 2024
Van Elle Holdings plc
('Van Elle', the 'Company' or the 'Group')
Interim Results for the six months ended 31 October 2023
Analyst Briefing and Investor Presentation
Van Elle Holdings plc, the UK's largest ground engineering
contractor, announces its Interim Results for the six months ended
31 October 2023 (the 'Period').
GBPm 6 months 6 months
ended ended
31 Oct 2023 31 Oct 2022
---------------------------------------------------------------------- ------------- -------------
Revenue 68.2 80.8
EBITDA(1) 6.2 6.4
Operating profit 2.7 3.5
Operating profit margin 3.9% 4.3%
Profit before taxation 2.5 3.3
Basic earnings per share (p) 1.6 2.6
ROCE(2) 10.0% 11.2%
Net funds / (debt) 1.9 (2.5)
Net funds (excluding IFRS 16 property and vehicle lease liabilities) 8.9 3.5
Interim dividend per share (p) 0.4 0.4
---------------------------------------------------------------------- ------------- -------------
(1) EBITDA is defined as earnings before interest, tax,
depreciation and amortisation
(2) Return on capital employed is defined as 12-month rolling
operating profit divided by average net assets excluding net
debt
There are no non-underlying items reported in the current or
comparative Period.
Period highlights
-- Resilient performance in challenging market conditions,
delivering an operating margin of 3.9%, consistent with FY2023.
-- As expected, revenue was 16% below the prior year, with the
comparative period benefitting from stronger housing, construction
and infrastructure markets.
-- Good progress in the development of growth opportunities in the energy and water sectors.
-- Establishment and commencement of trading of the Canadian
rail subsidiary for which costs have been absorbed in the Period,
including the impact of some initial delays to expected work
volumes.
-- The Group's growing innovation investment, aligned to its
growth markets, is reflected in a stronger research and development
claim reported in other operating income.
-- Balance sheet remains robust and strong cash generation
delivered an increase in net funds (excl. IFRS 16 property and
vehicle lease liabilities), retaining significant liquidity
headroom.
-- Interim dividend declared of 0.4 pence per share, consistent year on year.
Outlook
-- Good progress is being made on the Group's strategies in the
energy and water sectors, both of which are expected to deliver
significant growth opportunities into the medium term. Several
customer frameworks have been agreed in the Period and initial
schemes are expected to commence in late FY2024.
-- Work volumes in the rail sector will dip in the transition to
Control Period 7 (CP7) but are expected to be offset by the Group's
framework position on the TransPennine Route Upgrade. The Board
expects opportunities arising from CP7 to be significantly stronger
than CP6 as a result of increasingly close customer
partnerships.
-- In highways, the Group's work on the retrofit safety measures
as a framework partner on the Smart Motorway Programme Alliance are
scheduled to commence in H2 FY2024.
-- The new build housing and residential sector is expected to
remain challenging in the short term but there are early signs of
market recovery, and the Board anticipates a return to higher
volumes in FY2025.
-- The commercial and industrial markets show signs of increased
confidence compared to the last 12 months, underpinning expected an
increased utilisation in FY2025 in the General Piling division.
-- The integration of Rock & Alluvium, which became part of
the Group on 30 November 2023, is progressing well and is expected
to be accretive to underlying earnings in FY2025. The Group's
trading agreement with Galliford Try is expected to deliver
GBP10-15m of incremental revenues from FY2025.
-- The Board remains confident in achieving market expectations for the full year. (1)
(1) Company compiled analyst consensus for FY2024 underlying
profit before tax is GBP5.0m.
Mark Cutler, Chief Executive, commented:
"These results represent a resilient performance in the face of
expected challenging market conditions throughout FY2024,
reflecting the benefits of the Group's diversified end-market
exposure. Despite the anticipated lower revenues, operating margin
has been maintained at FY2023 levels, our balance sheet is
stronger, and our future prospects are more compelling. We are very
pleased with the acquisition of Rock & Alluvium shortly after
the Period end. The Group is developing a strong market position in
the energy and water sectors and is well placed to benefit from a
recovery in activity levels in housing, construction, rail and
highways in FY2025."
Analyst Briefing: 9.30am on Wednesday 24 January 2024
An online briefing for Analysts will be held at 9.30am today.
Analysts interested in attending should contact Walbrook PR on
vanelle@walbrookpr.com or 020 7933 8780.
Investor Presentation: 3.30pm on Wednesday 24 January 2024
Mark Cutler, Chief Executive Officer, and Graeme Campbell, Chief
Financial Officer, will hold a presentation to review the results
and outlook at 3.30pm today. The presentation will be hosted
through the digital platform Investor Meet Company.
Investors can sign up to Investor Meet Company for free and add
to meet Van Elle Holdings plc via the following link
https://www.investormeetcompany.com/van-elle-holdings-plc/register-investor
. Investors who have already registered and added to meet the
Company will automatically be invited.
Questions can be submitted pre-event to vanelle@walbrookpr.com
or in real time during the presentation via the "Ask a Question"
function.
For further information, please contact:
Van Elle Holdings plc Via Walbrook
Mark Cutler, Chief Executive Officer
Graeme Campbell, Chief Financial Officer
Peel Hunt LLP (Nominated Adviser and corporate Tel: 020 7418 8900
broker)
Ed Allsopp / Ben Harrington
Walbrook PR Limited Tel: 020 7933 8780
or vanelle@walbrookpr.com
Tom Cooper / Nick Rome 07971 221 972 or
07748 325 236
About Van Elle Holdings plc:
Van Elle Holdings is the UK's largest specialist geotechnical
engineering contractor. Formed in 1984 and listed on AIM in 2016,
the Company provides a wide range of ground engineering techniques
and services including ground investigation, general and specialist
piling, rail geotechnical engineering, modular foundations, and
ground improvement and stabilisation services.
Van Elle operates through three divisions: General Piling,
Specialist Piling and Rail, and Ground Engineering Services; and is
focused on diverse end markets including residential and housing,
infrastructure and regional construction - across which the Group
has completed more than 20,000 projects over the last 40 years.
Van Elle Holdings plc - Interim Report to 31 October 2023
Results overview
The Group's results for the Period are in line with the Board's
expectations, reflecting a resilient operational performance
despite challenging market conditions, continuing inflationary
pressures and delayed project starts.
Half year revenue of GBP68.2m, represents a decrease of 16% on
the prior period (H1 FY2023: GBP80.8m). Operating margin has
remained consistent with the prior year at 3.9% (FY2023: 3.9%).
The Group experienced softer market conditions in the Period,
with continued uncertainty impacting activity levels in all end
markets. Performance in the residential sector was consistent with
Board expectations with new build housing delivering reduced
volumes, which is a trend expected to continue throughout the
second half of the financial year. There remains a strong need for
new housing in the UK and the market is showing some early signs of
recovery in some regions, supported by a reduction in mortgage
rates towards the end of 2023.
The Infrastructure and Construction markets were also relatively
subdued. Infrastructure was impacted by inflationary pressures and
widespread delays to major projects which were expected to commence
in the Period. However, the Group has made strong progress on
substantial growth opportunities in the energy and water sectors,
where investment is forecast to grow significantly over the long
term.
The costs of establishing the Group's new Canadian rail
subsidiary have been absorbed in the Period. Initial projects
commenced in the second quarter, although delays in mobilising
reflected lower levels of activity than originally expected.
Inflationary pressures have continued to adversely affect the
cost base, particularly through wage inflation. Cost saving
measures are being implemented where possible to help manage the
Group's cost base.
The Group delivered an operating profit of GBP2.7m (H1 FY2023:
GBP3.5m).
Net funds as at 31 October 2023 (excluding IFRS 16 property and
vehicle lease liabilities) increased to GBP8.9m, from GBP7.5m. Net
capital expenditure of GBP2.5m primarily represents continued
investment in the rig fleet, with higher margin and utilisation
rigs being targeted for acquisition. The Group paid the final
remaining consideration of GBP0.7m, for the acquisition of
ScrewFast Foundations Limited, and the FY2023 final dividend of
GBP0.9m in the Period.
The Group continued to maintain a strong balance sheet with a
healthy cash balance and significant liquidity headroom against its
GBP11.0m funding facility, which remains unused. Group debt reduced
to GBP0.1m, excluding IFRS 16 lease liabilities.
The order book at 31 December 2023 was GBP42.0m including
GBP11.6m for Rock & Alluvium. On a like-for-like basis, this
reflects a slight reduction from the position at 31 October 2023 of
GBP32.7m primarily due to the quieter winter trading period.
Market overview
The Group operates in the following three market sectors:
-- Residential constituted 43% of Group revenues in the Period
(38% in H1 FY2023). Sector revenue decreased by 5% to GBP29.3m (H1
FY2023: GBP30.9m).
Van Elle's teams deliver integrated ground improvement, piling
and modular, precast concrete foundation systems for national and
regional housebuilders, retirement and multi-storey residential
properties.
Demand for the Group's Smartfoot system was strong in the first
quarter, with high activity levels continuing the momentum achieved
in the prior year. New building regulations, introduced towards the
end of Q1 FY2024, resulted in the acceleration of some residential
projects, which provided a temporary increase to revenues during
the early part of the financial year.
As anticipated, the impact of increasing interest rates and
general market uncertainty caused a decrease of the rate of new
build starts during the second quarter. Lower volumes are expected
to continue throughout the second half of the financial year,
however the Group has a balanced exposure to affordable and
partnership housing as well as private sector housebuilders, which
helps to provide some resilience.
The Board remains confident that Van Elle's unique range of
geotechnical solutions for housebuilders will continue to prove
popular with volume housebuilders when markets recover.
-- Infrastructure constituted 42% of Group revenues in the
Period (39% in H1 FY2023). Sector revenue decreased by 9% to
GBP28.7m (H1 FY2023: GBP31.6m).
Group activities include specialist ground engineering services
to the rail, highways, energy, coastal, flooding and utility
sectors.
Activity levels in the rail sector were strong in the Period as
CP6 entered its final year before the planning phase of CP7
commences, which will result in lower revenue in the second half of
the financial year. Work on the major electrification programmes in
south Wales and the east midlands is now largely complete. However,
the Group is a framework partner on the TransPennine Route Upgrade
(TRU) programme and site work is expected to commence in H2 2024
and is expected to provide a solid base of workload during
FY2025.
In Canada, rail work commenced in the second quarter, but
project start dates have been delayed resulting in lower activity
levels than expected. Project delays continued to impact for the
remainder of 2023 but activity levels have improved in January
2024. The ONxpress Toronto Metro expansion project has been delayed
until late 2025. Accordingly, the Group is reviewing its strategy
and evaluating other revenue opportunities.
Government spending in the highways sector has been lower than
anticipated, with several major projects being delayed. The Group's
appointment to the Smart Motorways Programme Alliance (SMPA)
framework in FY2023 has also delivered lower volumes than expected
following the cancellation of any new all-lane running Smart
Motorway projects although works on the retrofit emergency refuge
areas is expected to commence in H2 FY2024.
The Group has made good progress on substantial growth
opportunities in the energy and water sectors, with several
customer frameworks agreed in the Period and an identified bidding
pipeline of approximately GBP300m over the next five years. This is
further strengthened by the launch of a dedicated civil engineering
team targeted on integrated civils and foundations opportunities in
the rail, energy and water sectors.
-- Regional Construction constituted 14% of Group revenues (22%
in H1 FY2023). Sector revenue decreased by 47% to GBP9.7m (H1
FY2023: GBP18.1m).
The Group delivers a full range of piling services, and the
growth of our ground improvement specialism has assisted in
accessing a wider range of attractive projects in the industrial
sector and continues to perform well since its inception in
FY2020.
Growth in the prior year was primarily driven by a select few
larger commercial projects in central London, delivered
substantially by the General Piling division. With the backdrop of
a more challenging and price sensitive regional construction market
in the Period, activity levels were below the previous period. The
Group's activities in central London have been strengthened by the
acquisition of Rock & Alluvium shortly after the Period
end.
Operating structure
Van Elle's operational Group structure has remained consistent
and is reported in three segments:
-- General Piling : open site; larger projects; key techniques
being large diameter rotary, CFA piling and precast driven
piling.
-- Specialist Piling and Rail : restricted access and low
headroom piling; extensive rail mounted capability; helical piling
and steel modular foundations (ScrewFast); sheet piling, soil nails
and anchors, mini-piling and ground stabilisation projects.
-- Ground Engineering Services : driven and CFA piling for
housebuilders, precast concrete modular foundations (Smartfoot);
ground investigation and geotechnical services (Strata
Geotechnics).
General Piling
Revenue decreased by 13% in the Period to GBP25.4m (H1 FY2023:
GBP29.3m), representing 37% of Group revenues.
The General Piling division operates across each of the Group's
three market segments. Market conditions remained highly
competitive, with price sensitive tendering being a key factor in
work winning.
Revenue growth was achieved in the Residential sector with
several significant contracts delivered, particularly in the first
quarter of the financial year. Infrastructure workload benefited
from the completion of the first phase of a major energy sector
contract in the Period. Regional Construction revenues were lower
than the comparative period, mainly due to a very strong order book
being brought forward into the previous year.
Operating profit was GBP1.8m for the Period (H1 FY2023: GBP2.3m)
reflecting the reduced activity levels.
The Group acquired Rock and Alluvium Limited on 30 November
2023, which increases the division's geographic activity in the
Southeast and expands capacity for additional CFA piling, primarily
reported in the General Piling division activities.
Specialist Piling and Rail
Revenue decreased by 18% in the Period to GBP20.3m (H1 FY2023:
GBP24.8m), representing 30% of Group revenues.
Specialist Piling experienced softer market conditions towards
the end of the previous financial year, which continued into the
first half of FY2024, primarily due to delays to major
infrastructure work on highways and a short-term decrease in demand
for drill and grout activity. Work-winning improved towards the end
of the Period and the division is now expected to operate at near
capacity for the second half of the financial year. The medium-term
outlook for the division's work in the infrastructure sector
remains very positive, with significant growth opportunities in the
high-voltage power sector supporting the development of the UK's
electricity transmission networks.
The Rail division delivered strong revenues in the Period, as
CP6 entered its final year before CP7 commences. A decrease in
activity levels is anticipated until CP7 work starts. However, the
Group is a framework partner on the TransPennine Route Upgrade
(TRU) programme and site work is expected to commence in Q4 FY2024
and provide a solid base of workload for up to three years.
As previously referenced, in Canada the ONxpress Toronto Metro
expansion project has been delayed until H2 FY2025.
Operating profit for the division decreased to GBP0.5m (H1
FY2023: GBP1.1m).
Ground Engineering Services
Revenue decreased by 17% in the Period to GBP22.1m (H1 FY2023:
GBP26.6m), representing 32% of Group revenues. Ground Engineering
consists of the Housing division and Strata Geotechnics.
The Housing division delivers integrated piling and Smartfoot
foundation beam solutions to UK housebuilders. Demand was very
strong in the first quarter, with high activity levels continuing
the momentum achieved in the prior year but as anticipated, the
impact of increasing interest rates and general market uncertainty
caused a drop in the rate of new build starts during the second
quarter. Lower volumes are expected to continue throughout the
second half of the financial year and costs are being managed to
mitigate this impact, although demand for new build housing remains
strong and the market is expected to recover during FY2025.
Strata Geotechnics reported further growth with increased
revenue of GBP4.1m (H1 FY2023: GBP3.5m) with gross margin at the
upper end of the Group's activities. Progress was maintained in
infrastructure work, particularly in the highways sector and on HS2
ground investigation projects. Strata had secured a place on the
GBP800m phase 2 ground investigation framework, therefore the
cancellation of phase 2b of HS2 was particularly disappointing.
Underlying operating profit for the segment decreased to GBP1.8m
(H1 FY2023: GBP2.5m) reflecting the lower activity levels in
Housing.
Strategy
Good progress continues to be made against the final phase of
the Group's strategy, with a wider range of diversified
capabilities in place and market opportunities supported by
stronger relationships with key customers and reliable performance
on operational delivery.
The Group has navigated a challenging period, delivering a
resilient performance, and remains well positioned with a strong
balance sheet for when its end markets recover. Despite the
short-term volatility and reduced activity levels, the Board
remains confident in delivering 6% operating profit and 15-20% ROCE
by FY2027 driven through organic revenue growth supplemented by
strategic bolt-on acquisitions.
ESG
In FY2021, the Group initiated its Sustainability Strategy,
aligned with the UN Sustainable Development Goals that are most
applicable to Van Elle's operations. This strategy encompasses
objectives, targets, and key performance indicators, with business
leaders managing its implementation. We aim to measure our strategy
against key performance indicators annually to monitor our
performance and identify continuous improvement measures. Our
long-term "Net Zero by 2050" commitment is supported in the medium
term by a roadmap to 2030, which provides a clear strategic pathway
to a 30% reduction in our greenhouse gas emissions from a 2020
baseline.
We have made a commitment to developing 'Science Based Targets'
to set achievable emissions reduction targets against a
representative base year to achieve Net Zero by 2050 and are
actively engaging with our supply partners to understand the
greenhouse gas emissions arising from the materials and services
with which they provide to us.
Our primary Scope 1 emissions arise from fuel usage. We are
exploring transitional solutions to mitigate these emissions while
new technologies are being assessed and developed. Recent
improvements include the expansion of our company car scheme to
encompass hybrid and electric vehicles, now increasingly adopted by
our staff. Additionally, we've equipped our head office with
electric vehicle charging stations for both employees and
visitors.
In the previous financial year, the Group reduced its Scope 2
emissions through a new electricity purchase agreement, which is
from 100% renewable sources (certified under the Renewable Energy
Guarantees of Origin scheme).
Dividend
The Board acknowledges that dividends continue to represent an
important constituent of total shareholder returns, and accordingly
has declared an interim dividend of 0.4 pence per share.
The interim dividend will be payable on 15 March 2024 to
shareholders on the share register as at 23 February 2024. The
shares will be marked ex-dividend on 22 February 2024.
Current trading and outlook
Market conditions in the short term, especially in respect of
new build housing, are expected to remain challenging in the
current financial year. Since the Period end, lower volumes in
housing have been broadly offset by a recovery in infrastructure
and construction activity levels.
Although the Group has experienced delays to major
infrastructure works in the Period, more recently, a strong
pipeline of contract awards has been secured providing greater
confidence in the medium-term outlook in the infrastructure sector.
There are significant growth opportunities in the energy and water
sectors alongside expected upturns in investment levels and
increased market share in highways and rail.
The Group acquired Rock and Alluvium Ltd and entered into a
five-year trading agreement with Galliford Try on 30 November 2023.
The integration of Rock & Alluvium into Van Elle is progressing
well, and the Board expects the acquisition to be accretive to
underlying earnings in the first full year of ownership, which was
reflected in upgraded market expectations for FY2025 and
beyond.
The Board continues to expect results in line with market
expectations for the current financial year and is confident the
Group is well positioned over the medium term across all its core
markets.
Mark Cutler
Chief Executive Officer
24 January 2024
Condensed consolidated statement of comprehensive income
6 months 6 months 12 months
to 31 Oct to to 30 Apr
2023 (unaudited) 31 Oct 2023 (audited)
GBP'000 2022 (unaudited) GBP'000
Note GBP'000
------------------------------------ ------- ------------------ ------------------ ----------------
Revenue 2,3 68,210 80,836 148,734
Cost of sales (47,544) (60,211) (108,646)
------------------------------------ ------- ------------------ ------------------ ----------------
Gross profit 20,666 20,625 40,088
Administrative expenses (18,769) (17,309) (35,089)
Credit loss impairment charge (93) - (45)
Other operating income 859 169 904
------------------------------------ ------- ------------------ ------------------ ----------------
Operating profit 2,663 3,485 5,838
Finance expense (177) (200) (487)
Finance income 3 - -
Profit before tax 2,489 3,285 5,371
Income tax expense (814) (465) (693)
------------------------------------ ------- ------------------ ------------------ ----------------
Profit after tax and total
comprehensive income for the
year attributable to shareholders
of the parent 1,675 2,820 4,678
------------------------------------ ------- ------------------ ------------------ ----------------
Earnings per share (pence)
Basic 4 1.6 2.6 4.4
Diluted 4 1.6 2.6 4.4
------------------------------------ ------- ------------------ ------------------ ----------------
All amounts relate to continuing operations. There was no other
comprehensive income in either the current or preceding Period.
Condensed consolidated statement of financial position
As at As at As at
31 Oct 31 Oct 30 Apr
2023 (unaudited) 2022 (unaudited) 2023 (audited)
GBP'000 GBP'000 GBP'000
------------------------------- ------------------- ------------------- -----------------
Non-current assets
Property, plant and equipment 41,821 40,149 41,917
Investment property - 806 -
Intangible assets 3,638 3,787 3,713
------------------------------- ------------------- ------------------- -----------------
45,459 44,742 45,630
------------------------------- ------------------- ------------------- -----------------
Current assets
Inventories 4,929 4,091 4,971
Trade and other receivables 29,909 43,181 35,544
Cash and cash equivalents 9,047 8,443 8,885
43,885 55,715 49,400
------------------------------- ------------------- ------------------- -----------------
Total assets 89,344 100,457 95,030
------------------------------- ------------------- ------------------- -----------------
Current liabilities
Trade and other payables 18,178 27,636 23,245
Loans and borrowings - 3,000 -
Deferred consideration - - 790
Lease liabilities 2,476 2,159 2,339
Provisions 8,238 8,047 8,143
28,892 40,842 34,517
------------------------------- ------------------- ------------------- -----------------
Non-current liabilities
Deferred consideration - 1,193 -
Lease liabilities 4,654 5,798 6,179
Deferred tax 4,801 4,139 4,303
9,455 11,130 10,482
------------------------------- ------------------- ------------------- -----------------
Total liabilities 38,347 51,972 44,999
------------------------------- ------------------- ------------------- -----------------
Net assets 50,997 48,485 50,031
------------------------------- ------------------- ------------------- -----------------
Equity
Share capital 2,133 2,133 2,133
Share premium 8,633 8,633 8,633
Other reserve 5,807 5,807 5,807
Retained earnings 34,424 31,912 33,458
Total equity 50,997 48,485 50,031
------------------------------- ------------------- ------------------- -----------------
Condensed consolidated statement of cash flows
6 months 6 months 12 months
to 31 Oct to to 30 Apr
2023 (unaudited) 31 Oct 2023 (audited)
GBP'000 2022 (unaudited) GBP'000
GBP'000
----------------------------------------- ------------------ ------------------ ----------------
Cash flows from operating activities
Operating profit 2,663 3,485 5,858
Depreciation of property, plant
and equipment 3,498 2,845 5,984
Amortisation of intangible assets 74 58 134
Depreciation of investment property - 5 9
(Profit)/loss on disposal of property,
plant and equipment (108) (96) (310)
Share-based payment expense 134 121 171
----------------------------------------- ------------------ ------------------ ----------------
Operating cash flows before movement
in working capital 6,261 6,418 11,846
Decrease in inventories 42 (318) (1,200)
Decrease in trade and other receivables 5,635 (9,068) (1,434)
Decrease in trade and other payables (5,067) 5,185 344
Increase in provisions 95 310 405
----------------------------------------- ------------------ ------------------ ----------------
Cash generated from operations 6,966 2,527 9,961
Income tax (paid)/received (302) 322 323
----------------------------------------- ------------------ ------------------ ----------------
Net cash generated from operating
activities 6,664 2,849 10,284
----------------------------------------- ------------------ ------------------ ----------------
Cash flows from investing activities
Purchases of property, plant and
equipment (3,914) (3,745) (6,167)
Disposal of property, plant and
equipment 1,369 197 615
Deferred consideration for acquisition
of subsidiary (740) (50) (50)
Net cash absorbed in investing
activities (3,285) (3,598) (5,602)
----------------------------------------- ------------------ ------------------ ----------------
Cash flows from financing activities
New hire purchase financing - 1,544 1,544
New loans and borrowings - 3,000 3,000
Repayment of bank borrowings - - (3,000)
Principal paid on lease liabilities (2,189) (1,072) (2,394)
Interest paid on lease liabilities (76) (179) (388)
Interest paid on loans and borrowings (102) (21) (53)
Interest received 3 - -
Dividends paid (853) (1,067) (1,493)
Net cash absorbed in financing
activities (3,217) 2,205 (2,784)
----------------------------------------- ------------------ ------------------ ----------------
Net increase/(decrease) in cash
and cash equivalents 162 1,456 1,898
Cash and cash equivalents at beginning
of year 8,885 6,987 6,987
Cash and cash equivalents at end
of year 9,047 8,443 8,885
----------------------------------------- ------------------ ------------------ ----------------
Condensed consolidated statement of changes in equity
Share Share Other Retained Total
Capital premium reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- --------- --------- --------- ----------- ---------
Balance at 1 May 2022 2,133 8,633 5,807 30,038 46,611
(audited)
-------------------------- --------- --------- --------- ----------- ---------
Total comprehensive
income - - - 2,820 2,820
Share-based payment
expense - - - 121 121
Dividends paid - - - (1,067) (1,067)
Balance at 31 October
2022 2,133 8,633 5,807 31,912 48,485
(unaudited)
-------------------------- --------- --------- --------- ----------- ---------
Total comprehensive
income - - - 1,858 1,858
Share-based payment
expense - - - 50 50
Dividends paid - - - (426) (426)
Deferred tax credit
on share based payments - - - 64 64
Balance at 30 April
2023 2,133 8,633 5,807 33,458 50,031
(audited)
-------------------------- --------- --------- --------- ----------- ---------
Total comprehensive
income - - - 1,675 1,675
Share-based payment
expense - - - 134 134
Dividends paid - - - (853) (853)
Deferred tax credit
on share based payments - - - 10 10
Balance at 31 October
2023 2,133 8,633 5,807 34,424 50,997
(unaudited)
-------------------------- --------- --------- --------- ----------- ---------
Notes to the condensed consolidated interim financial
statements
For the six months ended 31 October 2023
1. Basis of preparation
The unaudited interim consolidated statement of Van Elle
Holdings plc is for the six months ended 31 October 2023 and does
not comprise statutory accounts within the meaning of section 435
of the Companies Act 2006.
These condensed consolidated financial statements have been
prepared in compliance with the recognition and measurement
requirement of International Accounting Standards in conformity
with the requirements of the Companies Act 2006. They do not
include all disclosures that would otherwise be required in a
complete set of financial statements and should be read in
conjunction with the Group's annual report. The unaudited interim
consolidated statement has been prepared in accordance with the
accounting policies that are expected to be applied in the report
and accounts for the year ending 30 April 2024.
The comparative figures for the year ended 30 April 2023 do not
constitute statutory accounts within the meaning of section 435 of
the Companies Act 2006, but they have been derived from the audited
financial statements for that year, which have been filed with the
Registrar of Companies. The report of the auditors was unqualified
and did not contain statements under section 498 (2) or (3) of the
Companies Act 2006 nor a reference to any matters which the auditor
drew attention by way of emphasis of matter without qualifying
their report.
Going Concern
As part of the going concern assessment for the year ended 30
April 2023 detailed forecasts were prepared. These forecasts
demonstrated a healthy cash flow and headroom across the period to
31 July 2024. Reverse stress testing was also carried out and the
scenarios in which cash resources were exhausted and further debt
facilities were required were considered remote.
Strong activity levels seen throughout FY2023 continued into Q1
of FY2024 and whilst market conditions have been more challenging
from Q2 onwards, the Board remains confident in achieving market
expectations for the current financial year. The Group's order book
has also grown in the period since 30 April 2023.
A strong cash balance of GBP9.0m remains at the end of the
period. The Group's net funds position (excluding IFRS 16 property
and vehicle lease liabilities) of GBP8.9m has increased by GBP1.4m
during the period. The Group's GBP11m asset backed lending facility
remains undrawn at the end of the period having not been drawn
during the 6 months to 31 October 2023. Total hire purchase finance
at the end of the period was only GBP0.1m.
As part of the interim going concern assessment, forecasts for
the 12 months ending January 2025 have been prepared which
demonstrate that the Group is able to operate within its existing
facilities and meet obligations as they fall due.
On this basis the Board consider the Group to have adequate
resources to continue its operations for the foreseeable future.
Accordingly, the Board continue to adopt the going concern basis in
preparing the interim financial statements.
Accounting Policies
The accounting policies adopted in the preparation of the
unaudited Group interim consolidated statement to 31 October 2023
are consistent with the policies applied by the Group in its
consolidated financial statements as at, and for the year ended 30
April 2023.
Functional currency
The unaudited interim consolidated statements are presented in
Sterling, which is also the Group's functional currency. Amounts
are rounded to the nearest thousand, unless otherwise stated.
2. Segment information
The Group evaluates segmental performance based on profit or
loss from operations calculated in accordance with IFRS but
excluding non-underlying items. Inter-segment sales are priced
along the same lines as sales to external customers, with an
appropriate discount being applied to encourage use of Group
resources at a rate acceptable to local tax authorities. Head
office central services costs including insurances are allocated to
the segments based on levels of turnover.
Operating segments - 6 months to 31 October 2023
Specialist Ground
General Piling Engineering Head
Piling & Rail Services Office Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- --------- ----------- ------------- --------- ---------
Revenue 25,372 20,333 22,058 447 68,210
----------------------------- --------- ----------- ------------- --------- ---------
Other operating
income - - - 859 859
----------------------------- --------- ----------- ------------- --------- ---------
Operating profit 1,816 486 1,761 (1,400) 2,663
Finance expense - - - - -
Profit before tax 1,816 486 1,761 (1,400) 2,663
----------------------------- --------- ----------- ------------- --------- ---------
Assets
Property, plant and
equipment (including
right of use assets) 8,937 13,777 7,548 11,559 41,821
Intangible assets 7 3,422 209 - 3,638
Inventories 1,898 759 2,233 39 4,929
----------------------------- --------- ----------- ------------- --------- ---------
Reportable segment
assets 10,842 17,958 9,990 11,598 50,388
Trade and other receivables - - - 29,909 29,909
Cash and cash equivalents - - - 9,047 9,047
Total assets 10,842 17,958 9,990 50,554 89,344
----------------------------- --------- ----------- ------------- --------- ---------
Liabilities
Trade and other payables - - - 18,178 18,178
Provisions - - - 8,238 8,238
Lease liabilities - - - 7,130 7,130
Deferred tax - - - 4,801 4,801
Total liabilities - - - 38,347 38,347
----------------------------- --------- ----------- ------------- --------- ---------
Other information
Capital expenditure 855 590 184 2,285 3,914
Depreciation 816 1,331 816 535 3,498
----------------------------- --------- ----------- ------------- --------- ---------
The Group had one customer with revenues greater that 10% in the
current period (2022: none). Total revenues with the customer were
GBP7.4m and these are reported within the General Piling operating
segment.
Geographical segments - 6 months to 31 October 2023
Revenue and operating profit from external customers, and the
carrying amount of non-current assets by geographical segment are
shown below:
Other
UK countries Total
GBP'000 GBP'000 GBP'000
------------------------- --------- ----------- ---------
Revenue 68,180 30 68,210
------------------------- --------- ----------- ---------
Operating profit/(loss) 3,304 (641) 2,663
------------------------- --------- ----------- ---------
Non-current assets 44,287 1,172 45,459
------------------------- --------- ----------- ---------
Operating segments - 6 months to 31 October 2022
Specialist Ground
General Piling Engineering Head
Piling & Rail Services Office Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- --------- ----------- ------------- --------- ---------
Revenue 29,308 24,806 26,552 170 80,836
----------------------------- --------- ----------- ------------- --------- ---------
Other operating
income - - - 169 169
----------------------------- --------- ----------- ------------- --------- ---------
Operating profit 2,325 1,102 2,541 (2,483) 3,485
Finance expense - - - (200) (200)
Profit before tax 2,325 1,102 2,541 (2,683) 3,285
----------------------------- --------- ----------- ------------- --------- ---------
Assets
Property, plant and
equipment (including
right of use assets) 9,166 13,988 7,967 9,028 40,149
Intangible assets 15 3,543 229 - 3,787
Inventories 1,319 781 1,913 78 4,091
----------------------------- --------- ----------- ------------- --------- ---------
Reportable segment
assets 10,500 18,312 10,109 9,106 48,027
Investment property - - - 806 806
Trade and other receivables - - - 43,181 43,181
Cash and cash equivalents - - - 8,443 8,443
Total assets 10,500 18,312 10,109 61,536 100,457
----------------------------- --------- ----------- ------------- --------- ---------
Liabilities
Trade and other payables - - - 27,636 27,636
Provisions - - - 8,047 8,047
Loans & borrowings - - - 3,000 3,000
Deferred consideration - - - 1,193 1,193
Lease liabilities - - - 7,957 7,957
Deferred tax - - - 4,139 4,139
Total liabilities - - - 51,972 51,972
----------------------------- --------- ----------- ------------- --------- ---------
Other information
Capital expenditure 459 2,430 197 659 3,745
Depreciation 675 1,110 689 434 2,908
----------------------------- --------- ----------- ------------- --------- ---------
There are no individual customers accounting for more than 10%
of Group revenue in either the current or preceding period.
Geographical segments - 6 months to 31 October 2022
Revenue and operating profit from external customers, and the
carrying amount of non-current assets by geographical segment are
shown below:
Other
UK countries Total
GBP'000 GBP'000 GBP'000
-------------------- --------- ----------- ---------
Revenue 80,836 - 80,836
-------------------- --------- ----------- ---------
Operating profit 3,485 - 3,485
-------------------- --------- ----------- ---------
Non-current assets 44,742 - 44,472
-------------------- --------- ----------- ---------
Operating segments - 12 months to 30 April 2023
Specialist Ground
General Piling Engineering Head
Piling & Rail Services Office Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- --------- ----------- ------------- --------- ---------
Revenue 54,838 46,593 47,067 236 148,734
----------------------------- --------- ----------- ------------- --------- ---------
Other operating
income - - - 904 904
----------------------------- --------- ----------- ------------- --------- ---------
Operating profit 3,403 2,236 3,642 (3,423) 5,858
Finance expense - - - (487) (487)
Profit before tax 3,403 2,236 3,642 (3,910) 5,371
----------------------------- --------- ----------- ------------- --------- ---------
Assets
Property, plant and
equipment (including
right of use assets) 9,090 14,411 8,005 10,411 41,917
Intangible assets 11 3,483 219 - 3,713
Inventories 1,858 727 1,902 484 4,971
----------------------------- --------- ----------- ------------- --------- ---------
Reportable segment
assets 10,959 18,621 10,126 10,895 50,601
Trade and other receivables - - - 35,544 35,544
Cash and cash equivalents - - - 8,885 8,885
Total assets 10,959 18,621 10,126 55,324 95,030
----------------------------- --------- ----------- ------------- --------- ---------
Liabilities
Trade and other payables - - - 23,245 23,245
Provisions - - - 8,143 8,143
Deferred consideration - - - 790 790
Lease liabilities - - - 8,518 8,518
Deferred tax - - - 4,303 4,303
Total liabilities - - - 44,999 44,999
----------------------------- --------- ----------- ------------- --------- ---------
Other information
Capital expenditure 1,171 4,188 1,351 1,977 8,687
Depreciation 1,422 2,262 1,421 879 5,984
----------------------------- --------- ----------- ------------- --------- ---------
The Group had one customer with revenues greater that 10% in the
current year (2022: none). Total revenues with the customer were
GBP18.4m and these are reported within the General Piling operating
segment.
Geographical segments - 12 months to 30 April 2023
Revenue and operating profit from external customers, and the
carrying amount of non-current assets by geographical segment are
shown below:
Other
UK countries Total
GBP'000 GBP'000 GBP'000
-------------------- --------- ----------- ---------
Revenue 148,734 - 148,734
-------------------- --------- ----------- ---------
Operating profit 5,858 - 5,858
-------------------- --------- ----------- ---------
Non-current assets 45,630 - 54,630
-------------------- --------- ----------- ---------
3. Revenue from contracts with customers
Disaggregation of revenue - 6 months to 31 October 2023
Specialist Ground
General Piling Engineering Head
Piling & Rail Services Office Total
End market GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- ----------- ------------- --------- ---------
Residential 9,304 2,289 17,744 - 29,337
Infrastructure 10,076 15,486 3,126 - 28,688
Regional construction 5,907 2,558 1,185 - 9,650
Other 85 - 3 447 535
----------------------- --------- ----------- ------------- --------- ---------
Total 25,372 20,333 22,058 447 68,210
----------------------- --------- ----------- ------------- --------- ---------
Disaggregation of revenue - 6 months to 31 October 2022
Specialist Ground
General Piling Engineering Head
Piling & Rail Services Office Total
End market GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- ----------- ------------- --------- ---------
Residential 6,880 2,334 21,643 - 30,857
Infrastructure 9,166 20,337 2,095 - 31,598
Regional construction 13,222 2,100 2,772 - 18,094
Other 40 35 42 170 287
----------------------- --------- ----------- ------------- --------- ---------
Total 29,308 24,806 26,552 170 80,836
----------------------- --------- ----------- ------------- --------- ---------
Disaggregation of revenue - 12 months to 30 April 2023
Specialist Ground
General Piling Engineering Head
Piling & Rail Services Office Total
End market GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- ----------- ------------- --------- ---------
Residential 13,924 4,840 38,096 - 56,860
Infrastructure 20,761 37,180 4,651 - 62,592
Regional construction 20,147 4,507 4,289 - 28,943
Other 6 66 31 236 339
----------------------- --------- ----------- ------------- --------- ---------
Total 54,838 46,593 47,067 236 148,734
----------------------- --------- ----------- ------------- --------- ---------
Contract assets
6 months 6 months 12 months
to to to
31 Oct 31 Oct 30 Apr
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------------------ --------------- -------------- ------------
As at 1 May 4,913 2,163 2,163
Transfers from contract assets
to trade receivables (4,913) (2,163) (1,943)
Excess of revenue recognised over
invoiced 3,296 3,347 4,913
Impairment of contract assets - - (220)
------------------------------------ --------------- -------------- ------------
As at 31 October / 30 April 3,296 3,347 4,913
------------------------------------ --------------- -------------- ------------
Contract liabilities
6 months 6 months 12 months
to to to 30 Apr
31 Oct 31 Oct 2023 (audited)
2023 (unaudited) 2022 (unaudited) GBP'000
GBP'000 GBP'000
---------------------------------- ------------------ ------------------ ----------------
As at 1 May 447 388 388
Interest on contract liabilities - - -
Contract liabilities recognised
as revenue in the period (247) (188) (188)
Deposits received in advance of
performance 534 247 1,787
As at 31 October / 30 April 734 447 1,987
---------------------------------- ------------------ ------------------ ----------------
4. Earnings per share
The calculation of basic and diluted earnings per share is based
on the following data:
6 months 6 months 12 months
to to to 30 Apr
31 Oct 31 Oct 2023 (audited)
2023 (unaudited) 2022 (unaudited)
---------------------------------- ------------------ ------------------ ----------------
Basic weighted average number of
shares 106,667 106,667 106,667
Dilutive weighted average shares
from share options 210 - 473
---------------------------------- ------------------ ------------------ ----------------
Diluted weighted average number
of shares 106,877 106,667 107,140
---------------------------------- ------------------ ------------------ ----------------
GBP'000 GBP'000 GBP'000
---------------------------------- ------------------ ------------------ ----------------
Profit for the period 1,675 2,820 4,678
---------------------------------- ------------------ ------------------ ----------------
Pence Pence Pence
---------------------------------- ------------------ ------------------ ----------------
Earnings per share
Basic 1.6 2.6 4.4
Diluted 1.6 2.6 4.4
---------------------------------- ------------------ ------------------ ----------------
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders and on 106,666,650
ordinary shares being the weighted average number of ordinary
shares in issue during the period.
The dilutive shares represent share options exercisable under
Group's LTIP scheme that vested on 30 September 2023 and which have
not been exercised at 31 October 2023.
5. Dividends paid
6 months 6 months 12 months
to to to
31 Oct 31 Oct 30 Apr
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
---------------------------------------- --------------- -------------- ------------
Amounts recognised as distributions
to equity holders during the Period:
Final dividend for the year ended
30 April 2022 of 1.0p per share - 1,067 1,067
Interim dividend for the year ended
30 April 2023 of 0.4p per share - - 426
Final dividend for the year ended 853 - -
30 April 2023 of 0.8p per share
Total 853 1,067 1,493
---------------------------------------- --------------- -------------- ------------
6. Analysis of cash and cash equivalents and reconciliation to net (debt) / funds
As at As at As at
31 Oct 31 Oct 30 Apr
2023 (unaudited) 2022 (unaudited) 2023
GBP'000 GBP'000 (audited)
GBP'000
---------------------------------- ------------------- ------------------- -----------
Cash at bank 9,039 8,403 8,847
Cash in hand 8 40 38
---------------------------------- ------------------- ------------------- -----------
Cash and cash equivalents 9,047 8,443 8,885
Loans and borrowings - (3,000) -
Lease liabilities (7,130) (7,957) (8,518)
---------------------------------- ------------------- ------------------- -----------
Net funds / (debt) 1,917 (2,514) 367
---------------------------------- ------------------- ------------------- -----------
Net funds excl. IFRS 16 property
and vehicle lease liabilities 8,926 3,476 7,526
---------------------------------- ------------------- ------------------- -----------
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END
IR EAEFDASALEAA
(END) Dow Jones Newswires
January 24, 2024 02:00 ET (07:00 GMT)
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