Ground engineering contractor Van Elle has announced further job cuts and cost-saving initiatives as it copes with lower demand from housing and infrastructure.
It comes as group revenue for FY2024 is forecast to be £140 million, which is approximately 6 per cent below the previous financial period.
“The group has identified a range of further cost-saving measures, consisting of headcount reductions and efficiency projects, with targeted annualised savings in excess of £1m,” bosses said in a trading update.
Van Elle added it expects to report a pre-tax profit for the year ended 30 April 2024 of £5 million.
“This is in line with expectations and reflects the impact of prevailing market conditions, with the housing and infrastructure sectors being impacted by lower levels of demand and delays,” it said.
Adding: “The board remains conservative on the timing of a full recovery in the housing sector, but the group is seeing early signs of progress with order intake and rig utilisation increasing over the last three months.”
It follows a deal with Galliford Try in October last year to acquire piling specialist Rock & Alluvium for up to £3.8 million.
Rock & Alluvium is trading profitably, opening new growth opportunities in London and the South East, including in water and energy.
Van Elle’s order book value on 31 March 2024 was £36.8 million, compared to £30.8 million on 30 April last year.
Due to increased investment in the year, however, its net cash position was £5.5 million, down from £7.5 million for the same period last year.
These included a final £0.7 million payment for the acquisition of ScrewFast Foundations, an initial payment of £1.8 million for Rock & Alluvium, and early repayment of hire purchase contracts of £1.1 million.
An £11 million funding facility remains unused, which provides the business “significant” liquidity headroom, it said.
Van Elle expects to announce results for the year ended 30 April 2024 in the second half of July.
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