Ground engineering contractor Van Elle has provided a trading update following its acquisition of a piling specialist earlier in the year.
The group expects to report revenues for the six months to 31 October 2023 of approximately £68 million, a decrease of 16 per cent on the prior year (HY2023: £80.8 million).
It added, however, it expects to see operating profit margins consistent with the previous financial period (FY2023: 3.9 per cent).
Van Elle reported a “strong” balance sheet with a net funds position (excluding IFRS16 lease liabilities) of £8.9 million (30 April 2023: £7.5 million).
It added it has flexibility from an undrawn funding facility of up to £11 million.
Its order book increased to £32.7 million (30 April 2023: £30.8 million), excluding frameworks and preferred bidder positions.
Underlying profit before tax for FY2024 is expected to be £5 million.
Half-year results for the six months ended 31 October 2023 will be announced on 24 January.
Rock & Alluvium acquisition
In October, Van Elle announced an agreement with Galliford Try to acquire piling specialist Rock & Alluvium Ltd for up to £3.8 million, and to enter into a five-year trading agreement.
“The acquisition completed on 30 November,” said Van Elle. Adding: “There are early signs of a recovery in commercial and residential opportunities in London and the south east which Rock and Alluvium, as part of the Van Elle Group, is well placed to benefit from.”
Outlook
Van Elle said it expects subdued activity in the housebuilding sector to continue into the second half of the financial year.
It added, however, it is seeing substantial growth opportunities in the energy sector, and that costs associated with Van Elle’s new Canadian rail subsidiary had been absorbed and initial projects were started in the second quarter.
Despite challenging conditions, inflationary pressures and delayed project starts, the group reported a “resilient” operational performance.
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