Van Elle Holdings PLC Trading Update (1442A)
March 22 2017 - 2:00AM
UK Regulatory
TIDMVANL
RNS Number : 1442A
Van Elle Holdings PLC
22 March 2017
22 March 2017
Van Elle Holdings plc
("Van Elle" or the "Group")
Trading update for the year ending 30 April 2017
Van Elle, the geotechnical contractor offering a wide range of
ground engineering techniques and services to customers in a
variety of UK construction end markets, is issuing the following
trading update.
Trading update
Overall trading in the third quarter, which included significant
levels of activity in December and January, was in line with the
Board's expectations. As a result, for the nine months to 31
January 2017, the Group delivered total revenues of GBP70.8
million, representing growth of 16.4 per cent. on the prior year.
Conditions in Van Elle's end markets remained satisfactory
throughout the period and the Group continued to focus on
generating improving returns through strong operational
execution.
Trading since the start of the fourth quarter across the General
Piling, Ground Engineering Services and Ground Engineering Products
divisions has continued to reflect stable underlying market
conditions and the Group expects the outturn in these divisions for
the current financial year to be in line with its previous
expectations. As indicated at the time of the Company's interim
results on 19 January 2017, there were a number of contracts within
the Specialist Piling division expected to be confirmed and
commenced in the second half, particularly in the division's
on-track rail business.
The Company now anticipates the start date for several of these
contracts will be delayed beyond the end of the current financial
year and, in a small number of cases, the expected call-off
schedule and distribution of work packages may be revised. Whilst
Van Elle still expects to deliver a number of these contracts on
revised time schedules, the Group will not receive the previously
expected contribution from them in the current financial year. As a
result, the Board now expects to deliver full year revenue of
approximately GBP93 million, some five per cent. below its previous
expectations, with the Group's underlying operating margin slightly
reduced as a result of the adverse mix impact. Cash generation in
the Group remains strong and the Board intends to recommend a final
dividend in line with its expectations at the time of the IPO.
Looking ahead, Van Elle continues to be optimistic about the
long term opportunity within its rail business, given the ongoing
need for maintenance of the UK track network as well as significant
capital programmes such as track-bed stabilisation and the
electrification of major routes. However, the delay and deferral of
contracts in the fourth quarter is disappointing and creates some
uncertainty around this market in the near term. In light of this,
the Board believes that it would be prudent to assume only a modest
increase in the level of rail activity, and growth in the
Specialist Piling division as a whole, in the coming year until
visibility over a number of programmes becomes clearer. The outlook
for the Group's remaining three divisions remains consistent with
the Board's previous views and, having made good strategic progress
during the year, the Group is still well positioned to deliver
double-digit revenue growth in the year ending 30 April 2018 albeit
from a lower base in 2017. Van Elle has continued to invest in new
and innovative techniques and equipment which are expected to
enable it to keep growing ahead of its underlying markets into the
medium term. The Group retains a robust financial position which
will enable it to continue to explore investment and acquisition
opportunities as well as provide shareholders with anticipated
dividend returns.
Update on possible Contingent Liability
Within the interim results, attention was drawn to a possible
liability related to material bonus payments allegedly due to a
former employee pursuant to historic employment arrangements. The
Board is continuing to actively investigate this matter and has
been advised that any claim would be contestable on a number of
grounds and accordingly it will actively resist the payment of any
monies in relation to this matter. The Company will provide a
further update as appropriate.
Enquiries:
Van Elle Holdings plc 017 7358 0580
Jon Fenton, Chief Executive
Officer
Paul Pearson, Chief Financial
Officer
Instinctif Partners (Financial
Public Relations) 020 7457 2020
Mark Garraway
James Gray
Rosie Driscoll
Peel Hunt LLP (Nominated Adviser
and corporate broker) 020 7418 8900
Charles Batten
Mike Bell
Justin Jones
Certain information contained within this announcement is deemed
by the Company to constitute inside information as stipulated under
the Market Abuse Regulation. Upon the publication of this
announcement via Regulatory Information Service, this inside
information is now considered to be in the public domain.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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