TIDMVANL
RNS Number : 8187I
Van Elle Holdings PLC
17 August 2021
Van Elle Holdings plc
('Van Elle', the 'Company' or the 'Group')
Results for the year ended 30 April 2021
Analyst Briefing & Investor Presentation
Van Elle Holdings plc, the UK's largest ground engineering
contractor, announces its results for the year ended 30 April 2021
('FY2021').
GBPm Year ended Year ended
30 April 30 April 2020
2021
-------------------------------------- ----------- ---------------
Revenue 84.4 84.4
Underlying* operating loss (0.6) (0.3)
Reported operating loss (0.8) (1.6)
Underlying* loss before tax (1.2) (0.9)
Reported loss before taxation (1.4) (2.2)
Underlying* basic earnings per share (1.3)p (1.5)p
Basic earnings per share (1.3)p (1.5)p
Net funds/(debt) (1.7) 0.9
Net funds excl. IFRS 16 property and
vehicle lease liabilities 3.7 4.8
Operating cash conversion (%) 18.5% 175%
-------------------------------------- ----------- ---------------
* Underlying results are stated before non-underlying items of
GBP0.2m (2020: GBP1.3m) comprising share-based payment expense and
other non-underlying items (disclosed in note 4).
Highlights:
-- Resilient trading performance with revenues flat on FY2020,
notwithstanding the impact of the global pandemic and Brexit
uncertainty, emerging in a strong position as market conditions
started to recover.
-- Revenue run-rate at the end of the financial year returned to pre-pandemic levels.
-- Core markets saw a strong recovery in the final quarter of
the financial year with all divisions, except Rail, operating at
near capacity by the year end.
-- Further progress on the strategic agenda across operational
delivery, employee engagement, governance and risk management, and
delivering clear commercial and financial benefits.
-- Reduction of outstanding hire purchase debt has further
strengthened the balance sheet and arrangement of a new GBP11m debt
facility (not currently utilised) provides significant headroom for
growth.
-- Selective rig investments ensured that capability and
capacity is strengthened in high-demand sectors and utilisation
optimised across the fleet.
-- Acquisition of ScrewFast Foundations Limited for up to
GBP3.7m has expanded the Specialist Piling and modular foundations
segment. The integration programme is progressing as planned.
-- Cash as at 30 April 2021: GBP8.5m.
Current trading and outlook
-- Positive start to FY2022 with strong first quarter trading.
-- Assuming supply chain and labour challenges do not materially
worsen, the Board anticipates delivering a profitable result in
line with market expectations.
-- Increased tendering opportunities and greater pipeline
visibility for the Rail division, which supports an encouraging
mid-term outlook.
-- Order book at 9 August increased to GBP34.7m (1 June 2021: GBP26.4m).
-- The Board believes that good progress is being made in order
to achieve the medium-term financial targets set in 2020.
Mark Cutler, Chief Executive, commented:
"In an operationally very challenging year for the construction
sector generally, the Group demonstrated its resilience as market
conditions started to recover from the global pandemic and Brexit
uncertainty.
"Our core end markets recovered strongly in the final quarter of
the financial year with all divisions, except Rail, operating at
near capacity by the year-end. This recovery in activity levels has
continued into the first quarter of FY2022, with the Group trading
profitably during this period, and the prospects for our Rail
division are notably improving. The Board's confidence is
underpinned by a robust order book and a growing pipeline of
tendering activity.
"The acquisition of ScrewFast has further strengthened the
Group's position in the Specialist Piling and modular foundations
segment. The integration of ScrewFast into the Group is progressing
well and is providing greater opportunities for cross-selling our
products and services.
"We are optimistic that the current levels of demand will be
sustained in FY2022 and, assuming the supply chain and labour
challenges do not materially worsen, we anticipate delivering a
profitable result in line with market expectations."
Analyst Briefing: 9.30am on Tuesday 17 August 2021
A briefing for Analysts will be held at 9.30am this morning -
Tuesday 17 August 2021. Analysts interested in attending should
contact Walbrook PR on vanelle@walbrookpr.com or 020 7933 8780.
Investor Presentation: 3.30pm on Thursday 19 August 2021
Mark Cutler, Chief Executive Officer, and Graeme Campbell, Chief
Financial Officer, will hold a presentation to review the results
and prospects following their release at 3.30pm on Thursday 19
August 2021, 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 Tel: 020 7418 8900
corporate broker)
Mike Bell / Ed Allsopp
Walbrook PR Limited Tel: 020 7933 8780
or vanelle@walbrookpr.com
Tom Cooper / Nick Rome / Nicholas Johnson 07971 221 972 or 07748
325 236 or 07884 664
686
About Van Elle Holdings plc:
Van Elle Holdings is the UK's largest specialist geotechnical
engineering contractor. The Company provides a 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 ground engineering; and is focused on three
end markets: residential and housing, infrastructure and regional
construction - across which the Group has completed more than
20,000 projects over the last 35 years.
General piling provides a range of larger piling and ground
engineering solutions for open-site construction projects.
Specialist piling provides a range of geotechnical solutions in
operationally constrained environments including on-track rail
applications. Ground engineering services offers a range of ground
investigation and geotechnical services and modular foundation
solutions such as Smartfoot(R). Van Elle has a market-leading
reputation and the UK's largest rig fleet of 115 rigs.
Having floated on AIM in 2016 it now has a strong national
presence, diversified offering and market-leading brand name.
CHAIRMAN'S STATEMENT
Overview
The Group's financial performance was heavily impacted by the
COVID-19 pandemic, particularly in the first quarter when trading
activity was significantly below pre COVID levels as a result of a
shut down of activity at a number of customer sites. Since quarter
one, there has been a steady recovery in our end markets. Working
practices were quickly adapted to comply with government advice and
industry guidance, allowing the Group to deliver contract works
safely and productively.
The subsequent national lockdowns announced in November 2020 and
January 2021 had a less significant impact on the Group and its
markets as construction activity was able to continue. The
uncertainty however impacted customer short-term decision
making.
The Group took swift and decisive actions to protect the
business, its employees, and its customers throughout the period of
the pandemic, and remains well placed to take full advantage of
growth opportunities as market recovery continues.
Revenue for the year to 30 April 2021 was GBP84.4m, consistent
with the preceding year, despite a challenging first quarter. The
resulting underlying operating loss was GBP0.6m (2020 loss:
GBP0.3m).
Despite the uncertainties caused by COVID-19, the Group
continued to make good progress in the delivery of its strategic
plan, focused on improving operational performance and establishing
strong market positions for future growth. Significant progress
continues to be made on improving engagement with strategic
customers, fostering an enhanced commercial and business
development focus, and strengthening performance review and
commercial processes across the business.
Capital structure and allocation
The Group's capital structure is kept under constant review,
taking account of the need for, and the availability and cost of,
various sources of finance. The Group's objective is to deliver
long-term value to its shareholders whilst maintaining a balance
sheet structure that safeguards the Group's financial position
through normal economic cycles. In October 2020, the Group secured
up to GBP11m of asset-backed lending facilities on a revolving
basis over 4 years, with security agreed against the Group's
receivables and certain tangible assets. The facilities remain
undrawn to date. This, alongside the capital raise in April 2020,
provides significant headroom for growth.
On 1 April 2021, the Group acquired ScrewFast Foundations
Limited, an innovative helical pile design, fabrication and
installation business. The acquisition strengthens the Group's
position in growth markets of infrastructure and housing as well as
providing access to new markets in the power and telecoms sectors.
The helical pile solution complements Van Elle's existing breadth
of capabilities, capturing more of the value chain through
providing modular forms of construction. Full details of the
structure of the consideration paid is included in the Financial
Review.
The Group continues to invest in its rig fleet, maintaining and
upgrading existing rigs and acquiring new modern rigs that are
capable of delivering a broad array of services efficiently and
which are at the forefront of piling technology. Capital
expenditure on rig fleet expansion will continue to be considered
on a selective basis where a compelling investment case exists.
Dividend
The period of disruption caused by COVID-19 and the resulting
need to manage cash resources has resulted in no dividend being
paid to shareholders during the year. The Board has not proposed a
final dividend in respect of the financial year.
The Board recognises the importance of dividends to shareholders
and the creation of shareholder value and expects to reinstate an
appropriate dividend during the course of the FY2022 financial
year, as market recovery is expected to continue.
People
During the year, the appointment of a Commercial Director and
Rail Director has brought significant industry experience to the
leadership team. The acquisition of ScrewFast has also brought with
it a strong management team. These appointments ensure we have the
optimal mix of experience and capability to deliver the Group's
strategic objectives. We have worked hard to bring together a team
that has the right combination of experience to enable us to
deliver on our vision and strategy.
Van Elle remains a market-leading business with an outstanding
group of employees. My thanks go to all employees for their
resilience and commitment during a period which has had such a
significant impact on our industry and wider society.
Board and governance
I joined the Board on 1 July 2020 as Non-Executive Director and
Chair designate and assumed the role of Chair following the release
of the previous year's results in August 2020, at which point the
previous Non-Executive Director and Chair, Adrian Barden, retired
from his position. I also assumed the role of Chair of the
Nomination Committee in August 2020.
Robin Williams, Senior Independent Non-Executive Director also
stepped down from the Board in August 2020 at which point, Charles
St John, Non-Executive Director took over as Chair of the Audit
& Risk Committee.
On behalf of the Board, I would like to thank Adrian and Robin
for their service and support.
As a Board, we are committed to promoting the highest standards
of corporate governance and ensuring effective communication with
shareholders. We are committed to applying the Quoted Companies
Alliance Corporate Governance Code, complemented with other
suitable governance measures appropriate for a company of our
size.
Outlook
Many of the Group's end markets have shown a sustained level of
post COVID recovery during the year. We are currently experiencing
some current supply chain challenges, particularly with regard to
cement, concrete and steel pricing and availability. There has also
been an impact on employee availability, where our people have been
required to self-isolate by the NHS test and trace app.
Despite these challenges, the Board remains optimistic that
significant opportunities exist across our broad end markets of
residential, infrastructure and regional construction, much of
which remain well-funded and/or are underpinned by long-term
structural growth dynamics.
Frank Nelson
Non-Executive Chair
16 August 2021
CHIEF EXECUTIVE'S STATEMENT
OPERATING REVIEW
Overview
In a very challenging year for the construction sector
generally, the Group demonstrated its resilience as market
conditions started to recover from the global pandemic and Brexit
uncertainty. Full year revenue was consistent with the prior year
(in which the fourth quarter was impacted by the start of the
pandemic) at GBP84.4m and the Group reported a modest underlying
operating loss of GBP0.6m (FY2020 underlying operating loss:
GBP0.3m).
Activity during the first quarter was significantly impacted by
COVID-19, with revenues for the first three months being
approximately GBP10m below pre-pandemic levels. Activity levels
steadily recovered during the second quarter, with revenues in
September and October 2020 returning to pre-pandemic levels,
resulting in the Group returning to profitable trading in these
months.
However, some market volatility returned in the third quarter,
with further lockdowns and Brexit uncertainty impacting investment
decisions and contract start dates. Normal seasonal factors also
impacted our activities due to poor weather conditions during the
winter months.
There was a strong recovery across the construction market in
the final quarter, with most divisions operating at near capacity
by the end of the financial year. This momentum has continued into
FY2022, whilst noting that activity in the Rail division has
remained subdued ahead of anticipated recovery in the second half
of FY2022.
We remain optimistic about future growth opportunities in the
Rail sector, as procurement activity in Network Rail's CP6
investment programme and future rail electrification programmes has
progressed positively.
Whilst the year was heavily impacted by the COVID-19 pandemic,
the financial result reflects the immediate actions which were
taken to mitigate many of the challenges faced by the Group during
this period.
We took appropriate measures to strengthen our balance sheet,
including further reductions to outstanding hire purchase debt and
maintained a stable cash position following the placing in April
2020. The Group also announced a refinancing of existing debt
facilities in October 2020 and subsequently can access a debt
facility of up to GBP11m, which remains undrawn.
The Group has also continued to make progress against its
strategy which was announced at the end of FY2019. The senior
leadership team has been strengthened further with the appointment
of Andy Riggott as Group Commercial Director which has improved our
commercial expertise, governance and risk management. We also
recruited David Buckley to lead the Rail division, in anticipation
of growth opportunities in the sector.
On 1 April 2021, we announced the acquisition of ScrewFast
Foundations Limited for initial consideration of GBP1.7m, funded
from existing cash resources, with deferred consideration of up to
GBP2.0m payable over the next 2 years, an element of which is
linked to performance. The acquisition will improve our market
position and further diversify the Group's Specialist Piling
services. In addition to the commercial opportunities that are
created by the acquisition, we were pleased that the entire
management team led by Dan Dye, Managing Director, joined the Van
Elle Group. The integration of ScrewFast into the Group is
progressing well.
Health and safety of our employees and contractors is a top
priority for management, both in normal working environments, and
also in respect of the ongoing COVID-19 pandemic. Unfortunately, a
tragic accident occurred in January 2021, when one of our rigs
suffered an unexpected failure when de-rigging, resulting in the
fatality to a sub-contracted haulier. As part of our governance
procedures, a comprehensive review of our health and safety systems
and processes, including an independent external review, was
performed in the year.
Efficiencies and cost reductions continue to be explored and in
April 2021 a freehold property held by the Group in Norfolk was
sold for GBP0.7m which was consistent with its book value. This
followed the full co-location of all employees at our main site in
Kirkby in Ashfield in FY2020.
Our focus on staff engagement and retention has continued
throughout the year, following the appointment of a new human
resources team in 2020. Delivery of our people strategy is ongoing
and is starting to be reflected in retention rates and improved
engagement survey results. We are also nearing the completion of
the replacement of our HR system.
Our supplier payment performance has improved significantly over
the period, and we are pleased to now sit within the upper quartile
of industry league tables for payment of suppliers within agreed
terms.
COVID-19 government assistance
As at 30 April 2021, the Group has no amounts owing to HMRC for
liabilities which had been deferred under 'time to pay'
arrangements.
The Group made claims of GBP1.7m under the government's Job
Retention Scheme (JRS) during the year. With the recovery of
activity levels in our core markets towards the end of the
financial year, we are pleased to report that there were no
employees furloughed at the year-end and no claims under the JRS
have been made since the start of FY2022.
ESG
In late FY2021 the Group launched its ESG strategy. This work is
starting to yield benefits in terms of employee engagement,
delivery of social value projects around the UK and reduced carbon
design and delivery innovations, where we are engaging with
industry experts with the support of the Federation of Piling
Specialists.
Strategic approach
We have made continued progress against the strategy, which was
announced at the end of FY2019, and is summarised below:
Phase 1: Stabilising and improving performance
Simplifying the Group structure, improving leadership
capability, strengthening commercial capability, cost reduction and
efficiency improvements, safety and asset utilisation performance,
and employee engagement activities .
Phase 2: Developing foundations for growth
Developing clear strategic plans for our core sectors of
housing, infrastructure and regional construction, improving
customer relationships and tendering activity, maximising our
integrated solutions offering, broadening our range of products and
services, and strengthening our balance sheet.
Phase 3: Establishing market leadership
Sustainable, profitable growth as the Group benefits from
strategic actions taken in phases 1 and 2 and capitalises on
opportunities presented by construction market recovery, with
medium term objectives set in FY2020 being: revenue growth of 5-10%
per annum, underlying operating margins of 7-8% and a return on
capital employed of 15-20%.
During FY2021, the Group launched its updated Vision, Mission
and Values and despite the challenges faced from the COVID-19
pandemic, we have continued to make progress against our strategic
targets.
Key highlights include:
- The appointment of a Group Commercial Director which has
strengthened commercial activities and improved governance and risk
management.
- Reviewed investment in the rig fleet to ensure that capability
is strengthened in high-demand sectors and under-utilised rigs are
disposed of.
- Cost reduction through further rationalisation of the Group's
property footprint. Following the full co-location of personnel at
our main site in Kirkby in Ashfield in the prior year, our freehold
property in Norfolk was sold during the fourth quarter.
- Our annual employee engagement survey reported increased
scores across several indicators and is used to drive actions
across the Group as we continue to focus on development and
engagement of our employees.
- We have continued to reduce hire purchase debt, with all
capital expenditure being funded from cash reserves. Hire purchased
debt at the end of the year was GBP4.0m, down from GBP7.4m at the
end of the last financial year. In addition, the refinancing of the
Group's debt facilities was completed in October 2020, with an
asset-based lending facility of up to GBP11m established, which
remains undrawn.
- The acquisition of ScrewFast Foundations Limited in April 2021
broadens our market position in the highways, power and rail
sectors and further diversifies the Group's Specialist Piling and
modular foundation services. The acquisition provides the Group
with a helical pile solution which complements Van Elle's existing
breadth of capabilities, capturing more of the value chain.
Markets
COVID-19 had a significant impact across all market sectors in
the financial year. Further market uncertainty caused by Brexit
resulted in some additional volatility across our end markets,
particularly General Piling which is more heavily exposed to the
commercial building sector. Despite these challenges, the Group's
markets continue to offer considerable long-term opportunity to
support the delivery of our strategic objectives.
The Group operates in the following three market segments:
-- Residential constitutes approximately 45% of Group revenues,
including private and social housebuilding and larger residential
developments.
The residential market was heavily impacted by the COVID-19
pandemic, with housebuilders closing all sites during the first
national lockdown. The market subsequently recovered steadily, with
activity levels returning to normal throughout the second half of
the financial year. Customer demand in the final quarter was very
strong, with the Housing division operating at near capacity
levels.
The sector continues to offer growth opportunities, both in
private housing and larger scale residential and retirement
sectors. New housebuilding activity levels have proved resilient
throughout the second half of the financial year and demand
continues to be very strong. We are confident that our modular
foundation system, Smartfoot, will continue to be popular with both
traditional housebuilders and emerging modular housebuilders, due
to the benefits of reduced time, certainty of supply and cost and
much reduced on-site resource levels.
-- Infrastructure includes highways, railways, coastal and
flooding and power and energy segments, for all of which the Group
has considerable experience and a strong track record.
In highways, the Group successfully delivered schemes under both
local authority frameworks, Highways England's regional delivery
programme and its Smart Motorway's programme during the year. The
Group helped to deliver five separate Smart Motorway projects and
through the acquisition of ScrewFast has extended its footprint and
further consolidated its market leading position. Looking forward,
Highways England's Smart Motorways Alliance, a 10-year
collaborative partnership to deliver the future Smart Motorways
work bank and for which we are bidding for a partnership role, is
expected to support further progress in this sector .
The commencement of works on High Speed 2 offers considerable
medium-term opportunities for the Group with several projects
secured in the period and a targeted pipeline of current prospects
valued at approximately GBP120m to the Group, albeit several are
subject to delay at this early stage of the programme as
construction delivery schedules are finalised.
The Group's activities in the Rail sector over the period have
been mixed. In our Specialist Piling division, we commenced our
170(th) rail station project in the period, successfully delivering
several high-profile station schemes for strategic customers on
both Network Rail and regional transport authority funded schemes.
On-track works, delivered through our Rail division, have remained
subdued but we remain optimistic of a return to normal levels of
revenue in H2 FY2022 and into FY2023 as we have greater clarity of
CP6 work banks including new electrification schemes under-pinned
by the Government's recently announced strategy to prioritise
electrification projects and remove diesel-only trains by 2040. We
have also continued to diversify our services which were previously
heavily dependent on electrification programmes. During the period
the Group has partly mitigated the impact of low Rail fleet
utilisation by redeploying resources within the Group to ensure the
retention of all key resources.
The Group is also developing positive market positions in the
power sector where it regularly works on substation and power
infrastructure projects across National Grid and regional
distribution networks, again further strengthened by the ScrewFast
acquisition.
-- Regional Construction includes the general private and public
sector building and developer-led markets across the UK.
The regional construction market has remained volatile and
highly competitive as a result of COVID-19 and Brexit impacts on
investment decisions and build programmes. Despite this we have
continued to secure and deliver several good quality projects
whilst also continuing to focus on contract execution and
commercial improvement in our General Piling division which has
supported further margin improvement compared to last year. Of
particular note is the buoyancy in the industrial warehousing
sector which continues to provide significant opportunities for the
Group's expanded range of integrated services, including ground
improvement and rigid inclusion techniques developed in FY2020 as
well as its precast concrete piling operations which have operated
at capacity since Q3 FY2021. Looking forward we anticipate the
regional construction sector will remain competitive, but with
improving activity levels as the market continues its recovery post
COVID-19 and further capacity is taken by HS2 works.
Operating structure
Our operational Group structure has remained consistent and is
reported in three segments. The acquisition of ScrewFast
Foundations Limited is reported within the Specialist Piling and
Rail segment, from April 2021.
-- General Piling : open site; larger projects; key techniques
being large diameter rotary and CFA piling as well as larger
precast driven piling.
-- Specialist Piling and Rail : restricted access; rail mounted
capability; helical piling and steel modular foundations (trading
as ScrewFast Foundations); smaller rigs and engineering techniques
, including soil nails, anchors, mini-piling and ground
stabilisation projects.
-- Ground Engineering Services : modular foundation solutions
(e.g. Smartfoot); ground improvement and geotechnical services
(trading as Strata Geotechnics).
General Piling
Revenue contracted by 6.8% in the year to GBP27.3m (2020:
GBP29.3m), representing 32% of Group revenues. The division
suffered from the uncertainties in the markets for the reasons
described above as well as the significant impacts of COVID-19.
As we experienced in 2020, challenging market conditions also
resulted in lower utilisation of our large diameter rotary and CFA
piling rigs which are the higher margin techniques in this
division. A highly competitive commercial environment resulted in a
weakened blended margin performance, albeit this was offset by the
strengthened commercial capability and improved operational
processes in the division.
Underlying operating profit for the division was GBP0.3m (2020
loss: GBP0.9m).
Specialist Piling and Rail
In the Specialist Piling division, revenue was 15.4% higher at
GBP29.3m (2020: GBP25.4m), representing 35% of Group revenues. The
division benefited from a strong performance in the infrastructure
sector with a presence on five Smart Motorway projects and several
rail station enhancements in the year. Particular highlights
include the completion of our works on the M27 Smart Motorway for
the Bam Morgan Sindall JV which involved four of our divisions in
an integrated delivery approach, completion of the M6 Smart
Motorways scheme for Kier at Stafford, and complex major works
undertaken for Costain at Gatwick station.
A proportion of the increased revenue was delivered by drilling
and grouting (ground stabilisation) activity from a more selective
customer base with structured pricing strategy and improved
margins.
The acquisition of ScrewFast will further complement both the
Specialist Piling and Rail divisions with aligned capabilities
delivering a broader range of techniques.
The Rail division endured a year of subdued revenues as a result
of delayed workstreams on CP6 and the conclusion of major
electrification programmes, but has retained its full skill set and
made good progress diversifying its range of services and customer
base. Highlights include a new South East reactive framework award
and the delivery of the first rail interface schemes on the
northern section of HS2, both with Balfour Beatty Rail. The
division has also been involved in several station schemes in
conjunction with the Specialist Piling division and has invested in
expanding its ground investigation capabilities in conjunction with
Strata Geotechnics, delivering several important projects during
the year, reflecting the Group's strategy to target early
involvement in key projects.
Underlying operating profit for the division increased to
GBP1.0m (2020: GBP0.3m).
Ground Engineering Services
Revenues of GBP27.6m represented a 6.8% decrease on the prior
year (2020: GBP29.6m), representing 33% of Group revenues.
Our housing division delivers integrated piling and Smartfoot
foundation beam solutions to UK housebuilders. The impact of
COVID-19 at the start of the financial year resulted the cessation
of all housebuilding activity for several weeks. Despite the
shortfall of activity during the first quarter, the market
gradually recovered and, along with increased activity from our
investment in Vibro rig capability in the previous year, the
division remained profitable.
The housing sector is expected to move increasingly to modern
methods of construction as the time and resource savings of modular
foundations become better appreciated, and our expanded range of
integrated services from early ground investigation, ground
stabilisation and improvement followed by piling and foundations
systems provides a strong model to support housebuilder
customers.
Strata, our Geotechnical division, reported revenues of GBP4.7m
(2020: GBP5.1m). As in the prior year, the blended margins were
impacted by reduced pile testing volumes because of lower revenues
in the General Piling division. Similar to the wider Group, the
division has made good progress in the highways sector, including
the first contracts delivered under the Highways England ground
investigation framework and several projects in the rail sector and
across HS2.
Underlying operating profit for the division remained consistent
at GBP0.2m (2020: GBP0.2m).
Rig fleet
The market uncertainty caused by the COVID-19 pandemic resulted
in immediate action being taken to minimise capital expenditure
during the first half of the financial year. All capital spend
during this period was restricted to sustaining operational
activity only. As activity levels recovered during the second half
of the financial year, certain divisions experienced an increase in
workload with improving demand and a positive pipeline of future
activity, resulting in some divisions operating at near capacity
towards the end of the final quarter of the financial year. Where
there is high confidence in a division's forward orders, and
forecast ROCE exceeds our medium-term strategic target of 15-20%,
we have contracted to acquire new rigs either for growth
opportunities or to replace ageing rigs which we dispose of. Total
capital spend of GBP2.4m for new rigs was committed in the second
half, with GBP1.4m paid from cash reserves before the year end.
After low capital expenditure levels in the prior year and during
the initial impact of COVID-19, we remain committed to owning and
maintaining a market-leading modern rig fleet.
The total fleet size at the year end was 115, down from 118 last
year, reflecting the capital spend noted above, 7 additional rigs
added to the fleet from the acquisition of ScrewFast, offset by the
disposal of several older or under-utilised rigs.
Summary and outlook
Further progress has been made in delivering the Group's
strategy which is delivering positive impacts across many areas of
the business including operational delivery, employee engagement,
governance and risk management, and both commercial and financial
performance.
The acquisition of ScrewFast on 1 April 2021, being the Group's
first acquisition since IPO, has further strengthened the Group's
position in the Specialist Piling and modular foundations segment,
particularly across infrastructure growth markets. The integration
of ScrewFast into the wider Group is progressing well as our teams
work more closely together, providing greater opportunity for
cross-selling our products and services.
The balance sheet remains strong with debt reduced further in
the year, a stable cash position and an undrawn debt facility
available. Capital expenditure and the initial consideration for
the acquisition of ScrewFast has been funded from cash
resources.
We look forward to further opportunities in the Smart Motorways
sector and see continued growth in the Highways England wider RIS2
delivery programme. We are also encouraged by an increased level of
tendering activity in the Rail division during 2021 including the
anticipated investment in further electrification of the UK rail
network.
The Group is experiencing some challenges from widely publicised
supply chain issues, particularly with regard to cement, concrete,
and steel pricing and availability. Raw material price increases
are being adjusted in contract tenders, but contract margins could
be impacted if the availability and price volatility continues.
There has also been some impact on short term employee
availability, where our people have been required to self-isolate
by the NHS test and trace app.
Our core markets have seen a strong recovery in the final
quarter of the financial year with all divisions, except Rail,
operating at near capacity by the year end. This recovery in
activity levels has continued into the first quarter of FY2022 with
the Group trading profitably during this period. The Group also has
a healthy order book and a growing pipeline of tendering
activity.
We are optimistic that the current levels of demand will be
sustained in FY2022 and, assuming the supply chain and labour
challenges do not materially worsen, the Board anticipates trading
for the full year to be in line with market expectations.
A further trading update will be issued for the Annual General
Meeting, scheduled for 27 September 2021.
Mark Cutler
Chief Executive Officer
16 August 2021
CHIEF FINANCIAL OFFICER'S STATEMENT
FINANCIAL REVIEW
Revenue
Revenue in the year to 30 April 2021 was consistent with revenue
reported for the preceding year. Continuing the experience of the
final 6 weeks of the previous financial year, the first quarter of
FY2021 was significantly impacted by the downturn in the wider
construction market caused by COVID-19 restrictions. The decrease
in H1 revenues and the increase in H2 revenues in comparison to the
previous year reflects this impact.
2021 2020 Change 2021 2020
GBP'000 GBP'000 % % %
--------- --------- --------- ------- ------ ------
H1 38,323 48,524 (21.0) 45.4 57.5
H2 46,045 35,849 28.4 54.6 42.5
--------- --------- --------- ------- ------ ------
Revenue 84,368 84,373 - 100.0 100.0
--------- --------- --------- ------- ------ ------
Throughout H1 there was a gradual recovery in contract activity
with revenues recovered to pre-COVID levels by the end of H1.
Further national lockdowns announced in November 2020 and January
2021 had a less significant impact on the Group and its markets as
construction activity was able to continue with adapted operating
procedures in accordance with government and industry guidance.
Infrastructure and housebuilding markets continued to recover
during H2 as a result and the Group's activity levels, subject to
normal seasonal patterns, continued to recover with revenues in the
fourth quarter returning to pre-COVID levels.
The Group tracks enquiry levels by market sector, which helps to
identify trends and target our activities into growth areas. The
mix of revenue by end markets is shown below:
2021 2020 Change 2021 2020
GBP'000 GBP'000 % % %
----------------------- --------- --------- ------- ------ ------
Residential 37,296 41,301 (9.7) 44.2 49.0
Infrastructure 28,464 23,974 18.7 33.7 28.4
Regional construction 18,481 18,728 (1.3) 21.9 22.2
Other 127 370 (65.7) 0.2 0.4
----------------------- --------- --------- ------- ------ ------
Revenue 84,368 84,373 - 100.0 100.0
----------------------- --------- --------- ------- ------ ------
The residential sector was impacted the most by COVID-19
restrictions with many sites closed in the later part of the
preceding year and into Q1. In particular, extended site closures
in Scotland, where the Group has a significant presence, impacted
revenues. Despite this, the residential sector continues to lead
the Group's revenues. A steady recovery in this market following
the first lockdown meant operational teams operated at close to
capacity throughout Q2 and through much of H2.
The infrastructure sector showed a steady recovery following the
first lockdown in Q1. Whilst Rail activity remained subdued due to
delays in Network Rail's CP6 programme the Group successfully
delivered several significant highways projects during the year
resulting in the increased revenues in this sector. The Group's
Rail resources were effectively reallocated during the year to
support this growth.
The Group continued to see high levels of competition and
pricing pressure in the regional construction sector resulting in
slightly reduced revenues. Several good quality projects in this
sector were delivered during the year and the Group improved its
execution compared to last year.
The mix of revenue by our divisions is shown below:
2021 2020 Change 2021 2020
GBP'000 GBP'000 % % %
-------------------- --------- --------- ------- ------ ------
General Piling 27,340 29,314 (6.7) 32.4 34.7
Specialist Piling
and Rail 29,345 25,359 15.7 34.8 30.1
Ground Engineering
Services 27,596 29,565 (6.7) 32.7 35.0
Head Office 87 135 (35.6) 0.1 0.2
Revenue 84,368 84,373 - 100.0 100.0
-------------------- --------- --------- ------- ------ ------
Specialist Piling showed the strongest recovery since the first
COVID-19 lockdown with operational teams working at close to full
capacity consistently since the end of Q1. The division benefited
from strong, post COVID recovery in the highways and residential
sectors. On 1 April 2021, the Group acquired ScrewFast Foundations
Limited which contributed revenues of GBP1.0m in the final month of
the financial year. ScrewFast forms part of the Group's Specialist
Piling division.
General Piling was impacted by increased competition in the
regional construction sector whilst Ground Engineering Services was
significantly impacted by COVID restrictions in the residential
sector in Q1.
Head office revenues relate to the provision of training
services delivered through the dedicated training facility located
at Kirkby-in-Ashfield.
Gross profit
The gross margin of the Group decreased to 26.1% (2020: 26.8%)
mainly due to an adverse sales mix, with higher margin activities
in rail subdued in the year. A small number of contracts suffered
operational challenges during the year also impacting overall gross
margin rates.
Gross margin was not significantly impacted by COVID-19 as the
Group responded quickly, reducing costs in line with the downturn
in activity. The Group utilised the government's job retention
scheme during the year.
Operating profit
The impact of COVID-19, particularly in Q1 of the financial year
and the reduction in gross margins impacted overhead recovery
resulting in an underlying operating loss for the year of GBP0.6m
(2020 underlying operating loss: GBP0.3m). The reported operating
loss reduced by GBP0.8m to GBP0.8m in the year as one-off asset
impairments and exceptional redundancy costs recognised in the
previous financial year were not repeated. Reported operating
margin increased to -0.9% (2020: -1.9%) and our underlying
operating margin decreased to -0.7% (2020: -0.3%).
2021 2020 Change
GBP'000 GBP'000 %
----------------------------- --------- --------- --------
Operating loss (801) (1,609) 50.2
Operating margin (0.9)% (1.9)% 1.0
----------------------------- --------- --------- --------
Underlying operating loss (553) (257) (115.2)
Underlying operating margin (0.7)% (0.3)% (0.4)
----------------------------- --------- --------- --------
Alternative performance measures
In reporting financial information, the Group presents
alternative performance measures (APMs), which are not defined or
specified under the requirements of IFRS. The Group believes that
these APMs provide depth and understanding to the users of the
financial statements to allow for further assessment of the
underlying performance of the Group and comparability from one year
to the next.
The Board believes that the underlying performance measures for
operating profit, profit before tax and EPS, stated before the
deduction of non-underlying items give a clearer indication of the
actual performance of the business.
During the year, total non-underlying items of GBP0.2m were
incurred, principally in respect of the fees associated with the
acquisition of ScrewFast Foundations Limited on 1 April 2021 and
share-based payment costs.
Net finance costs
Net finance costs were GBP598,000 (2020: GBP630,000). The
decrease in finance costs reflects the reducing financial
liabilities as hire purchase contracts reach their term. HP
agreements are typically at fixed rates of interest and over a
five-year term.
Taxation
The Group had a taxable loss in the financial year ending 30
April 2021. The tax charge of GBP13,000 arises as a result of an
increase in deferred tax liabilities relating to fixed asset timing
differences arising from accelerated capital allowances of
GBP896,000, offset by an adjustment in respect of the amount of
prior year tax losses that were utilised through carrying back
claims against previous year tax charges of GBP554,000 and the
creation of a deferred tax asset in respect of trading losses to
the extent that they are expected to be utilised in the next 12
months of GBP329,000.
Dividends
The period of disruption caused by COVID-19 and the resulting
need to manage cash resources has resulted in no dividend being
paid to shareholders during the year. No final dividend is also
proposed in respect of the current financial year.
The Board recognises the importance of dividends to shareholders
and the creation of shareholder value and expects to reinstate an
appropriate and meaningful dividend in the next financial year as
market recovery is expected to continue.
Earnings per share
The underlying basic earnings per share was -1.1p (2020: -1.5p),
based on an underlying loss of GBP1,164,000 (2020: underlying loss
GBP1,227,000). Reported basic earnings per share was 1.3p (2020:
3.0p).
Balance sheet
2021 2020
GBP'000 GBP'000
-------------------------------------------- --------- ---------
Fixed assets (including intangible assets) 42,835 40,912
Net working capital 6,930 4,439
Net funds/(debt) (1,711) 852
Deferred consideration (1,521) -
Taxation and provisions (2,548) (959)
-------------------------------------------- --------- ---------
Net assets 43,985 45,244
-------------------------------------------- --------- ---------
Note: net working capital and taxation and provisions are stated
net of claim liabilities and associated insurance assets
The Group's net assets reduced by GBP1.2m to GBP44.0m (2020:
GBP45.2m) in the year as a result of the reported loss.
The Group reduced its investment in fixed assets during the year
to GBP2.1m (2020: GBP3.7m) given the need to manage cash resources
in a period of recovery. Rig purchases were restricted to the
Specialist Piling and Ground Engineering Services divisions where
post COVID-19 recovery has been strongest and there are further
opportunities for future revenue growth.
On 1 April 2021 the Group acquired 100% of ScrewFast Foundations
Limited, a specialist helical pile design, fabrication and
installation business for an initial consideration of GBP1,760,000
plus GBP780,000 payable on 31 August 2023 and up to a further
GBP65,000 payable on 31 August 2022 and up to GBP1,110,000 payable
on 31 August 2023 subject to future performance. The fair value of
the net assets acquired was GBP897,000, including GBP980,000 of
cash. The total consideration payable, net of cash acquired, and
discounting of the deferred consideration is estimated at
GBP2,297,000. Goodwill of GBP2,380,000 has been recognised on the
acquisition. Since 1 April 2021 ScrewFast has contributed revenues
of GBP1.0m and profit of GBP0.1m to the Group.
During the year the Group sold the property at Dereham after
vacating the property in the previous financial year due to
consolidation of the Group's operations into a single site at
Kirkby-in Ashfield.
Working capital increased to GBP6.9m (2020: GBP3.8m), reverting
to normalised levels following the reduction in working capital at
the end of the previous financial year due to low levels of
activity during April 2020 due to the first COVID-19 lockdown.
ROCE improved in the period to -1.8% at 30 April 2021 (2020:
-3.6%), reflecting the impact of the lower operating loss.
Net funds
2021 2020
GBP'000 GBP'000
------------------------------------------ --------- ---------
Bank loans (812) -
Lease liabilities (9,417) (11,336)
------------------------------------------ --------- ---------
Total borrowings (10,229) (11,336)
Cash and cash equivalents 8,518 12,188
------------------------------------------ --------- ---------
Net (debt)/funds (1,711) 852
------------------------------------------ --------- ---------
Net funds excluding IFRS 16 property and
vehicle lease liabilities 3,704 4,811
------------------------------------------ --------- ---------
Net funds decreased by GBP2.6m to a net debt position of GBP1.7m
as at 30 April 2021.
Cash has reduced during the year primarily due to the need to
reinvest in working capital following the working capital reduction
immediately prior to the previous year end due to significantly
reduced activity amid the first COVID-19 lockdown.
The total value of debt has reduced during the year despite
GBP1.2m of debt (GBP0.8m of loans and GBP0.4m of HP finance) being
acquired on the acquisition of ScrewFast as the Group continues to
pay down existing HP debt finance.
Cash has reduced during the year primarily due to the need to
reinvest in working capital following the working capital reduction
immediately prior to the previous year end due to significantly
reduced activity amid the first COVID-19 lockdown.
The net debt position as at 30 April 2021 is stated after
GBP5.4m of IFRS 16 property and lease liabilities. Excluding these
liabilities, the Group reports a net funds position of GBP3.7m
(2020: GBP4.8m). The increase in IFRS16 property and vehicle lease
liabilities in the current year reflects the renewal of the Group's
van fleet, the roll out of which commenced in Q4 of FY2021 and is
on a long-term hire basis over a maximum period of 4 years.
In October 2020 the Group secured up to GBP11m of asset backed
lending facilities on a revolving basis over 4 years secured
against the Group's receivables and certain tangible assets. There
are no financial covenants associated with the facilities and they
remain undrawn to date. The undrawn overdraft facility with Lloyds
Banking Group of GBP2.5m came to an end in October 2020 when the
asset-backed lending facilities were established.
Cash flow
2021 2020
GBP'000 GBP'000
---------------------------------------------- --------- ---------
Operating cash flows before working capital 4,059 4,627
Working capital movements (3,286) 3,486
---------------------------------------------- --------- ---------
Cash generated from operations 773 8,113
Income tax received/(paid) 1,408 (679)
---------------------------------------------- --------- ---------
Net cash generated from operating activities 2,181 7,434
Investing activities (1,316) (2,324)
Financing activities (4,535) (919)
---------------------------------------------- --------- ---------
Net decrease/increase in cash (3,670) 4,191
---------------------------------------------- --------- ---------
The Group received corporation tax refunds during the year
amounting to GBP1.4m as a result of the recovery of payments on
account made in the year ended 30 April 2020 and the utilisation of
trading losses from the year ended 30 April 2020 carried back to
previous periods. During the year all deferred VAT liabilities and
time to pay arrangements made during the period of disruption
caused by COVID-19 were settled with HMRC.
The Group continues to prioritise cash generation and the active
management of working capital.
Graeme Campbell
Chief Financial Officer
16 August 2021
Consolidated statement of comprehensive income
For the year ended 30 April 2021
2021 2020
GBP'000 GBP'000
--------------------------------------------- --------- ---------
Revenue 84,368 84,373
Cost of sales (62,365) (61,794)
--------------------------------------------- --------- ---------
Gross profit 22,003 22,579
Administrative expenses (23,320) (25,131)
Credit loss impairment charge (81) (299)
Other operating income 597 1,242
--------------------------------------------- --------- ---------
Operating loss (801) (1,609)
--------------------------------------------- --------- ---------
Operating loss before share-based payments
and other non-underlying items (553) (257)
Share-based payments (153) (116)
Other non-underlying items (95) (1,236)
--------------------------------------------- --------- ---------
Operating loss (801) (1,609)
--------------------------------------------- --------- ---------
Finance expense (607) (654)
Finance income 9 24
--------------------------------------------- --------- ---------
Loss before tax (1,399) (2,239)
Income tax expense (13) (216)
--------------------------------------------- --------- ---------
Loss after tax and total comprehensive loss
for the year attributable to shareholders
of the parent (1,412) (2,455)
--------------------------------------------- --------- ---------
Earnings per share (pence)
Basic (1.3) (3.0)
Diluted (1.3) (3.0)
--------------------------------------------- --------- ---------
All amounts relate to continuing operations. There was no other
comprehensive income in either the current or preceding year.
Consolidated statement of financial position
As at 30 April 2021
2021 2020
GBP'000 GBP'000
------------------------------------ --------- ---------
Non-current assets
Property, plant and equipment 38,243 38,566
Investment property 820 829
Intangible assets 3,772 1,517
------------------------------------ --------- ---------
42,835 40,912
------------------------------------ --------- ---------
Current assets
Inventories 3,022 2,702
Trade and other receivables 32,038 12,633
Corporation tax receivable 84 854
Cash and cash equivalents 8,518 12,188
Assets classified as held for sale - 683
------------------------------------ --------- ---------
43,662 29,060
------------------------------------ --------- ---------
Total assets 86,497 69,972
------------------------------------ --------- ---------
Current liabilities
Trade and other payables 20,833 11,579
Loans and borrowings 230 -
Lease liabilities 3,110 3,875
Provisions 7,635 241
------------------------------------ --------- ---------
31,808 15,695
------------------------------------ --------- ---------
Non-current liabilities
Loans and borrowings 582 -
Deferred consideration 1,521 -
Lease liabilities 6,307 7,461
Deferred tax 2,294 1,572
10,704 9,033
------------------------------------ --------- ---------
Total liabilities 42,512 24,728
------------------------------------ --------- ---------
Net assets 43,985 45,244
------------------------------------ --------- ---------
Equity
Share capital 2,133 2,133
Share premium 8,633 8,633
Other reserve 5,807 5,807
Retained earnings 27,412 28,681
Total equity 43,985 45,244
------------------------------------ --------- ---------
Consolidated statement of cash flows
For the year ended 30 April 2021
2021 2020
GBP'000 GBP'000
------------------------------------------------------ --------- ---------
Cash flows from operating activities
Cash generated from operations 773 8,133
Income tax received/(paid) 1,408 (679)
------------------------------------------------------ --------- ---------
Net cash generated from operating activities 2,181 7,434
------------------------------------------------------ --------- ---------
Cash flows from investing activities
Purchases of property, plant and equipment (2,135) (2,373)
Disposal of property, plant and equipment 899 467
Disposal of assets held for sale 700 -
Acquisition of subsidiary, net of cash acquired (780) -
Purchases of intangibles - (418)
Net cash absorbed in investing activities (1,316) (2,324)
------------------------------------------------------ --------- ---------
Cash flows from financing activities
Proceeds from issue of ordinary shares - 6,666
Share issue transaction costs - (326)
Repayment of bank borrowings (12) (975)
Repayments of Invest to Grow loan - (15)
Principal paid on lease liabilities (3,930) (4,839)
Interest paid on lease liabilities (553) (612)
Interest paid on loans and borrowings (49) (42)
Interest received 9 24
Dividends paid - (800)
Net cash absorbed in financing activities (4,535) (919)
------------------------------------------------------ --------- ---------
Net increase/(decrease) in cash and cash equivalents (3,670) 4,191
Cash and cash equivalents at beginning of year 12,188 7,997
Cash and cash equivalents at end of year 8,518 12,188
------------------------------------------------------ --------- ---------
Consolidated statement of changes in equity
For the year ended 30 April 2021
Non-
Share Share Other controlling Retained Total
Capital premium reserve interest earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ --------- --------- --------- ------------- ----------- ---------
Balance at 1 May 2019 1,600 8,633 - 18 31,810 42,061
------------------------------ --------- --------- --------- ------------- ----------- ---------
Total comprehensive
income - - - - (2,455) (2,455)
Share-based payment
expense - - - - 116 116
------------------------------ --------- --------- --------- ------------- ----------- ---------
Total changes in equity - - - - (2,339) (2,339)
Dividends paid - - - - (800) (800)
Issue of share capital 533 - 6,133 - - 6,666
Write-off of non-controlling
interest - - - (18) - (18)
Share issue costs - - (326) - - (326)
------------------------------ --------- --------- --------- ------------- ----------- ---------
Balance at 30 April
2020 2,133 8,633 5,807 - 28,671 45,244
------------------------------ --------- --------- --------- ------------- ----------- ---------
Total comprehensive
income - - - - (1,412) (1,412)
Share-based payment
expense - - - - 153 153
------------------------------ --------- --------- --------- ------------- ----------- ---------
Total changes in equity - - - - (1,259) (1,259)
Balance at 30 April
2021 2,133 8,633 5,807 - 27,412 43,985
------------------------------ --------- --------- --------- ------------- ----------- ---------
1. Basis of preparation
The consolidated financial statements and announcement of Van
Elle Holdings plc for the year ended 30 April 2021 were authorised
for issue by the Board of Directors on 16 August 2021.
The financial information included within this announcement does
not constitute statutory accounts within the meaning of section 435
of the Companies Act 2006 (the "Act"). The financial information
for the year ended 30 April 2021 has been extracted from the
statutory accounts on which an unqualified audit opinion has been
issued.
The statutory accounts for the year ended 30 April 2021 will be
delivered to the Registrar of Companies following the Company's
Annual General Meeting.
The Group financial statements have been prepared in accordance
with International Accounting standards in conformity with the
requirements of the Companies Act 2006.The Group financial
statements have been prepared on the going concern basis and
adopting the historical cost convention.
Adoption of new and revised standards
During the year, the Group has adopted the following new and
revised Standards and Interpretations. Their adoption has not had
any significant impact on the accounts or disclosures in these
financial statements.
-- Amendments to References to the Conceptual Framework in IFRS
Standards (effective 1 January 2020);
-- Amendments to IFRS 3 Business Combinations - Definition of a
Business (effective 1 January 2020);
-- Definition of Material - Amendments to IAS 1 and IAS 8 (effective 1 January 2020);
-- Interest Rate Benchmark Reform - Amendments to IFRS 9, IAS 39
and IFRS 7 (effective 1 January 2020);
-- COVID-19-related Rent Concessions - Amendment to IFRS 16 Leases (effective 1 June 2020);
New standards, interpretations and amendments not yet
effective
The Group has not early adopted the following new standards,
amendments or interpretations that have been issued but are not yet
effective:
-- Classification of Liabilities as Current or Non-current -
Amendments to IAS 1 (effective 1 January 2022*);
-- Amendments to: IFRS 3 Business Combinations; IAS 16 Property,
Plant and Equipment; IAS 37 Provisions, Contingent Liabilities
and
-- Contingent Assets (effective 1 January 2022); and
-- Annual Improvements to IFRSs (2018-2020 Cycle): IFRS 1; IFRS
9; Illustrative Examples Accompanying IFRS 16; and IAS 41
(effective 1 January 2022).
* Note that the IASB has voted to propose a one-year deferral of
the effective date to 1 January 2023.
2. Segment information
The Group evaluates segmental performance based on profit or
loss from operations calculated in accordance with IFRS but
excluding non-recurring losses, such as goodwill impairment, and
the effects of share-based payments. 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. Loans and
borrowings, insurances and head office central services costs are
allocated to the segments based on levels of turnover. All turnover
and operations are based in the UK.
Operating segments - 30 April 2021
Specialist Ground
General Piling Engineering Head
Piling and Rail Services Office Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- --------- ----------- ------------- --------- ---------
Revenue 27,340 29,345 27,596 87 84,368
----------------------------- --------- ----------- ------------- --------- ---------
Other operating income - - - 597 597
----------------------------- --------- ----------- ------------- --------- ---------
Underlying operating
profit/(loss) 295 1,035 247 (2,130) (553)
Share-based payments - - - (153) (153)
Other non-underlying
items - - - (95) (95)
----------------------------- --------- ----------- ------------- --------- ---------
Operating profit 295 1,035 247 (2,378) (801)
Finance expense - - - (607) (607)
Finance income - - - 9 9
----------------------------- --------- ----------- ------------- --------- ---------
Profit before tax 295 1,035 247 (2,976) (1,399)
----------------------------- --------- ----------- ------------- --------- ---------
Assets
Property, plant and
equipment 8,496 12,405 8,031 9,311 38,243
Intangible assets 26 3,476 262 8 3,772
Inventories 984 1,208 810 20 3,022
----------------------------- --------- ----------- ------------- --------- ---------
Reportable segment
assets 9,506 17,089 9,103 9,339 45,037
Investment property - - - 820 820
Trade and other receivables - - - 32,122 32,122
Cash and cash equivalents - - - 8,518 8,518
Total assets 9,506 17,089 9,103 50,799 86,497
----------------------------- --------- ----------- ------------- --------- ---------
Liabilities
Trade and other payables - - - 20,833 20,833
Provisions - - - 7,635 7,635
Loans & borrowings - - - 812 812
Deferred consideration - - - 1,521 1,521
Lease liabilities - - - 9,417 9,417
Deferred tax - - - 2,294 2,294
Total liabilities - - - 42,512 42,512
----------------------------- --------- ----------- ------------- --------- ---------
Other information
Capital expenditure 96 1,154 2,231 203 3,685
Depreciation/amortisation 1,152 1,601 1,137 1,087 4,978
----------------------------- --------- ----------- ------------- --------- ---------
Operating segments - 30 April 2020
Specialist Ground
General Piling Engineering Head
Piling and Rail Services Office Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- --------- ----------- ------------- --------- ---------
Revenue 29,314 25,359 29,565 135 84,373
----------------------------- --------- ----------- ------------- --------- ---------
Other operating income - - - 1,242 1,242
----------------------------- --------- ----------- ------------- --------- ---------
Underlying operating
profit (897) 334 240 66 (257)
Share-based payments - - - (116) (116)
Other non-underlying
items (1,101) - - (135) (1,236)
----------------------------- --------- ----------- ------------- --------- ---------
Operating profit (1,998) 334 240 (185) (1,609)
Finance expense - - - (654) (654)
Finance income - - - 24 24
----------------------------- --------- ----------- ------------- --------- ---------
Profit before tax (1,998) 334 240 (815) (2,239)
----------------------------- --------- ----------- ------------- --------- ---------
Assets
Property, plant and
equipment 9,180 11,577 7,538 10,271 38,566
Intangible assets 32 1,160 290 35 1,517
Inventories 1,269 644 779 10 2,702
----------------------------- --------- ----------- ------------- --------- ---------
Reportable segment
assets 10,481 13,381 8,607 10,316 42,785
Investment property - - - 829 829
Trade and other receivables - - - 13,487 13,487
Cash and cash equivalents - - - 12,188 12,188
Assets classified
as held for sale - - - 683 683
Total assets 10,481 13,381 8,607 37,503 69,972
----------------------------- --------- ----------- ------------- --------- ---------
Liabilities
Trade and other payables - - - 11,579 11,579
Provisions - - - 241 241
Lease liabilities - - - 11,336 11,336
Deferred tax - - - 1,572 1,572
Total liabilities - - - 24,728 24,728
----------------------------- --------- ----------- ------------- --------- ---------
Other information
Capital expenditure 137 835 2,645 149 3,766
Depreciation/amortisation 1,141 1,612 830 1,039 4,622
----------------------------- --------- ----------- ------------- --------- ---------
There are no individual customers accounting for more than 10%
of Group revenue in the current or preceding year. All revenue is
generated in the UK.
3. Revenue from contracts with customers
Disaggregation of revenue - 30 April 2021
Specialist Ground
General Piling Engineering Head
Piling and Rail Services Office Total
End market GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- ----------- ------------- --------- ---------
Residential 8,009 6,275 23,012 - 37,296
Infrastructure 6,765 19,302 2,396 - 28,464
Regional construction 12,602 3,768 2,112 - 18,481
Other 37 - 3 87 127
----------------------- --------- ----------- ------------- --------- ---------
Total 27,413 29,345 27,523 87 84,368
----------------------- --------- ----------- ------------- --------- ---------
Head office revenue relates to revenue generated from the
provision of training services.
Disaggregation of revenue - 30 April 2020
Specialist Ground
General Piling Engineering Head
Piling and Rail Services Office Total
End market GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- ----------- ------------- --------- ---------
Residential 13,677 2,523 25,101 - 41,301
Infrastructure 2,215 19,088 2,671 - 23,974
Regional construction 13,292 3,645 1,791 - 18,728
Other 130 103 2 135 370
----------------------- --------- ----------- ------------- --------- ---------
Total 29,314 25,359 29,565 135 84,373
----------------------- --------- ----------- ------------- --------- ---------
4. Other non-underlying items
2021 2020
GBP'000 GBP'000
--------------------------------------------- --------- ---------
Exceptional costs 95 652
Impairment of property - 486
Impairment of goodwill - 1,101
Research and development expenditure credit
relating to prior years - (1,003)
--------------------------------------------- --------- ---------
95 1,236
--------------------------------------------- --------- ---------
Current year exceptional costs relate to the acquisition costs
for the purchase of ScrewFast Foundations Limited on 1 April 2021.
Prior year exceptional costs relate to restructuring including
redundancy and CEO compensation as the Group made the final changes
to the operating divisions, the streamlining of which began in
2018, and costs incurred in the resolution of the technical
compliance irregularity concerning the final dividend for the year
ended 30 April 2019.
The Group vacated the site located at Pinxton during the prior
financial year and sub-let the site to a third party. The valuation
of the site undertaken to establish rental values indicated
impairment of the property. An impairment loss of GBP486,000 was
recognised in respect of this investment property.
The goodwill allocated to the General Piling division was
impaired by GBP1,101,000 in the prior year and was considered to be
non-underlying.
Prior year income in respect of a research and development
expenditure credit claim relating to financial years ending 2018
and 2019 was considered to be non-underlying as it related to
previous financial years.
5. Income tax expense
2021 2020
GBP'000 GBP'000
--------------------------------------------------- --------- ---------
Current tax (credit)/expense
Current tax on profits for the year - -
Adjustment for over provision in the prior
period (554) (59)
--------------------------------------------------- --------- ---------
Total current tax credit (554) (59)
--------------------------------------------------- --------- ---------
Deferred tax expense
Origination and reversal of temporary differences 282 195
Adjustment for over provision in the prior
period 285 (66)
Effect of decreased tax rate on opening balance - 146
--------------------------------------------------- --------- ---------
Total deferred tax expense 567 275
--------------------------------------------------- --------- ---------
Income tax expense 13 216
--------------------------------------------------- --------- ---------
The reasons for the difference between the actual tax charge for
the year and the standard rate of corporation tax in the United
Kingdom applied to profits for the year are as follows:
2021 2020
GBP'000 GBP'000
--------------------------------------------- --------- ---------
Loss before income taxes (1,399) (2,239)
--------------------------------------------- --------- ---------
Tax using the standard corporation tax rate
of 19% (2020: 19%) (266) (425)
Adjustments for over provision in previous
periods (269) (125)
Expenses not deductible for tax purposes 121 223
Income not taxable (39) (195)
Unused tax losses for which no deferred tax
asset has been recognised 466 592
Tax rate changes - 146
--------------------------------------------- --------- ---------
Total income tax expense 13 216
--------------------------------------------- --------- ---------
During the year ended 30 April 2021, corporation tax has been
calculated at 19% of estimated assessable profit for the year
(2020: 19%).
The March 2021 Budget announced a further increase to the main
rate of corporation tax to 25% from 1 April 2023. This rate has not
been substantively enacted at the balance sheet date, as result
deferred tax balances as at 30 April 2021 continue to be measured
at 19%.
6. Dividends
2021 2020
GBP'000 GBP'000
--------------------------------------------- ---------- ---------
Final dividend - year ended 2020
Nil per ordinary share paid during the year
(2020: 1.0p) - 800
Interim dividend - year ended 2021
Nil per ordinary share paid during the year - -
(2020: Nil)
- 800
-------------------------------------------------------- ---------
No final dividend is proposed for the year ended 30 April
2021.
7. Earnings per share
The calculation of basic and diluted earnings per share is based
on the following data:
2021 2020
GBP'000 GBP'000
-------------------------------------------- --------- ---------
Basic weighted average number of shares 106,667 81,534
-------------------------------------------- --------- ---------
GBP'000 GBP'000
-------------------------------------------- --------- ---------
Loss for the year (1,412) (2,455)
-------------------------------------------- --------- ---------
Add back/(deduct):
Share-based payments 153 116
Other non-underlying items 95 1,236
Tax effect of the above - (124)
-------------------------------------------- --------- ---------
Underlying loss for the year (1,164) (1,227)
-------------------------------------------- --------- ---------
Pence Pence
-------------------------------------------- --------- ---------
Earnings per share
Basic (1.3) (3.0)
Diluted (1.3) (3.0)
Basic - excluding share-based payments and
other non-underlying items (1.1) (1.5)
Diluted - excluding share-based payments
and other non-underlying items (1.1) (1.5)
-------------------------------------------- --------- ---------
There is no dilutive effect of the share options given the loss
in the current year and as in the previous year the performance
conditions remain unsatisfied or the share price was below the
exercise price.
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders and on 106,666,650
ordinary shares (2020: 81,534,246), being the weighted average
number of ordinary shares.
The underlying earnings per share is based on profit adjusted
for share-based payment charges and other non-underlying items, net
of tax, and on the same weighted average number of shares used in
the basic earnings per share calculation above. The Directors
consider that this measure provides an additional indicator of the
underlying performance of the Group.
8. Cash generated from operations
2021 2020
GBP'000 GBP'000
------------------------------------------------- --------- ---------
Operating profit (801) (1,609)
Adjustments for:
Depreciation of property, plant and equipment 4,844 4,533
Amortisation of intangible assets 125 89
Impairment of investment property 9 486
Impairment of assets available for sale - 36
Impairment of goodwill - 1,101
Profit on disposal of property, plant and
equipment (272) (107)
Write off of non-controlling interest - (18)
Share-based payment expense 153 116
------------------------------------------------- --------- ---------
Operating cash flows before movement in working
capital 4,058 4,627
Decrease/(increase) in inventories 869 180
Decrease in trade and other receivables (10,688) 7,925
Decrease in trade and other payables 6,437 (4,624)
Increase/(decrease) in provisions 97 5
Cash generated from operations 773 8,113
------------------------------------------------- --------- ---------
9. Analysis of cash and cash equivalents and reconciliation to net debt
Cash Non-cash
2020 flows flows 2021
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------- --------- --------- ---------
Cash at bank 12,151 (3,671) - 8,480
Cash in hand 37 1 - 38
---------------------------- --------- --------- --------- ---------
Cash and cash equivalents 12,188 (3,670) - 8,518
Loans and borrowings - - (812) (812)
Lease liabilities (11,336) 4,483 (2,564) (9,417)
---------------------------- --------- --------- --------- ---------
Net debt including IFRS 16
lease liabilities 852 813 (3,376) (1,711)
---------------------------- --------- --------- --------- ---------
Cash flows in respect of lease liabilities include interest paid
on leases of GBP553,000 (2020: GBP612,000) and principal paid of
GBP3,930,000 (2020: GBP4,839,000).
Non-cash flows in respect of loans and borrowings relates to
liabilities introduced on acquisition of ScrewFast Foundations
Limited.
Non-cash flows in respect of lease liabilities include the
purchase of GBP1,535,000 (2020: GBP975,000) of fixed assets on
lease, GBP476,000 (2020: Nil) introduced on the acquisition of
ScrewFast Foundations Limited and interest expense of GBP553,000
(2020: GBP612,000).
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