Van Elle Share Discussion Threads

[chrisdgb] 17/9/2021 13:53

Feel really positive with this one.......

[boystown] 18/8/2021 17:38

Tipped by Master Investor FWIW. I have some (but wish I hadn't for the last couple of years!). Here it is.... Yesterday’s finals announcement from Van Elle Holdings (LON:VANL), the UK’s largest ground engineering contractor, were very much in line with my expectations from when I first profiled the company in late March this year. With revenues unchanged at £84.4m for the year to end April, the group reported an adjusted pre-tax loss of £1.2m against £0.9m previously. The impact of Covid-19 upon the company’s trading was really quite evident. But that was the last year Looking deeper into the results, and after having talked with the group’s CEO and CFO yesterday morning, I now have a strong opinion that times are getting better. Already we know that the first quarter of the current year to end April 2022 has shown some positive trading. The group’s order book as at 9 August was standing at £34.7m, up from £26.4m on 1 June. The group’s business It provides a range of ground engineering techniques and services including – ground investigation, general and specialist piling, rail geotechnical engineering and modular foundations as well as ground improvement and stabilisation services. In the last year it handled 1020 projects, giving its fleet of 115 rigs a utilisation rate of around 51%. It would have been a lot higher had it not been for the pandemic hassles. It managed 930 projects in the prior year. Three main divisions The group operates through three divisions: general piling (190 projects), specialist piling and rail (284 projects) and ground engineering services (546 projects). General piling provides a range of larger piling and ground engineering solutions for open-site construction projects. This side generated £27.3m of revenues last year. Specialist piling and rail covers a range of geotechnical solutions in operationally constrained environments including on-track rail applications. Handled £29.3m of revenues. Ground engineering services offers various ground investigation and geotechnical services and modular foundation solutions. Managed £27.6m in revenues. Three main markets The order book is derived from the company focusing upon three end-markets: residential and housing, infrastructure and regional construction. Residential business, with customers like Barratt Developments, Taylor Wimpey and Persimmon, generated sector revenues of 44% of the £84.4m total. Infrastructure, for clients like Network Rail, Highways England and HS2, created some 34% of the group’s total. Regional construction, covering work for Galliford Try, Morgan Sindall and Kier, made up 22% of the overall turnover. Covid-19 was a delaying factor The dreaded virus held the group back somewhat, as it progressed under its relatively recent appointed management team, headed by CEO Mark Cutler, who joined three years ago, and CFO Graeme Campbell, who came on board a year and a half since. Perhaps a one-year delay in its sales and profit hike was the result. However, the corporate growth strategy remains firmly in place. But this year it is a different story The first quarter’s strength of business together with a strong balance sheet with £8.5m cash, a growing order book and the prospects of delayed rail business being enacted all combine to make this a very interesting recovery prospect. Peel Hunt estimates 52p a share Analysts at Peel Hunt rate the group’s shares as a “buy” with a price objective of 52p. They go for £97.3m sales this year, generating a £3m adjusted pre-tax profit which is worth 2.3p per share in earnings. For the next year they see £104.3m sales and £5m profits, working out at 3.8p per share in earnings. Zeus Capital see 64.4p of value Zeus Capital initiated coverage of the company yesterday. Their analyst Andy Hanson is more bullish than those at Peel Hunt. For this year, he has gone for £102.7m of sales, £2.6m profits and 1.9p of earnings. He sees this leading on to £108.1m sales in the next year with £4.6m of profits and 3.5p earnings. Further down the line, Hanson estimates that the end April 2024 year will see £113.5m of revenues and £6.5m of pre-tax profits, worth 4.9p per share in earnings and covering a 1.7p dividend. Based upon his estimates, his valuation of the shares is 64.4p. AGM at end of September The group will be holding its AGM on Monday 27 September, at which time another Trading Update will be issued. Fingers crossed it will be positive and give detail of further progress in achieving greater rail orders. Massive dealing volume yesterday The group’s shares closed at around 46p last night after a considerable dealing volume of over 1.1m shares, against the recent average daily turnover of just 30,685 shares dealt. Up 37% since profile The company’s shares have climbed by 37% to 51.5p since I profiled the company in late March at 37.5p. At the current 46p they are still up nearly 23% in just over four months, but I think this is just the start. My View – another 30% plus to go for I see them easily breaking back over the 50p level and upwards to 60p before the end of the year, which offers another 30% plus price lift. Great upside not to be missed.

[sphere25] 17/8/2021 14:15

Pretty much the same theme all round with this cautionary statement: "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." So they only hit forecasts IF there is no deterioration in the above, except there have been a few companies coming out recently and putting out warnings because of the above. It doesn't matter as much if you're long term, but in the near term it will be interesting to see if more do follow with the warning's and how folk are approaching things. Clearly if some big buyers come into this or another share post a report like that, it becomes easier to follow them in and piggyback off the demand. However, if that doesn't happen, is it worth the risk here? What if the company warns? Perhaps it is better to wait if unsure. VANL has a history of being profit warning central so not the best example, but there are definitely going to be a few landmines out there. If it is all very transitory, then it could be ok, but what if the FED is wrong and inflation does spiral more than expected? What if rates have to climb sooner and more that expected, the US market will likely come off heavy then. The markets are stable though, no drama so there isn't much expectation that this threat plays out. The FED has been fudging their policy around inflation too, but so long as the market buys it, shouldn't be explosions out there. But who knows, you always get commentators on both sides, but I am following the market. As long as it stays stable and the bond yields aren't flying higher, it is ok to keep looking for the opportunities on the long side. All imo DYOR

[chrisdgb] 17/8/2021 08:44

Solid recovery and I suspect more room for the right acquisition.....Zeus Capital I note initiate with 64.4p target......

[chrisdgb] 04/8/2021 10:46

Results in two weeks will hopefully reveal more.......

[chrisdgb] 22/7/2021 14:22

Should be trading their socks off.............

[redartbmud] 14/6/2021 08:33

Bottomfisher I totally agree. Summaries can be found usually under the 'Fundamentals' header on websites such as the London Stock Exchange, London South East Trading etc. They supply summary data that has been extracted from the report & accounts covering P&L; Balance Sheet and some key ratio's. It is a good snapshot of trends, without the detail. red

[bottomfisher] 14/6/2021 08:11

Thanks for that Red. Bolsters my view that all companies should be required to include a 5-year table in their annual reports covering basic financial information such as revenues, profits, net assets, net debt, staff numbers etc. Companies which are confident enough to include this kind of financial review tend to make more reliable long-term investments.

[redartbmud] 13/6/2021 22:26

Bottom Looks at Revenue and Operating Profit annually from 2016 onwards. Flat revenues and rapidly declining operating margins. Agreed, the last reported results include covid disruption, but that has only exacerbated what was already happening to the annually reported numbers. It doesn't require a major analysis to see the scale of the problem. red PS. I still hold.

[bottomfisher] 12/6/2021 10:40

Dear Red, Interested in your comment that "this business still contains major structural problems within the business model". Any chance of elaborating on what these are? Kind regards

[redartbmud] 11/6/2021 11:40

PUGUGLY I am a retired Finance Director and FCA. I would never have put out that statement in that form. It is not clear as to the exact meaning. red

[pugugly] 11/6/2021 11:27

Red - No you are not! Looks as though a jargon word for accountants and therefore not easily understood by the general public,

[redartbmud] 11/6/2021 10:25

I emailed the PR company and this is the answer: Thanks for your email. ‘Ahead of’ is commonly used to refer to better than. i.e. in this case, losses before tax will be better than the forecasts and therefore a lower loss before tax than previously expected. Regards, Hmm..... Now I know. I am thick. I should have known all along, except I didn't know. Did I? red

[muckshifter] 11/6/2021 08:34

Agree that momentum is good news, but still found the update a bit disappointing. Any significant sentence which reads as ambiguously as the one PUGUGLY highlights troubles me, and I find it hard to believe that the ambiguity isn't deliberate, as the sentence must have been read and considered by a few senior people, and they can't all have failed English O Level.

[redartbmud] 11/6/2021 08:12

PUGUGLY Totally agree. This business still contains major structural problems within the business model. I am not sure what steps are still needed to solve them. As for that sentence. Shoot the messenger!! red

[chrisdgb] 11/6/2021 08:04

Momentum is clearly very strong, the future is the focus not the past....!

[pugugly] 11/6/2021 07:47

Trading update out - Initial reaction trying to justify slightly increased LOSS- not happy reading - Recovery of profitability kicked down the road yet again - either one for the bottom drawer or take a loss and redeploy funds to more likely profitable area. This section badly worded (imo) "adjusted loss before tax to be slightly ahead of consensus forecasts" Does this mean a bigger loss or a lower loss? E- for use of English!!

[chrisdgb] 10/6/2021 11:07

Are we due a trading update soon......should be flying...?

[chrisdgb] 24/5/2021 13:53

Should be good momentum in the business at the moment..........

[the oak tree] 22/4/2021 17:20

Thanks Muckshifter.

[muckshifter] 22/4/2021 10:27

Missed the live presentation, but watched it this morning, and I'm impressed. As I originally thought, the two companies have very complementary skills and client lists, and, hopefully, the two management staffs know each other well enough to make a great success of the takeover for all concerned. One "omission", imo, from the presentation was that they emphasised the attraction of the safety benefit to clients of offsite fabrication cutting numbers and exposure of manpower on site to a minimum, but didn't even mention the other significant benefit, to the main contractor, on such as motorway upgrades. My expectation, after a working life in major civils contracting, is that work such as motorway and perhaps rail upgrades is dominated by the need to programme site occupancy between perhaps 20 subcontractors successfully, with the ever present probability of unforeseen events interrupting the programme. In such circumstances employing a contractor who can cut on site time to a minimum, thereby giving the main contractor extra float, is a great advantage. The other possible benefit is that provided the main contractor can get off site manufacture of systems paid as "materials on site" in early valuations well before the programmed installation, and of course pay VanL, which shouldn't be a problem, it provides the main contractor with a further possible flexibility in their programming. Perhaps diplomacy prevented this sort of stuff from being mentioned in the presentation.

[hybrasil] 16/4/2021 15:50

I have been averaging down the past few days. It’s beginning to look squeezy

[muckshifter] 12/4/2021 08:34

Interesting RNS this morning about a presentation related to the recent acquisition on IMC next week. It looks like Van Elle are very pleased with the acquisition, so it will be interesting to me on two counts: what the presentation says about how Screwfast enhance the company's prospects; and a first look at the Screwfast MD and how he & the Van Elle management "gel". I remain hopeful that he will add further strengths to the team, and that Screwfast will prove a good acquisition.

[muckshifter] 01/4/2021 11:07

Yes, I agree it does look like a nice acquisition. The fact that the two companies have worked alongside each other on several projects means, imo, that Van Elle really have been able to study the company in action over a period of years, and that their offering is different and complementary to Van Elle's capabilities, or they would not be working alongside each other. It also looks like facilitating entry to new lines of work, and might add further entrepreneurial skills to the team. Quite pleased by the announcement.

[chrisdgb] 01/4/2021 09:06

Well, a nice looking acquisition this morning....growth ambitions abound......