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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Van Elle Holdings Plc | LSE:VANL | London | Ordinary Share | GB00BYX4TP46 | ORD 2P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 37.00 | 36.00 | 38.00 | 37.00 | 37.00 | 37.00 | 59,023 | 08:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Engineering Services | 148.73M | 4.68M | 0.0438 | 8.45 | 39.49M |
TIDMVANL
RNS Number : 6848A
Van Elle Holdings PLC
24 January 2024
Van Elle Holdings plc
('Van Elle', the 'Company' or the 'Group')
Interim Results for the six months ended 31 October 2023
Analyst Briefing and Investor Presentation
Van Elle Holdings plc, the UK's largest ground engineering contractor, announces its Interim Results for the six months ended 31 October 2023 (the 'Period').
GBPm 6 months 6 months ended ended 31 Oct 2023 31 Oct 2022 ---------------------------------------------------------------------- ------------- ------------- Revenue 68.2 80.8 EBITDA(1) 6.2 6.4 Operating profit 2.7 3.5 Operating profit margin 3.9% 4.3% Profit before taxation 2.5 3.3 Basic earnings per share (p) 1.6 2.6 ROCE(2) 10.0% 11.2% Net funds / (debt) 1.9 (2.5) Net funds (excluding IFRS 16 property and vehicle lease liabilities) 8.9 3.5 Interim dividend per share (p) 0.4 0.4 ---------------------------------------------------------------------- ------------- -------------
(1) EBITDA is defined as earnings before interest, tax, depreciation and amortisation
(2) Return on capital employed is defined as 12-month rolling operating profit divided by average net assets excluding net debt
There are no non-underlying items reported in the current or comparative Period.
Period highlights
-- Resilient performance in challenging market conditions, delivering an operating margin of 3.9%, consistent with FY2023.
-- As expected, revenue was 16% below the prior year, with the comparative period benefitting from stronger housing, construction and infrastructure markets.
-- Good progress in the development of growth opportunities in the energy and water sectors.
-- Establishment and commencement of trading of the Canadian rail subsidiary for which costs have been absorbed in the Period, including the impact of some initial delays to expected work volumes.
-- The Group's growing innovation investment, aligned to its growth markets, is reflected in a stronger research and development claim reported in other operating income.
-- Balance sheet remains robust and strong cash generation delivered an increase in net funds (excl. IFRS 16 property and vehicle lease liabilities), retaining significant liquidity headroom.
-- Interim dividend declared of 0.4 pence per share, consistent year on year.
Outlook
-- Good progress is being made on the Group's strategies in the energy and water sectors, both of which are expected to deliver significant growth opportunities into the medium term. Several customer frameworks have been agreed in the Period and initial schemes are expected to commence in late FY2024.
-- Work volumes in the rail sector will dip in the transition to Control Period 7 (CP7) but are expected to be offset by the Group's framework position on the TransPennine Route Upgrade. The Board expects opportunities arising from CP7 to be significantly stronger than CP6 as a result of increasingly close customer partnerships.
-- In highways, the Group's work on the retrofit safety measures as a framework partner on the Smart Motorway Programme Alliance are scheduled to commence in H2 FY2024.
-- The new build housing and residential sector is expected to remain challenging in the short term but there are early signs of market recovery, and the Board anticipates a return to higher volumes in FY2025.
-- The commercial and industrial markets show signs of increased confidence compared to the last 12 months, underpinning expected an increased utilisation in FY2025 in the General Piling division.
-- The integration of Rock & Alluvium, which became part of the Group on 30 November 2023, is progressing well and is expected to be accretive to underlying earnings in FY2025. The Group's trading agreement with Galliford Try is expected to deliver GBP10-15m of incremental revenues from FY2025.
-- The Board remains confident in achieving market expectations for the full year. (1)
(1) Company compiled analyst consensus for FY2024 underlying profit before tax is GBP5.0m.
Mark Cutler, Chief Executive, commented:
"These results represent a resilient performance in the face of expected challenging market conditions throughout FY2024, reflecting the benefits of the Group's diversified end-market exposure. Despite the anticipated lower revenues, operating margin has been maintained at FY2023 levels, our balance sheet is stronger, and our future prospects are more compelling. We are very pleased with the acquisition of Rock & Alluvium shortly after the Period end. The Group is developing a strong market position in the energy and water sectors and is well placed to benefit from a recovery in activity levels in housing, construction, rail and highways in FY2025."
Analyst Briefing: 9.30am on Wednesday 24 January 2024
An online briefing for Analysts will be held at 9.30am today. Analysts interested in attending should contact Walbrook PR on vanelle@walbrookpr.com or 020 7933 8780.
Investor Presentation: 3.30pm on Wednesday 24 January 2024
Mark Cutler, Chief Executive Officer, and Graeme Campbell, Chief Financial Officer, will hold a presentation to review the results and outlook at 3.30pm today. The presentation will be hosted 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 corporate Tel: 020 7418 8900 broker) Ed Allsopp / Ben Harrington Walbrook PR Limited Tel: 020 7933 8780 or vanelle@walbrookpr.com Tom Cooper / Nick Rome 07971 221 972 or 07748 325 236
About Van Elle Holdings plc:
Van Elle Holdings is the UK's largest specialist geotechnical engineering contractor. Formed in 1984 and listed on AIM in 2016, the Company provides a wide 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 Rail, and Ground Engineering Services; and is focused on diverse end markets including residential and housing, infrastructure and regional construction - across which the Group has completed more than 20,000 projects over the last 40 years.
Van Elle Holdings plc - Interim Report to 31 October 2023
Results overview
The Group's results for the Period are in line with the Board's expectations, reflecting a resilient operational performance despite challenging market conditions, continuing inflationary pressures and delayed project starts.
Half year revenue of GBP68.2m, represents a decrease of 16% on the prior period (H1 FY2023: GBP80.8m). Operating margin has remained consistent with the prior year at 3.9% (FY2023: 3.9%).
The Group experienced softer market conditions in the Period, with continued uncertainty impacting activity levels in all end markets. Performance in the residential sector was consistent with Board expectations with new build housing delivering reduced volumes, which is a trend expected to continue throughout the second half of the financial year. There remains a strong need for new housing in the UK and the market is showing some early signs of recovery in some regions, supported by a reduction in mortgage rates towards the end of 2023.
The Infrastructure and Construction markets were also relatively subdued. Infrastructure was impacted by inflationary pressures and widespread delays to major projects which were expected to commence in the Period. However, the Group has made strong progress on substantial growth opportunities in the energy and water sectors, where investment is forecast to grow significantly over the long term.
The costs of establishing the Group's new Canadian rail subsidiary have been absorbed in the Period. Initial projects commenced in the second quarter, although delays in mobilising reflected lower levels of activity than originally expected.
Inflationary pressures have continued to adversely affect the cost base, particularly through wage inflation. Cost saving measures are being implemented where possible to help manage the Group's cost base.
The Group delivered an operating profit of GBP2.7m (H1 FY2023: GBP3.5m).
Net funds as at 31 October 2023 (excluding IFRS 16 property and vehicle lease liabilities) increased to GBP8.9m, from GBP7.5m. Net capital expenditure of GBP2.5m primarily represents continued investment in the rig fleet, with higher margin and utilisation rigs being targeted for acquisition. The Group paid the final remaining consideration of GBP0.7m, for the acquisition of ScrewFast Foundations Limited, and the FY2023 final dividend of GBP0.9m in the Period.
The Group continued to maintain a strong balance sheet with a healthy cash balance and significant liquidity headroom against its GBP11.0m funding facility, which remains unused. Group debt reduced to GBP0.1m, excluding IFRS 16 lease liabilities.
The order book at 31 December 2023 was GBP42.0m including GBP11.6m for Rock & Alluvium. On a like-for-like basis, this reflects a slight reduction from the position at 31 October 2023 of GBP32.7m primarily due to the quieter winter trading period.
Market overview
The Group operates in the following three market sectors:
-- Residential constituted 43% of Group revenues in the Period (38% in H1 FY2023). Sector revenue decreased by 5% to GBP29.3m (H1 FY2023: GBP30.9m).
Van Elle's teams deliver integrated ground improvement, piling and modular, precast concrete foundation systems for national and regional housebuilders, retirement and multi-storey residential properties.
Demand for the Group's Smartfoot system was strong in the first quarter, with high activity levels continuing the momentum achieved in the prior year. New building regulations, introduced towards the end of Q1 FY2024, resulted in the acceleration of some residential projects, which provided a temporary increase to revenues during the early part of the financial year.
As anticipated, the impact of increasing interest rates and general market uncertainty caused a decrease of the rate of new build starts during the second quarter. Lower volumes are expected to continue throughout the second half of the financial year, however the Group has a balanced exposure to affordable and partnership housing as well as private sector housebuilders, which helps to provide some resilience.
The Board remains confident that Van Elle's unique range of geotechnical solutions for housebuilders will continue to prove popular with volume housebuilders when markets recover.
-- Infrastructure constituted 42% of Group revenues in the Period (39% in H1 FY2023). Sector revenue decreased by 9% to GBP28.7m (H1 FY2023: GBP31.6m).
Group activities include specialist ground engineering services to the rail, highways, energy, coastal, flooding and utility sectors.
Activity levels in the rail sector were strong in the Period as CP6 entered its final year before the planning phase of CP7 commences, which will result in lower revenue in the second half of the financial year. Work on the major electrification programmes in south Wales and the east midlands is now largely complete. However, the Group is a framework partner on the TransPennine Route Upgrade (TRU) programme and site work is expected to commence in H2 2024 and is expected to provide a solid base of workload during FY2025.
In Canada, rail work commenced in the second quarter, but project start dates have been delayed resulting in lower activity levels than expected. Project delays continued to impact for the remainder of 2023 but activity levels have improved in January 2024. The ONxpress Toronto Metro expansion project has been delayed until late 2025. Accordingly, the Group is reviewing its strategy and evaluating other revenue opportunities.
Government spending in the highways sector has been lower than anticipated, with several major projects being delayed. The Group's appointment to the Smart Motorways Programme Alliance (SMPA) framework in FY2023 has also delivered lower volumes than expected following the cancellation of any new all-lane running Smart Motorway projects although works on the retrofit emergency refuge areas is expected to commence in H2 FY2024.
The Group has made good progress on substantial growth opportunities in the energy and water sectors, with several customer frameworks agreed in the Period and an identified bidding pipeline of approximately GBP300m over the next five years. This is further strengthened by the launch of a dedicated civil engineering team targeted on integrated civils and foundations opportunities in the rail, energy and water sectors.
-- Regional Construction constituted 14% of Group revenues (22% in H1 FY2023). Sector revenue decreased by 47% to GBP9.7m (H1 FY2023: GBP18.1m).
The Group delivers a full range of piling services, and the growth of our ground improvement specialism has assisted in accessing a wider range of attractive projects in the industrial sector and continues to perform well since its inception in FY2020.
Growth in the prior year was primarily driven by a select few larger commercial projects in central London, delivered substantially by the General Piling division. With the backdrop of a more challenging and price sensitive regional construction market in the Period, activity levels were below the previous period. The Group's activities in central London have been strengthened by the acquisition of Rock & Alluvium shortly after the Period end.
Operating structure
Van Elle's operational Group structure has remained consistent and is reported in three segments:
-- General Piling : open site; larger projects; key techniques being large diameter rotary, CFA piling and precast driven piling.
-- Specialist Piling and Rail : restricted access and low headroom piling; extensive rail mounted capability; helical piling and steel modular foundations (ScrewFast); sheet piling, soil nails and anchors, mini-piling and ground stabilisation projects.
-- Ground Engineering Services : driven and CFA piling for housebuilders, precast concrete modular foundations (Smartfoot); ground investigation and geotechnical services (Strata Geotechnics).
General Piling
Revenue decreased by 13% in the Period to GBP25.4m (H1 FY2023: GBP29.3m), representing 37% of Group revenues.
The General Piling division operates across each of the Group's three market segments. Market conditions remained highly competitive, with price sensitive tendering being a key factor in work winning.
Revenue growth was achieved in the Residential sector with several significant contracts delivered, particularly in the first quarter of the financial year. Infrastructure workload benefited from the completion of the first phase of a major energy sector contract in the Period. Regional Construction revenues were lower than the comparative period, mainly due to a very strong order book being brought forward into the previous year.
Operating profit was GBP1.8m for the Period (H1 FY2023: GBP2.3m) reflecting the reduced activity levels.
The Group acquired Rock and Alluvium Limited on 30 November 2023, which increases the division's geographic activity in the Southeast and expands capacity for additional CFA piling, primarily reported in the General Piling division activities.
Specialist Piling and Rail
Revenue decreased by 18% in the Period to GBP20.3m (H1 FY2023: GBP24.8m), representing 30% of Group revenues.
Specialist Piling experienced softer market conditions towards the end of the previous financial year, which continued into the first half of FY2024, primarily due to delays to major infrastructure work on highways and a short-term decrease in demand for drill and grout activity. Work-winning improved towards the end of the Period and the division is now expected to operate at near capacity for the second half of the financial year. The medium-term outlook for the division's work in the infrastructure sector remains very positive, with significant growth opportunities in the high-voltage power sector supporting the development of the UK's electricity transmission networks.
The Rail division delivered strong revenues in the Period, as CP6 entered its final year before CP7 commences. A decrease in activity levels is anticipated until CP7 work starts. However, the Group is a framework partner on the TransPennine Route Upgrade (TRU) programme and site work is expected to commence in Q4 FY2024 and provide a solid base of workload for up to three years.
As previously referenced, in Canada the ONxpress Toronto Metro expansion project has been delayed until H2 FY2025.
Operating profit for the division decreased to GBP0.5m (H1 FY2023: GBP1.1m).
Ground Engineering Services
Revenue decreased by 17% in the Period to GBP22.1m (H1 FY2023: GBP26.6m), representing 32% of Group revenues. Ground Engineering consists of the Housing division and Strata Geotechnics.
The Housing division delivers integrated piling and Smartfoot foundation beam solutions to UK housebuilders. Demand was very strong in the first quarter, with high activity levels continuing the momentum achieved in the prior year but as anticipated, the impact of increasing interest rates and general market uncertainty caused a drop in the rate of new build starts during the second quarter. Lower volumes are expected to continue throughout the second half of the financial year and costs are being managed to mitigate this impact, although demand for new build housing remains strong and the market is expected to recover during FY2025.
Strata Geotechnics reported further growth with increased revenue of GBP4.1m (H1 FY2023: GBP3.5m) with gross margin at the upper end of the Group's activities. Progress was maintained in infrastructure work, particularly in the highways sector and on HS2 ground investigation projects. Strata had secured a place on the GBP800m phase 2 ground investigation framework, therefore the cancellation of phase 2b of HS2 was particularly disappointing.
Underlying operating profit for the segment decreased to GBP1.8m (H1 FY2023: GBP2.5m) reflecting the lower activity levels in Housing.
Strategy
Good progress continues to be made against the final phase of the Group's strategy, with a wider range of diversified capabilities in place and market opportunities supported by stronger relationships with key customers and reliable performance on operational delivery.
The Group has navigated a challenging period, delivering a resilient performance, and remains well positioned with a strong balance sheet for when its end markets recover. Despite the short-term volatility and reduced activity levels, the Board remains confident in delivering 6% operating profit and 15-20% ROCE by FY2027 driven through organic revenue growth supplemented by strategic bolt-on acquisitions.
ESG
In FY2021, the Group initiated its Sustainability Strategy, aligned with the UN Sustainable Development Goals that are most applicable to Van Elle's operations. This strategy encompasses objectives, targets, and key performance indicators, with business leaders managing its implementation. We aim to measure our strategy against key performance indicators annually to monitor our performance and identify continuous improvement measures. Our long-term "Net Zero by 2050" commitment is supported in the medium term by a roadmap to 2030, which provides a clear strategic pathway to a 30% reduction in our greenhouse gas emissions from a 2020 baseline.
We have made a commitment to developing 'Science Based Targets' to set achievable emissions reduction targets against a representative base year to achieve Net Zero by 2050 and are actively engaging with our supply partners to understand the greenhouse gas emissions arising from the materials and services with which they provide to us.
Our primary Scope 1 emissions arise from fuel usage. We are exploring transitional solutions to mitigate these emissions while new technologies are being assessed and developed. Recent improvements include the expansion of our company car scheme to encompass hybrid and electric vehicles, now increasingly adopted by our staff. Additionally, we've equipped our head office with electric vehicle charging stations for both employees and visitors.
In the previous financial year, the Group reduced its Scope 2 emissions through a new electricity purchase agreement, which is from 100% renewable sources (certified under the Renewable Energy Guarantees of Origin scheme).
Dividend
The Board acknowledges that dividends continue to represent an important constituent of total shareholder returns, and accordingly has declared an interim dividend of 0.4 pence per share.
The interim dividend will be payable on 15 March 2024 to shareholders on the share register as at 23 February 2024. The shares will be marked ex-dividend on 22 February 2024.
Current trading and outlook
Market conditions in the short term, especially in respect of new build housing, are expected to remain challenging in the current financial year. Since the Period end, lower volumes in housing have been broadly offset by a recovery in infrastructure and construction activity levels.
Although the Group has experienced delays to major infrastructure works in the Period, more recently, a strong pipeline of contract awards has been secured providing greater confidence in the medium-term outlook in the infrastructure sector. There are significant growth opportunities in the energy and water sectors alongside expected upturns in investment levels and increased market share in highways and rail.
The Group acquired Rock and Alluvium Ltd and entered into a five-year trading agreement with Galliford Try on 30 November 2023. The integration of Rock & Alluvium into Van Elle is progressing well, and the Board expects the acquisition to be accretive to underlying earnings in the first full year of ownership, which was reflected in upgraded market expectations for FY2025 and beyond.
The Board continues to expect results in line with market expectations for the current financial year and is confident the Group is well positioned over the medium term across all its core markets.
Mark Cutler
Chief Executive Officer
24 January 2024
Condensed consolidated statement of comprehensive income
6 months 6 months 12 months to 31 Oct to to 30 Apr 2023 (unaudited) 31 Oct 2023 (audited) GBP'000 2022 (unaudited) GBP'000 Note GBP'000 ------------------------------------ ------- ------------------ ------------------ ---------------- Revenue 2,3 68,210 80,836 148,734 Cost of sales (47,544) (60,211) (108,646) ------------------------------------ ------- ------------------ ------------------ ---------------- Gross profit 20,666 20,625 40,088 Administrative expenses (18,769) (17,309) (35,089) Credit loss impairment charge (93) - (45) Other operating income 859 169 904 ------------------------------------ ------- ------------------ ------------------ ---------------- Operating profit 2,663 3,485 5,838 Finance expense (177) (200) (487) Finance income 3 - - Profit before tax 2,489 3,285 5,371 Income tax expense (814) (465) (693) ------------------------------------ ------- ------------------ ------------------ ---------------- Profit after tax and total comprehensive income for the year attributable to shareholders of the parent 1,675 2,820 4,678 ------------------------------------ ------- ------------------ ------------------ ---------------- Earnings per share (pence) Basic 4 1.6 2.6 4.4 Diluted 4 1.6 2.6 4.4 ------------------------------------ ------- ------------------ ------------------ ----------------
All amounts relate to continuing operations. There was no other comprehensive income in either the current or preceding Period.
Condensed consolidated statement of financial position
As at As at As at 31 Oct 31 Oct 30 Apr 2023 (unaudited) 2022 (unaudited) 2023 (audited) GBP'000 GBP'000 GBP'000 ------------------------------- ------------------- ------------------- ----------------- Non-current assets Property, plant and equipment 41,821 40,149 41,917 Investment property - 806 - Intangible assets 3,638 3,787 3,713 ------------------------------- ------------------- ------------------- ----------------- 45,459 44,742 45,630 ------------------------------- ------------------- ------------------- ----------------- Current assets Inventories 4,929 4,091 4,971 Trade and other receivables 29,909 43,181 35,544 Cash and cash equivalents 9,047 8,443 8,885 43,885 55,715 49,400 ------------------------------- ------------------- ------------------- ----------------- Total assets 89,344 100,457 95,030 ------------------------------- ------------------- ------------------- ----------------- Current liabilities Trade and other payables 18,178 27,636 23,245 Loans and borrowings - 3,000 - Deferred consideration - - 790 Lease liabilities 2,476 2,159 2,339 Provisions 8,238 8,047 8,143 28,892 40,842 34,517 ------------------------------- ------------------- ------------------- ----------------- Non-current liabilities Deferred consideration - 1,193 - Lease liabilities 4,654 5,798 6,179 Deferred tax 4,801 4,139 4,303 9,455 11,130 10,482 ------------------------------- ------------------- ------------------- ----------------- Total liabilities 38,347 51,972 44,999
------------------------------- ------------------- ------------------- ----------------- Net assets 50,997 48,485 50,031 ------------------------------- ------------------- ------------------- ----------------- Equity Share capital 2,133 2,133 2,133 Share premium 8,633 8,633 8,633 Other reserve 5,807 5,807 5,807 Retained earnings 34,424 31,912 33,458 Total equity 50,997 48,485 50,031 ------------------------------- ------------------- ------------------- -----------------
Condensed consolidated statement of cash flows
6 months 6 months 12 months to 31 Oct to to 30 Apr 2023 (unaudited) 31 Oct 2023 (audited) GBP'000 2022 (unaudited) GBP'000 GBP'000 ----------------------------------------- ------------------ ------------------ ---------------- Cash flows from operating activities Operating profit 2,663 3,485 5,858 Depreciation of property, plant and equipment 3,498 2,845 5,984 Amortisation of intangible assets 74 58 134 Depreciation of investment property - 5 9 (Profit)/loss on disposal of property, plant and equipment (108) (96) (310) Share-based payment expense 134 121 171 ----------------------------------------- ------------------ ------------------ ---------------- Operating cash flows before movement in working capital 6,261 6,418 11,846 Decrease in inventories 42 (318) (1,200) Decrease in trade and other receivables 5,635 (9,068) (1,434) Decrease in trade and other payables (5,067) 5,185 344 Increase in provisions 95 310 405 ----------------------------------------- ------------------ ------------------ ---------------- Cash generated from operations 6,966 2,527 9,961 Income tax (paid)/received (302) 322 323 ----------------------------------------- ------------------ ------------------ ---------------- Net cash generated from operating activities 6,664 2,849 10,284 ----------------------------------------- ------------------ ------------------ ---------------- Cash flows from investing activities Purchases of property, plant and equipment (3,914) (3,745) (6,167) Disposal of property, plant and equipment 1,369 197 615 Deferred consideration for acquisition of subsidiary (740) (50) (50) Net cash absorbed in investing activities (3,285) (3,598) (5,602) ----------------------------------------- ------------------ ------------------ ---------------- Cash flows from financing activities New hire purchase financing - 1,544 1,544 New loans and borrowings - 3,000 3,000 Repayment of bank borrowings - - (3,000) Principal paid on lease liabilities (2,189) (1,072) (2,394) Interest paid on lease liabilities (76) (179) (388) Interest paid on loans and borrowings (102) (21) (53) Interest received 3 - - Dividends paid (853) (1,067) (1,493) Net cash absorbed in financing activities (3,217) 2,205 (2,784) ----------------------------------------- ------------------ ------------------ ---------------- Net increase/(decrease) in cash and cash equivalents 162 1,456 1,898 Cash and cash equivalents at beginning of year 8,885 6,987 6,987 Cash and cash equivalents at end of year 9,047 8,443 8,885 ----------------------------------------- ------------------ ------------------ ----------------
Condensed consolidated statement of changes in equity
Share Share Other Retained Total Capital premium reserve earnings equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 -------------------------- --------- --------- --------- ----------- --------- Balance at 1 May 2022 2,133 8,633 5,807 30,038 46,611 (audited) -------------------------- --------- --------- --------- ----------- --------- Total comprehensive income - - - 2,820 2,820 Share-based payment expense - - - 121 121 Dividends paid - - - (1,067) (1,067) Balance at 31 October 2022 2,133 8,633 5,807 31,912 48,485 (unaudited) -------------------------- --------- --------- --------- ----------- --------- Total comprehensive income - - - 1,858 1,858 Share-based payment expense - - - 50 50 Dividends paid - - - (426) (426) Deferred tax credit on share based payments - - - 64 64 Balance at 30 April 2023 2,133 8,633 5,807 33,458 50,031 (audited) -------------------------- --------- --------- --------- ----------- --------- Total comprehensive income - - - 1,675 1,675 Share-based payment expense - - - 134 134 Dividends paid - - - (853) (853) Deferred tax credit on share based payments - - - 10 10 Balance at 31 October 2023 2,133 8,633 5,807 34,424 50,997 (unaudited) -------------------------- --------- --------- --------- ----------- ---------
Notes to the condensed consolidated interim financial statements
For the six months ended 31 October 2023
1. Basis of preparation
The unaudited interim consolidated statement of Van Elle Holdings plc is for the six months ended 31 October 2023 and does not comprise statutory accounts within the meaning of section 435 of the Companies Act 2006.
These condensed consolidated financial statements have been prepared in compliance with the recognition and measurement requirement of International Accounting Standards in conformity with the requirements of the Companies Act 2006. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the Group's annual report. The unaudited interim consolidated statement has been prepared in accordance with the accounting policies that are expected to be applied in the report and accounts for the year ending 30 April 2024.
The comparative figures for the year ended 30 April 2023 do not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006, but they have been derived from the audited financial statements for that year, which have been filed with the Registrar of Companies. The report of the auditors was unqualified and did not contain statements under section 498 (2) or (3) of the Companies Act 2006 nor a reference to any matters which the auditor drew attention by way of emphasis of matter without qualifying their report.
Going Concern
As part of the going concern assessment for the year ended 30 April 2023 detailed forecasts were prepared. These forecasts demonstrated a healthy cash flow and headroom across the period to 31 July 2024. Reverse stress testing was also carried out and the scenarios in which cash resources were exhausted and further debt facilities were required were considered remote.
Strong activity levels seen throughout FY2023 continued into Q1 of FY2024 and whilst market conditions have been more challenging from Q2 onwards, the Board remains confident in achieving market expectations for the current financial year. The Group's order book has also grown in the period since 30 April 2023.
A strong cash balance of GBP9.0m remains at the end of the period. The Group's net funds position (excluding IFRS 16 property and vehicle lease liabilities) of GBP8.9m has increased by GBP1.4m during the period. The Group's GBP11m asset backed lending facility remains undrawn at the end of the period having not been drawn during the 6 months to 31 October 2023. Total hire purchase finance at the end of the period was only GBP0.1m.
As part of the interim going concern assessment, forecasts for the 12 months ending January 2025 have been prepared which demonstrate that the Group is able to operate within its existing facilities and meet obligations as they fall due.
On this basis the Board consider the Group to have adequate resources to continue its operations for the foreseeable future. Accordingly, the Board continue to adopt the going concern basis in preparing the interim financial statements.
Accounting Policies
The accounting policies adopted in the preparation of the unaudited Group interim consolidated statement to 31 October 2023 are consistent with the policies applied by the Group in its consolidated financial statements as at, and for the year ended 30 April 2023.
Functional currency
The unaudited interim consolidated statements are presented in Sterling, which is also the Group's functional currency. Amounts are rounded to the nearest thousand, unless otherwise stated.
2. Segment information
The Group evaluates segmental performance based on profit or loss from operations calculated in accordance with IFRS but excluding non-underlying items. 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. Head office central services costs including insurances are allocated to the segments based on levels of turnover.
Operating segments - 6 months to 31 October 2023
Specialist Ground General Piling Engineering Head Piling & Rail Services Office Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------------------- --------- ----------- ------------- --------- --------- Revenue 25,372 20,333 22,058 447 68,210 ----------------------------- --------- ----------- ------------- --------- --------- Other operating income - - - 859 859 ----------------------------- --------- ----------- ------------- --------- --------- Operating profit 1,816 486 1,761 (1,400) 2,663 Finance expense - - - - - Profit before tax 1,816 486 1,761 (1,400) 2,663 ----------------------------- --------- ----------- ------------- --------- --------- Assets Property, plant and equipment (including right of use assets) 8,937 13,777 7,548 11,559 41,821 Intangible assets 7 3,422 209 - 3,638 Inventories 1,898 759 2,233 39 4,929 ----------------------------- --------- ----------- ------------- --------- --------- Reportable segment assets 10,842 17,958 9,990 11,598 50,388 Trade and other receivables - - - 29,909 29,909 Cash and cash equivalents - - - 9,047 9,047 Total assets 10,842 17,958 9,990 50,554 89,344 ----------------------------- --------- ----------- ------------- --------- --------- Liabilities Trade and other payables - - - 18,178 18,178 Provisions - - - 8,238 8,238 Lease liabilities - - - 7,130 7,130 Deferred tax - - - 4,801 4,801 Total liabilities - - - 38,347 38,347 ----------------------------- --------- ----------- ------------- --------- --------- Other information Capital expenditure 855 590 184 2,285 3,914 Depreciation 816 1,331 816 535 3,498 ----------------------------- --------- ----------- ------------- --------- ---------
The Group had one customer with revenues greater that 10% in the current period (2022: none). Total revenues with the customer were GBP7.4m and these are reported within the General Piling operating segment.
Geographical segments - 6 months to 31 October 2023
Revenue and operating profit from external customers, and the carrying amount of non-current assets by geographical segment are shown below:
Other UK countries Total GBP'000 GBP'000 GBP'000 ------------------------- --------- ----------- --------- Revenue 68,180 30 68,210 ------------------------- --------- ----------- --------- Operating profit/(loss) 3,304 (641) 2,663 ------------------------- --------- ----------- --------- Non-current assets 44,287 1,172 45,459 ------------------------- --------- ----------- ---------
Operating segments - 6 months to 31 October 2022
Specialist Ground General Piling Engineering Head Piling & Rail Services Office Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------------------- --------- ----------- ------------- --------- --------- Revenue 29,308 24,806 26,552 170 80,836 ----------------------------- --------- ----------- ------------- --------- --------- Other operating income - - - 169 169 ----------------------------- --------- ----------- ------------- --------- --------- Operating profit 2,325 1,102 2,541 (2,483) 3,485 Finance expense - - - (200) (200) Profit before tax 2,325 1,102 2,541 (2,683) 3,285 ----------------------------- --------- ----------- ------------- --------- --------- Assets Property, plant and equipment (including right of use assets) 9,166 13,988 7,967 9,028 40,149 Intangible assets 15 3,543 229 - 3,787 Inventories 1,319 781 1,913 78 4,091 ----------------------------- --------- ----------- ------------- --------- --------- Reportable segment assets 10,500 18,312 10,109 9,106 48,027 Investment property - - - 806 806 Trade and other receivables - - - 43,181 43,181 Cash and cash equivalents - - - 8,443 8,443 Total assets 10,500 18,312 10,109 61,536 100,457 ----------------------------- --------- ----------- ------------- --------- --------- Liabilities Trade and other payables - - - 27,636 27,636 Provisions - - - 8,047 8,047 Loans & borrowings - - - 3,000 3,000 Deferred consideration - - - 1,193 1,193 Lease liabilities - - - 7,957 7,957 Deferred tax - - - 4,139 4,139 Total liabilities - - - 51,972 51,972 ----------------------------- --------- ----------- ------------- --------- --------- Other information Capital expenditure 459 2,430 197 659 3,745 Depreciation 675 1,110 689 434 2,908 ----------------------------- --------- ----------- ------------- --------- ---------
There are no individual customers accounting for more than 10% of Group revenue in either the current or preceding period.
Geographical segments - 6 months to 31 October 2022
Revenue and operating profit from external customers, and the carrying amount of non-current assets by geographical segment are shown below:
Other UK countries Total GBP'000 GBP'000 GBP'000 -------------------- --------- ----------- --------- Revenue 80,836 - 80,836 -------------------- --------- ----------- --------- Operating profit 3,485 - 3,485 -------------------- --------- ----------- --------- Non-current assets 44,742 - 44,472 -------------------- --------- ----------- ---------
Operating segments - 12 months to 30 April 2023
Specialist Ground General Piling Engineering Head Piling & Rail Services Office Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------------------- --------- ----------- ------------- --------- --------- Revenue 54,838 46,593 47,067 236 148,734 ----------------------------- --------- ----------- ------------- --------- --------- Other operating income - - - 904 904 ----------------------------- --------- ----------- ------------- --------- --------- Operating profit 3,403 2,236 3,642 (3,423) 5,858 Finance expense - - - (487) (487) Profit before tax 3,403 2,236 3,642 (3,910) 5,371 ----------------------------- --------- ----------- ------------- --------- --------- Assets Property, plant and equipment (including right of use assets) 9,090 14,411 8,005 10,411 41,917 Intangible assets 11 3,483 219 - 3,713 Inventories 1,858 727 1,902 484 4,971 ----------------------------- --------- ----------- ------------- --------- --------- Reportable segment assets 10,959 18,621 10,126 10,895 50,601 Trade and other receivables - - - 35,544 35,544 Cash and cash equivalents - - - 8,885 8,885 Total assets 10,959 18,621 10,126 55,324 95,030 ----------------------------- --------- ----------- ------------- --------- --------- Liabilities Trade and other payables - - - 23,245 23,245 Provisions - - - 8,143 8,143 Deferred consideration - - - 790 790 Lease liabilities - - - 8,518 8,518 Deferred tax - - - 4,303 4,303 Total liabilities - - - 44,999 44,999 ----------------------------- --------- ----------- ------------- --------- --------- Other information Capital expenditure 1,171 4,188 1,351 1,977 8,687 Depreciation 1,422 2,262 1,421 879 5,984 ----------------------------- --------- ----------- ------------- --------- ---------
The Group had one customer with revenues greater that 10% in the current year (2022: none). Total revenues with the customer were GBP18.4m and these are reported within the General Piling operating segment.
Geographical segments - 12 months to 30 April 2023
Revenue and operating profit from external customers, and the carrying amount of non-current assets by geographical segment are shown below:
Other UK countries Total GBP'000 GBP'000 GBP'000 -------------------- --------- ----------- --------- Revenue 148,734 - 148,734 -------------------- --------- ----------- --------- Operating profit 5,858 - 5,858 -------------------- --------- ----------- --------- Non-current assets 45,630 - 54,630 -------------------- --------- ----------- --------- 3. Revenue from contracts with customers
Disaggregation of revenue - 6 months to 31 October 2023
Specialist Ground General Piling Engineering Head Piling & Rail Services Office Total End market GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------------- --------- ----------- ------------- --------- --------- Residential 9,304 2,289 17,744 - 29,337 Infrastructure 10,076 15,486 3,126 - 28,688 Regional construction 5,907 2,558 1,185 - 9,650 Other 85 - 3 447 535 ----------------------- --------- ----------- ------------- --------- --------- Total 25,372 20,333 22,058 447 68,210 ----------------------- --------- ----------- ------------- --------- ---------
Disaggregation of revenue - 6 months to 31 October 2022
Specialist Ground General Piling Engineering Head Piling & Rail Services Office Total End market GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------------- --------- ----------- ------------- --------- --------- Residential 6,880 2,334 21,643 - 30,857 Infrastructure 9,166 20,337 2,095 - 31,598 Regional construction 13,222 2,100 2,772 - 18,094 Other 40 35 42 170 287 ----------------------- --------- ----------- ------------- --------- --------- Total 29,308 24,806 26,552 170 80,836 ----------------------- --------- ----------- ------------- --------- ---------
Disaggregation of revenue - 12 months to 30 April 2023
Specialist Ground General Piling Engineering Head Piling & Rail Services Office Total End market GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------------- --------- ----------- ------------- --------- --------- Residential 13,924 4,840 38,096 - 56,860 Infrastructure 20,761 37,180 4,651 - 62,592 Regional construction 20,147 4,507 4,289 - 28,943 Other 6 66 31 236 339 ----------------------- --------- ----------- ------------- --------- --------- Total 54,838 46,593 47,067 236 148,734 ----------------------- --------- ----------- ------------- --------- ---------
Contract assets
6 months 6 months 12 months to to to 31 Oct 31 Oct 30 Apr 2023 2022 2023 (unaudited) (unaudited) (audited) GBP'000 GBP'000 GBP'000 ------------------------------------ --------------- -------------- ------------ As at 1 May 4,913 2,163 2,163 Transfers from contract assets to trade receivables (4,913) (2,163) (1,943) Excess of revenue recognised over invoiced 3,296 3,347 4,913 Impairment of contract assets - - (220) ------------------------------------ --------------- -------------- ------------ As at 31 October / 30 April 3,296 3,347 4,913 ------------------------------------ --------------- -------------- ------------
Contract liabilities
6 months 6 months 12 months to to to 30 Apr 31 Oct 31 Oct 2023 (audited) 2023 (unaudited) 2022 (unaudited) GBP'000 GBP'000 GBP'000 ---------------------------------- ------------------ ------------------ ---------------- As at 1 May 447 388 388 Interest on contract liabilities - - - Contract liabilities recognised as revenue in the period (247) (188) (188) Deposits received in advance of performance 534 247 1,787 As at 31 October / 30 April 734 447 1,987 ---------------------------------- ------------------ ------------------ ---------------- 4. Earnings per share
The calculation of basic and diluted earnings per share is based on the following data:
6 months 6 months 12 months to to to 30 Apr 31 Oct 31 Oct 2023 (audited) 2023 (unaudited) 2022 (unaudited) ---------------------------------- ------------------ ------------------ ---------------- Basic weighted average number of shares 106,667 106,667 106,667 Dilutive weighted average shares from share options 210 - 473 ---------------------------------- ------------------ ------------------ ---------------- Diluted weighted average number of shares 106,877 106,667 107,140 ---------------------------------- ------------------ ------------------ ---------------- GBP'000 GBP'000 GBP'000 ---------------------------------- ------------------ ------------------ ---------------- Profit for the period 1,675 2,820 4,678 ---------------------------------- ------------------ ------------------ ---------------- Pence Pence Pence ---------------------------------- ------------------ ------------------ ---------------- Earnings per share Basic 1.6 2.6 4.4 Diluted 1.6 2.6 4.4 ---------------------------------- ------------------ ------------------ ----------------
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders and on 106,666,650 ordinary shares being the weighted average number of ordinary shares in issue during the period.
The dilutive shares represent share options exercisable under Group's LTIP scheme that vested on 30 September 2023 and which have not been exercised at 31 October 2023.
5. Dividends paid 6 months 6 months 12 months to to to 31 Oct 31 Oct 30 Apr 2023 2022 2023 (unaudited) (unaudited) (audited) GBP'000 GBP'000 GBP'000 ---------------------------------------- --------------- -------------- ------------ Amounts recognised as distributions to equity holders during the Period: Final dividend for the year ended 30 April 2022 of 1.0p per share - 1,067 1,067 Interim dividend for the year ended 30 April 2023 of 0.4p per share - - 426 Final dividend for the year ended 853 - - 30 April 2023 of 0.8p per share Total 853 1,067 1,493 ---------------------------------------- --------------- -------------- ------------ 6. Analysis of cash and cash equivalents and reconciliation to net (debt) / funds As at As at As at 31 Oct 31 Oct 30 Apr 2023 (unaudited) 2022 (unaudited) 2023 GBP'000 GBP'000 (audited) GBP'000 ---------------------------------- ------------------- ------------------- ----------- Cash at bank 9,039 8,403 8,847 Cash in hand 8 40 38 ---------------------------------- ------------------- ------------------- ----------- Cash and cash equivalents 9,047 8,443 8,885 Loans and borrowings - (3,000) - Lease liabilities (7,130) (7,957) (8,518) ---------------------------------- ------------------- ------------------- ----------- Net funds / (debt) 1,917 (2,514) 367 ---------------------------------- ------------------- ------------------- ----------- Net funds excl. IFRS 16 property and vehicle lease liabilities 8,926 3,476 7,526 ---------------------------------- ------------------- ------------------- -----------
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