Van Elle Holdings (LON:VANL)
Market Cap £72.8 million
Share Price 91p (Down 23p or 20.2% today)
Bid/Offer 90p - 92p Normal Market Size 2,500
About the company
The company listed on AIM in October 2016 and raised net proceeds of £7.4 million leaving the company with net debt of £4.1 million. 30 of the 40 million shares sold at 100p in the IPO were sold by existing shareholders.
Van Elle has been around for 32 years and is the UK's largest piling and ground stabilisation contractor. The company can be split into 4 divisions (all figures are estimates)
General Piling. This division by turnover represents approximately 50% of turnover with divisional operating net margins of 12%. This division works on having a large number of contracts across the housing and commercial sector
Specialist Piling: Second largest division of approximately 25%. The division is currently suffering from lower level of sales activity on track rail and the necessary investment in overheads. Net operational division margin is 12.7%. Gross margin for this division is over 45%.
Ground Engineering Services: Makes up 1/8th of total turnover with net divisional margins of 6% due in part to start up operations.
Ground Engineering Products: Another small division making up another 1/8th of turnover. Divisional margin profit percentage is 9%. The Group's Smartfoot® modular foundation product is showing good growth in demand.
Today's Trading Statement
As indicated at the time of the Company's interim results on 19 January 2017, there were a number of contracts within the Specialist Piling division expected to be confirmed and commenced in the second half, particularly in the division's on-track rail business.
The Company now anticipates the start date for several of these contracts will be delayed beyond the end of the current financial year and, in a small number of cases, the expected call-off schedule and distribution of work packages may be revised. Whilst Van Elle still expects to deliver a number of these contracts on revised time schedules, the Group will not receive the previously expected contribution from them in the current financial year.
As a result, the Board now expects to deliver full year revenue of approximately £93 million, some five per cent. below its previous expectations, with the Group's underlying operating margin slightly reduced as a result of the adverse mix impact. Cash generation in the…
