REG - Van Elle HoldingsPLC - Final Results, Analyst Briefing & Investor Pres
24/07/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240724:nRSX5538Xa&default-theme=true
RNS Number : 5538X Van Elle Holdings PLC 24 July 2024
24 July 2024
Van Elle Holdings plc
('Van Elle', the 'Company' or the 'Group')
Results for the year ended 30 April 2024
Analyst Briefing & Investor Presentation
'Resilient FY2024 performance; well positioned in structural growth markets'
Van Elle Holdings plc, the UK's largest ground engineering contractor,
announces its results for the year ended 30 April 2024 ('FY2024').
£m Year ended Year ended
30 April 2024 30 April 2023
Revenue 139.5 148.7
Underlying EBITDA(1) 13.1 11.9
Underlying operating profit 5.5 5.8
Underlying operating profit margin 3.9% 3.9%
Operating profit 5.8 5.9
Underlying profit before taxation 5.1 5.3
Profit before taxation 5.6 5.4
Underlying basic earnings per share 3.5p 4.4p
Basic earnings per share 3.9p 4.4p
Net funds excl. IFRS 16 property and vehicle lease liabilities(2) 5.5 7.5
Net funds / (debt) (1.6) 0.4
Underlying return on capital employed 10.5% 12.2%
Total dividend for the year 1.2p 1.2p
1. EBITDA is defined as earnings before interest, tax, amortisation
and depreciation.
2. IFRS 16 property and vehicle lease liabilities as at 30 April 2024
were £7.1m (30 April 2023: £7.2m).
Highlights:
· Revenue in line with expectations, 6% below the prior year,
against a strong comparative (12% lower on a like-for-like basis).
· Resilient performance delivering an underlying operating margin
of 3.9%, consistent with FY2023, despite challenging market conditions.
· Acquisition of Rock & Alluvium in November 2023 which
established a stronger presence in London and the South East and has traded in
line with the pre-acquisition plan.
· Impact of a softer housing market partially mitigated by the
Group's diverse customer base including partnership and affordable housing
customers.
· Good progress in developing closer customer relationships in the
energy and water sectors.
· Establishment and commencement of trading of the Canadian rail
subsidiary.
· Strong balance sheet maintained with an undrawn bank facility of
up to £11.0m, providing capacity to fund bolt-on M&A and organic growth
investment.
· Capital investment of £5.5m (excluding IFRS 16 leases) in the
year, including expanding the capacity of the precast pile factory, and £2.9m
of plant and equipment added as part of the Rock & Alluvium acquisition.
· Proposed final dividend of 0.8 pence per share to deliver full
year dividends of 1.2p (FY2023: 1.2p).
Current trading and outlook
· Market conditions are expected to remain challenging throughout
the remainder of calendar year 2024.
· Despite housebuilding volumes being anticipated to remain subdued
in the immediate future, orders in Housing post year end are over 30% higher
when compared to the equivalent prior year period.
· Strong customer relationships, national frameworks and
significant investment programmes in UK and Canada infrastructure underpin the
Board's confidence of medium-term growth.
· A broad range of capabilities and diverse exposure to multiple
sectors, positions the Group well to benefit from improvements in the market.
· FY2025 will see the Group make further progress against its
strategy and strategic financial targets.
· In Q1 FY2025 the Group acquired certain assets from Fussey Piling
Ltd, strengthening its sheet piling and ground improvement capability.
· Order book at 30 April 2024 of £35.1m (£30.8m at 30 April 2023)
excluding framework agreements and preferred bidder positions (estimated
annual revenues of £30m-£40m subject to timing and allocation of workload).
Mark Cutler, Chief Executive, commented:
"Van Elle delivered a resilient performance in the year, benefitting from the
breadth of its capabilities and end markets, despite very challenging market
conditions across most sectors.
"The Group has continued to expand its offering, grow geographically and enter
new sectors, through the acquisition of Rock & Alluvium, its strategy for
the water and energy sectors, and the establishment of rail operations in
Canada.
"We start the new financial year with a strong order book and multiple
framework agreements. Our focus on key customer partnerships and strategic
markets is expected to deliver significant growth opportunities over the
medium term."
Analyst Briefing: 10.00am on Wednesday 24 July 2024
A briefing for Analysts will be held at 10.00am this morning - Wednesday 24
July 2024. Analysts interested in attending should contact Walbrook PR on
vanelle@walbrookpr.com (mailto:vanelle@walbrookpr.com) or 020 7933 8780.
Investor Presentation: 3.30pm on Wednesday 24 July 2024
Mark Cutler, Chief Executive Officer, and Graeme Campbell, Chief Financial
Officer, will hold a presentation to review the results and update its growth
strategy at 3.30pm on Wednesday 24 July 2024, 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
(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 (mailto: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 broker) Tel: 020 7418 8900
Ed Allsopp
Charlotte Sutcliffe
Tom Graham
Walbrook PR Limited Tel: 020 7933 8780 or vanelle@walbrookpr.com
Tom Cooper 07971 221 972 or 07748 325 236
Nick Rome
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. The Company acquired ScrewFast Foundations Limited in
April 2021 and Rock & Alluvium Limited in November 2023.
CHAIRMAN'S STATEMENT
Overview
I am pleased to report that the Group has delivered another strong financial
performance, building on the progress achieved in recent years. As expected,
the UK market conditions proved to be challenging for most of the year,
particularly in the housing and infrastructure sectors, but the Group
responded well to deliver underlying profit in line with market forecasts. We
have benefited from strong customer relationships across a broad range of
end-markets in the UK construction sector, and this has provided resilience to
the softer market conditions.
The housing sector delivered very strong revenues during the first quarter of
the financial year but has since been impacted by lower volumes on new-build
housing starts. Strong relationships with housebuilders in the social housing
sector has reduced the impact from market factors, and this has partially
mitigated the lower volumes seen across the sector as a whole.
In the construction sector, a strong demand for logistics warehousing and data
centres has helped to mitigate uncertainty in the regional commercial markets,
albeit we experienced early signs of recovery in London for which we are well
positioned to benefit following the acquisition of Rock & Alluvium Limited
("Rock & Alluvium") from Galliford Try in November 2023.
In the infrastructure sector, highways and rail activity levels were lower due
to the cyclical nature of infrastructure spending. The transition between CP6
and CP7 resulted in a drop off in volumes for the wider supply chain, but the
Group remains set to benefit from the increased investment priorities of CP7,
new frameworks and deeper customer relationships.
The Group has developed strong positions in the water and energy sectors where
there is a clear pipeline of large-scale, essential investment across the UK,
which is expected to contribute materially to our activity levels from FY26
and beyond.
Despite some short-term volatility in market conditions, we continue to see
strong levels of demand for the Group's services and remain confident that our
end markets are attractive, particularly with an anticipated recovery in the
housing sector and significant future investment expected in UK
infrastructure.
Capital structure and allocation
The Group maintains a strong balance sheet with a healthy cash position, low
debt and flexibility provided by a borrowing facility of up to £11.0m.
As part of the acquisition of Rock & Alluvium, three piling rig finance
lease contracts were transferred to Van Elle. Total debt (excluding IFRS 16
lease liabilities), including these contracts was £0.5m at the year end.
The Group's borrowing facility is provided on a revolving basis, secured
against receivables and certain tangible assets, and was not drawn during the
financial year. The facility was extended in September 2023 for a further
three years and now expires in September 2026.
Net funds, excluding IFRS 16 property and vehicle lease liabilities, decreased
to £5.5m at 30 April 2024 (30 April 2023: £7.5m). This reduction in net
funds reflects £3.6m of net capital expenditure (after disposals), £2.5m of
consideration for acquisitions, £1.3m in dividends and an increase in working
capital as a result of higher activity levels in the final quarter of the
financial year.
We operate 132 rigs and continue to allocate capital across all divisions, to
ensure we maintain a market-leading fleet of plant and machinery. Total
capital expenditure was £5.5m in the year, a slight reduction over the prior
year. We continually review our existing fleet and dispose of ageing assets,
particularly those with low utilisation.
The Board continues to be disciplined in reviewing potential bolt-on
acquisitions of established businesses, which would be earnings accretive and
augment and strengthen the Group's offering.
Dividend
The Board recognises the importance of maintaining a sustainable dividend
distribution. A prudent approach has been taken in recent years reflecting the
significant future opportunities for growth, which will require capital
investment.
Following another year of profitable performance, a strong balance sheet and a
healthy cash position, the Board is pleased to recommend the payment of a
final dividend of 0.8p per share (FY2023: 0.8p per share). If approved, the
proposed FY2024 will be paid on 18 October 2024 to shareholders on the
register as at the close of business on 4 October 2024. The shares will be
marked ex-dividend on 3 October 2024.
An interim dividend of 0.4p per share (FY2023 interim dividend: 0.4p per
share) was paid on 15 March 2024. The total dividend payable for FY2024 will
therefore be 1.2p (FY2023: 1.2p).
ESG and our people
We are committed to reducing the impact of our activities on the environment
and our carbon footprint as we make the journey towards net zero emissions. I
am pleased to report that we have made good progress this year via the Group's
Sustainability Working Group which has representation from across the
business. We have signed up to the Science Based Targets initiative (SBTi) and
have developed a carbon reduction roadmap which we are using to track
progress.
At Van Elle, our people engage across local communities, contributing to
social value initiatives local to our head office, as well as supporting
several customer projects.
Our people are our strongest asset, and I am proud of our collective
achievements in the past year. Their health, safety and well-being is our main
priority. We have made excellent progress on improving our safety performance
during the year. The RIDDOR Accident Frequency Rate (AFR) improved from 0.19
in FY2023 to zero in FY2024.
On behalf of the Board, I would like to thank all our employees for their hard
work and commitment over the past year.
Board and governance
The Board's composition is reviewed regularly to ensure that we continue to
have an appropriate mix of expertise and experience within the Board. There
were no changes to the Board in the current year, which has provided a stable
platform as we continue to deliver the Group's strategy.
During the year, we completed a comprehensive internal review of the Board's
structure and performance, and an action plan is in progress to ensure
continuous improvement of the Board's effectiveness.
I would like to extend my thanks to my Board colleagues for their significant
contribution and commitment over the past year.
The Group is committed to the highest standards of corporate governance and
prioritises effective shareholder communication and engagement. We have
continued to adopt the Quoted Companies Alliance Corporate Governance Code,
complemented with other suitable governance measures appropriate for a company
of our size.
Outlook
The Board expects the current challenging market conditions to continue
throughout the remainder of calendar year 2024, particularly in the housing
and infrastructure sectors. However, the Group's broad range of capability and
diverse exposure to multiple sectors, provides strong resilience against
macroeconomic factors and means Van Elle is well-placed to benefit from
improvements in the market.
Despite the expectation that the first half of FY2025 is likely to be impacted
by the softer market, all the Group's end markets are expected to recover in
the near term and, combined with strong positions being developed in the water
and energy sectors and a fast-growing rail business in Canada, the Board
expects there to be significant opportunity for growth in the medium-term.
We remain confident of delivering our medium-term financial targets of 5-10%
annual revenue growth, 6-7% operating profit margin and 15-20% ROCE.
Frank Nelson
Non-Executive Chair
23 July 2024
CHIEF EXECUTIVE'S STATEMENT
OPERATING REVIEW
Full year expectations achieved
The Group delivered another resilient performance in FY2024, despite
challenging market conditions across most sectors. As expected, revenue was
6.2% below the prior year at £139.5m (FY2023: £148.7m). On a like-for-like
basis, excluding the impact of Rock & Alluvium, which was acquired on 30
November 2023, revenues decreased by 11.7%.
Notwithstanding these challenging market conditions, the Group delivered a
robust performance, in line with expectations, with underlying profit before
tax of £5.1m (FY2023: £5.3m). Underlying operating margin also remained
stable at 3.9% (FY2023: 3.9%).
The housing market delivered very strong revenues in the first quarter of the
financial year, but activity levels reduced materially over the remainder of
the year, in line with the lower new build volumes widely reported by major
housebuilders. Our diverse customer base, with additional exposure to
partnership and affordable housing customers, partially mitigated this impact,
where volumes were affected to a lesser extent.
In infrastructure, the Group has made excellent progress in developing closer
customer relationships and strengthened market positions in all segments, but
market challenges persisted throughout the year from a combination of budget
and inflationary pressures, project delays and transition between investment
cycles. A strong pipeline of opportunities has been developed in the energy
and water sectors, where there is a clear pipeline of planned investment.
These sectors are expected to contribute materially to Group performance in
the medium term. Both rail and highways sectors reported lower activity levels
during the year. Rail was impacted by lower spending during the final year of
Network Rail's CP6 investment period. Highways revenues were also reduced,
impacted by the cancellation of further Smart Motorways projects, other
project cancellations and delays in regional delivery programmes.
Costs associated with establishing the Group's Canadian rail subsidiary have
been absorbed in the year and activity levels are now increasing to
sustainable levels, despite delays to the major Metrolinx GO Expansion
programme in Toronto, for which we are now preferred bidder for the
foundations strategic partner role, covering design development and early
works ahead of main construction starting in FY26.
In the regional construction sector market, conditions were also challenging,
with developer confidence affected by build cost inflation. The Group
completed several important schemes in the growing segments of data centres
and industrials. Commercial schemes have suffered delays in most regions. In
London, progress has been impacted by the new Building Safety Act which
requires more rigorous design and planning conditions for buildings over 18
stories, albeit the initial backlog will ease during FY2025. In November 2023,
the Group acquired Rock & Alluvium Limited from Galliford Try Holdings
plc., which has provided an established presence in London and the South East.
Trading under the wider Galliford Try trading agreement is in line with
expectations.
We continue to focus on efficiency projects both to improve operational
effectiveness and to leverage the Group's IT infrastructure and systems.
Further cost saving initiatives have also been identified, which are being
delivered as part of our drive for continuous improvement.
Strong balance sheet
The Group maintained a strong balance sheet with a healthy cash balance, low
debt and significant liquidity headroom against its undrawn £11.0m funding
facility. The facility term was extended during the year and now expires in
September 2026.
The Group assumed three small lease liabilities over rigs as part of the
acquisition of Rock & Alluvium Limited, but Group debt remains well within
our target leverage threshold of less than 1.5 times EBITDA. Total debt
(excluding IFRS 16 lease liabilities) was £0.5m at the year-end (30 April
2023: £1.4m).
Net funds, excluding IFRS 16 property and vehicle lease liabilities, decreased
to £5.5m at 30 April 2024 (30 April 2023: £7.5m). This reduction in net
funds reflects £3.6m of net capital expenditure (after disposals), £2.5m of
consideration for acquisitions, £1.3m in dividends and an increase in working
capital as a result of higher activity levels in the final quarter of the
financial year.
Health and safety
The health, safety and well-being of our employees is our first priority. We
have made excellent progress during the year with significantly improved
internal communication and reporting, which is driving a stronger safety
culture in the business.
A health and safety survey was conducted during the year with strong levels of
engagement across the workforce. The survey responses are being used to drive
an action plan for further improvement.
We have built on the progress made in the prior year on the Group's upgraded
Integrated Management System, which now captures all operational processes and
procedures. These have been briefed out to all employees to embed best
practices and improved consistency.
Our safety record improved again in the year, with a RIDDOR Accident Frequency
Rate (AFR) per 100,000 hours worked of zero in FY2024 (FY2023: 0.19).
People
The Group continued to develop its workforce and core management capabilities,
with new development programmes in place for supervisors and management. Our
in-house training centre coordinated and delivered all the Group's training
needs, delivering a high level of internal training days, broadly consistent
with the prior year. Group average headcount was stable throughout the year at
639, assisted by reduced resource demand on HS2. Voluntary churn was lower at
14% (FY2023: 18%).
During the year some restructuring was undertaken to improve the efficiency of
the operating business units, reduce duplicated processes and roles and to
improve collaboration. As part of these changes Malcolm O'Sullivan was
appointed as Chief Operating Officer and several other internal promotions
were implemented.
Strategy
The Group made further progress in the year, with continued focus on the final
phase of our strategic plan to deliver market leading performance. The medium
term financial KPIs (annual revenue growth of 5-10%, underlying operating
margins of 6-7%, ROCE of 15-20% and leverage of less than 1.5 times EBITDA)
remain the Group's objectives.
Strategic highlights in the year include:
- As the pipeline of investment under the UK energy sector's
Accelerated Strategic Transmission Investment (ASTI) programme becomes
clearer, we have developed strong customer partnerships for delivery of future
works. Significant investment is expected in the UK high-voltage power network
over the medium to long term and our breadth of capability puts the Group in a
very strong position to be able to support major project activity.
- The acquisition of Rock & Alluvium from Galliford Try Holdings
plc was completed to provide wider growth opportunities for the Group in
London and the South East. The integration of Rock & Alluvium has
progressed in line with expectations and the business traded profitably in the
final quarter of the year.
- A five-year trading agreement with Galliford Try was entered into,
under which Van Elle has started to provide piling and geotechnical services.
- The Group was awarded new framework agreements including Network
Rail's southern region CP7 civils programme and with the Coal Authority for
national ground investigation services.
- Continued investment in the establishment of the Group's Canadian
operations, with a pipeline of identified opportunities now exceeding CAD
$40m.
- Continued leadership training with the first leadership development
programmes in place for high potential leaders and supervisors.
- Re-development of the Group's freehold premises at Pinxton to
provide additional capacity.
Sustainability and ESG
The Group's sustainability strategy is aligned with the UN Sustainable
Development Goals, which we consider to be the most applicable to our business
operations. We have signed up to the Science Based Targets initiative (SBTi)
to set achievable emissions reduction targets against a representative base
year to achieve Net Zero by 2050.
A medium-term sustainability roadmap is established, which provides a clear
pathway to a 30% reduction in our greenhouse gas emissions from a 2020
baseline. Our Sustainability working group, which has executive level
leadership, is using this roadmap to track progress against our targets and
objectives. The Group measures and reports Scope 1 and Scope 2 emissions.
During the year, our people have engaged with numerous social value
initiatives, both during customer projects and also locally within the
community around our offices.
Our sustainability targets for next year include:
- Full validation of our targets with SBTi.
- Become accredited sustainable procurement, ISO 20400.
- Develop processes to measure and report Scope 3 emissions.
- Review and implement solar panels where appropriate.
- Trial low carbon concrete and steel.
- Embed carbon footprint estimations for all projects at the design
stage.
Markets
The Group operates in three market segments:
· Residential constituted 41% of Group revenues in the year (up
from 38% in FY2023). Divisional teams deliver integrated piling and foundation
systems for national and regional housebuilders, retirement homes and
multi-storey residential properties.
Demand for the Group's Smartfoot precast concrete foundation system (reported
in the Group's Ground Engineering Services segment) was very strong during the
early part of the financial 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.
As anticipated, the impact of increasing mortgage rates and general market
uncertainty caused a decrease in the rate of new build starts from the second
quarter, which continued throughout the remainder of the financial year.
Whilst this resulted in significantly lower activity levels in private
housing, some impact was mitigated by the Group's balanced exposure to
affordable and partnership housing customers.
Industry forecasts are still cautious regarding the recovery of the housing
market, and we anticipate the remainder of the year to show only a modest
improvement in volumes, however early indications are positive, with order
intake in the financial year to date over 30% ahead of the corresponding
period last year. The award of the former Boots site in Nottingham by
Keepmoat, worth up to £3m, is our largest single scheme awarded in the last
12 months and represents the 15(th) with Keepmoat over the last three years,
demonstrating our cross-tenure diverse customer base. Interest rate cuts are
widely expected during the second half of 2024 and the new government has
committed to improve the planning process and introduce mandatory
housebuilding targets.
The Group is closely involved with several national housebuilders to help
develop efficient foundation solutions ahead of further Building Regulations
changes planned for 2025. We have recently invested in our precast pile
factory through expanding our capacity by over 30% and have further
diversified our capabilities by offering in-situ beams. A collaboration with
leading groundworker M&J Evans has also been established to offer a
joined-up service to major housebuilders.
Notwithstanding some short-term challenges, the long-term outlook for
housebuilding remains very strong in the UK and in Q1 FY2025, orders for our
Housing division are ahead of the same period in FY2024 by over 30%.
Despite the current challenges in the housing market, our total residential
sector revenues were broadly consistent with prior year, primarily due to the
acquisition of Rock & Alluvium Limited, where a large proportion of
revenues were delivered in the residential sector and reported within the
Group's General Piling segment.
· Infrastructure constituted 40% of Group revenues in the year
(down from 42% in FY2023). The segment includes specialist ground engineering
services to the rail, highways, coastal and flooding, energy and utility
sectors.
In the Rail sector, revenues during the first half of the year were strong as
Network Rail's Control Period 6 (CP6) was delivering works in its final year,
before the transition to CP7 commenced. As expected, this resulted in lower
activity levels in the second half of the financial year.
Planned works in CP7 include greater focus on climate-related activities
including slope stabilisation, drainage improvements, and maintenance works,
which are expected to benefit the Group with a strong capability and track
record across this type of work. With CP7 in the early planning and design
stages, revenues are expected to remain subdued until early 2025.
The Group is well-placed for the medium term with multiple significant
opportunities for growth in the UK rail sector. In particular our activities
as a framework partner on the TransPennine Route Upgrade (TRU) programme
should grow materially over the next three years, and our award as a civils
framework partner Network Rail's programme in the South East are both expected
to generate a solid baseline of work for our Rail team.
In Canada, operations were impacted by further delays to project start dates
resulting in lower activity levels in FY2024 than expected. The commencement
of major works on the Toronto Metro expansion project has been delayed until
late 2025. However, we have developed a strong position with a more diverse
customer base ahead of the Metrolinx GO Expansion programme for which we are
preferred bidder for the strategic partner role and expect to commence
enabling works by the end of H1. The Group has also successfully completed its
first piling scheme for another major customer using its advanced road-rail
engineering methods which are unique to the region. Revenues are in line with
our expectations for FY2025 to date.
Government spending in the highways sector has been lower than anticipated in
the year, with several major projects being cancelled or delayed. The Group's
activities on the Smart Motorways Programme Alliance (SMPA) framework were at
reduced levels as expected due to the cancellation of new schemes. However,
the Group delivered several emergency refuge areas during the second half.
Following a reset of several target projects the Group has a good pipeline of
schemes over the next three years going into National Highways RIS3 investment
period and has been appointed as early partner on three large schemes for Bam
and Galliford Try since the start of FY2025.
With the cyclical nature of investment impacting much of the UK's
infrastructure activities, the Group has targeted the energy and water sectors
for long-term strategic growth, particularly given significant level of
national investment expected in the medium and long term. In energy, we have
developed strong customer partnerships for delivery of future works under the
Accelerated Strategic Transmission Investment (ASTI) programme, where our
breadth of capability puts the Group in a very strong position to be able to
support major transmission line and substation/converter station schemes. This
capability has been diversified to include all expected foundation types,
including modular systems based on the ScrewFast solution and associated civil
engineering works, to reduce interfaces for customers and allow the Group to
offer the best value solution for the project.
Strong progress has also been made in the water sector, where investment under
AMP8 is committed to double to £88bn compared to AMP7. Customer
partnerships are in place for several regions including the previously
announced trading agreement with Galliford Try. Design solutions have been
developed based on the Group's ScrewFast system which modularises and
standardises simple foundations for lower carbon and faster delivery compared
to traditional methods.
· Regional Construction constituted 19% of Group revenues
(unchanged from 19% in FY2023). The Group delivers a full range of piling and
ground improvement services to the commercial and industrial sectors, from
private and public sector building and developer-led markets across the UK.
Strong revenue growth in the prior year was primarily driven by a small number
of large commercial projects in central London, delivered primarily by the
General Piling division. With the backdrop of a more challenging and price
sensitive regional construction market during the year, activity levels were
below the prior year.
The London market is expected to lead a recovery in developer confidence
although the new Building Safety Act will result in a temporary delay as
upfront design and planning workload is increased. The Group's acquisition
of Rock & Alluvium in November 2023 has significantly strengthened its
South East presence and leaves it well positioned to play a leading role.
Elsewhere in the UK the major regional conurbations are all showing signs of
some market recovery. The industrial markets covering factories, data
centres and warehousing also continue to offer significant opportunity for the
Group's range of piling and ground improvement services.
Operating structure
Van Elle's operational structure has remained consistent and is reported in
three segments:
· General Piling: open site; larger projects; key techniques being
large diameter rotary, CFA piling, precast driven piling, rigid inclusions and
vibro stone columns.
· 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 and Smartdeck);
ground investigation and geotechnical services (Strata Geotechnics).
General Piling
Revenue increased by 3% in the year to £56.7m (FY2023: £54.8m), representing
41% of Group revenues. Reported revenue includes the impact of five months'
trading of Rock & Alluvium and on a like-for-like basis, revenue was 11%
down on prior year.
The General Piling division operates across each of the Group's three market
segments. Market conditions remained highly competitive throughout the year,
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.
The acquisition of Rock & Alluvium supported the strong growth in sector
revenues, with the order book acquired being weighted towards CFA piling work
in the residential sector.
Infrastructure workload benefited from the completion of the first phase of a
major energy sector contract in H1. Regional Construction revenues were lower
than the comparative period, mainly due to a very strong order book being
brought forward into the previous year.
The Group acquired Rock & Alluvium Limited which increased the division's
geographic activity in the South East and expands capacity for additional CFA
piling, primarily reported in the General Piling division activities.
Underlying operating profit for the division increased to £5.2m (FY2023:
£3.4m).
Specialist Piling and Rail
Revenue decreased by 6% in the year to £43.9m (FY2023: £46.6m), representing
31% of Group revenues.
Specialist Piling experienced softer market conditions throughout the first
half of the year, primarily as a result of delays to major infrastructure work
on highways and a short-term decrease in demand for drill and grout activity.
Work-winning improved significantly in H2 and delivered very strong activity
levels during the final quarter of the financial year.
In addition to the increased workload from core markets reported in H2,
Specialist Piling maintained a strong focus developing customer partnerships
in the energy and water sectors, where there is a clear pipeline of planned
investment in the UK. These sectors are expected to contribute materially to
segment and sector performance in the medium term.
The Rail division delivered strong revenues in H1, as Network Rail's CP6
entered its final year before CP7 commences. As expected, activity levels
decreased significantly in H2, and are expected to remain lower than recent
levels until CP7 work starts. However, the division is well-placed for medium
term growth, particularly following the appointment as a framework partner on
the TransPennine Route Upgrade (TRU) programme where work commenced in H2. The
Rail division has also been appointed to Network Rail's civils and
geotechnical programme in the South which is expected to generate material
revenues in FY2025 and beyond.
Underlying operating profit for the division decreased to £1.2m (FY2023:
£2.2m).
Ground Engineering Services
Revenue decreased by 18% in the year to £38.3m (FY2023: £47.1m),
representing 27% of Group revenues.
Ground Engineering Services consists of the Group's Housing division and
Strata Geotechnics.
The Housing division delivers integrated piling and Smartfoot foundation beam
solutions to UK housebuilders plus Smartdeck and in-situ beam foundation
solutions. Demand for Smartfoot was very strong during the early part of the
financial year with new building regulations, introduced towards the end of Q1
FY2024, resulting in the acceleration of some residential projects, which
provided a temporary increase to revenues.
As anticipated, there was a significant decrease in the rate of new build
housing starts from the beginning of the second quarter, which continued
throughout the remainder of the year. Whilst this resulted in significantly
lower activity levels in private housing, some impact was mitigated by our
exposure to affordable and partnership housing customers, where volumes
remained more stable.
Strata Geotechnics delivered further revenue growth in the year, with good
progress in the infrastructure sector, particularly on the National Highways
national ground investigation framework and the Coal Authority framework, both
of which have either been extended or renewed. Strata had secured a place on
HS2's £800m phase 2 ground investigation framework, therefore the
cancellation of phase 2b of HS2 was particularly disappointing.
Underlying operating profit for the division decreased to £0.9m (FY2023:
£3.6m).
Rig fleet
The Group operates 132 rigs in total, and we have continued to invest in the
fleet to ensure that our market-leading capability is maintained. Total
capital expenditure in the year was £5.5m (excluding new IFRS 16 leases),
primarily relating to acquisition of new rigs and further investment in the
Group's haulage fleet.
The Group also acquired £2.9m of plant and equipment at fair value (excluding
leased assets) as part of the acquisition of Rock & Alluvium, primarily in
relation to the acquired fleet of CFA piling rigs. In early FY2025, the Group
acquired two sheet piling rigs and attachments from Fussey Piling Ltd, in line
with our strategy to target high-quality second-hand rigs to accelerate our
progress where the opportunity arises.
We continually review the existing fleet and dispose of older assets,
particularly those with low utilisation. £1.9m of cash inflow was generated
from such disposals.
Outlook
Market conditions are expected to remain challenging throughout the remainder
of 2024. However, inflation has reduced to BoE target levels, interest rates
have stabilised and are expected to start to reduce later in 2024 and there
are early signs of improved confidence since the general election. In
addition, the budget constrained cyclical investment transition impacting many
of the Group's infrastructure sectors has passed, with increased relevant
investment expected in the next five-year periods for water, rail and highways
along with significant new investment in the UK's energy transmission network.
The Group has continued to diversify its capabilities with a wider civil
engineering offering now complementing its breadth of foundations and piling
expertise, regional expansion into London and the South East through the
acquisition of Rock & Alluvium and the establishment of a Canadian rail
business in Toronto, with significant growth opportunity in the period FY2025
to FY2027.
As a result, further steady progress in Group performance is expected in
FY2025 ahead of accelerated growth in FY2026 and FY2027. We are confident of
delivering at least 5-10% compound annual revenue growth over this period and
in achieving our medium-term financial targets of 6-7% operating profit margin
and 15-20% ROCE.
Mark Cutler
Chief Executive Officer
23 July 2024
CHIEF FINANCIAL OFFICER'S STATEMENT
FINANCIAL REVIEW
Revenue in the year to 30 April 2024 was below the previous financial year,
down 6.2% in total and down 11.7% on a like-for-like basis with five months
contribution from the acquisition of Rock & Alluvium in the second half of
the financial year. The reduction in revenues was driven primarily by softer
market conditions, with the housing and infrastructure sectors being impacted
by lower levels of demand and project delays throughout the financial year.
Industry-wide softening and investment delays had a greater impact on H1 with
revenue decline slowing in H2. In Q4, revenues were particularly strong and
ahead of Q4 in the previous financial year.
2024 2023 Change 2024 2023
£'000 £'000 % % %
H1 68,210 80,836 (15.6) 48.9 54.3
H2 71,269 67,898 5.0 51.1 45.7
Revenue 139,479 148,734 (6.2) 100.0 100.0
The Group tracks enquiries and activity 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:
2024 2023 Change 2024 2023
£'000 £'000 % % %
Residential 57,197 56,860 0.6 41.0 38.2
Infrastructure 55,222 62,592 (11.8) 39.6 42.1
Regional construction 26,202 28,943 (9.5) 18.8 19.5
Other 858 339 153.1 0.6 0.2
Revenue 139,479 148,734 (6.2) 100.0 100.0
Residential: A large proportion of the revenues from the acquisition of Rock
& Alluvium are reported in the residential sector and on a like-for-like
basis, residential revenues are down 13.3% since last year. Following a period
of record levels of enquiries and contract activity reported in FY2022 and
FY2023, buoyed by changes in building regulations, levels of new build housing
began to slow down, impacted by increasing interest rates and general market
uncertainty. This caused a reduction in volumes, as anticipated, from Q2 of
FY2024 which has continued throughout the remainder of the year.
Infrastructure: Substantial revenues in the prior year were driven by two
large energy-from-waste projects delivered by the General Piling division that
have not reoccurred in the current year. Activity levels in the rail sector
were strong in H1 as CP6 entered its final year before the impact of the
transition to CP7 impacted H2. The Group is a framework partner on the
TransPennine Route Upgrade (TRU) programme for which site work commenced in H2
of FY2024. 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 did commence in H2 of FY2024. The
Group has made good progress on substantial growth opportunities in the energy
and water sectors, the latter increasingly with Galliford Try under the
trading agreement established upon the acquisition of Rock & Alluvium.
Regional construction: With the backdrop of a more challenging and price
sensitive regional construction market in the year, impacted by build
inflation costs, activity levels were below the previous period. The Group's
activities in London and the South East have been strengthened by the
acquisition of Rock & Alluvium in H2.
The mix of revenue by operating segment is shown below:
2024 2023 Change 2024 2023
£'000 £'000 % % %
General Piling 56,686 54,838 3.4 40.6 36.9
Specialist Piling and Rail 43,871 46,593 (5.8) 31.5 31.3
Ground Engineering Services 38,317 47,067 (18.5) 27.5 31.6
Head Office 605 236 156.4 0.4 0.2
Revenue 139,479 148,734 (6.2) 100.0 100.0
Revenues for Rock & Alluvium were £8.1m for the five-month period to 30
April 2024 and are reported within the General Piling operating segment. On a
like-for-like basis, General Piling revenues declined by 12.4% with prior year
revenues including two significant industrial energy projects which, combined,
delivered £18m of revenue in FY2023.The second of these projects was
concluded early in FY2024. The reduction in infrastructure volumes and the
high levels of competition within the regional construction market resulted in
lower overall volumes in the financial year.
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 in highways and a
short-term decrease in demand for ground stabilisation activity typically
delivered in the housing sector. Work-winning and activity levels improved in
H2, as expected. The Rail division delivered strong revenues in H1 as CP6
entered its final year however during H2 volumes declined in line with
expectations as planning for CP7 commenced. In Canada, rail work commenced
in Q2, but delayed project start dates resulted in lower activity levels than
expected. Activity levels have improved since January 2024. The major Toronto
Metro expansion project has been delayed until late 2025 but a more diverse
customer base has been established in the meantime.
The reduction in the Ground Engineering Services operating segment revenue
reflects the subdued housing sector following a strong first quarter. Strata
Geotechnics reported further growth during the year as progress was maintained
in infrastructure work, particularly in the highways sector, in rail and on
HS2 ground investigation projects.
Head office revenues relate to the provision of training services delivered
through the training facility located at Kirkby-in-Ashfield.
Gross profit
Gross margin improved by 3.1% in FY2024 to 30.1% (FY2023: 27.0%). The
increased gross margin is primarily due to better contract execution across
divisions, as well as a positive mix impact. Improved mix is due to the
subdued residential sector resulting in lower Housing revenues where margins
are typically at the lower end of the Group's margin range. In addition, in
the prior year, two significant infrastructure projects delivered by the
General Piling division were delivered at the lower end of the Group's margin
range.
Some inflationary pressures have continued to affect the cost base,
particularly through wage inflation. Cost saving measures and efficiency
projects are being implemented where possible.
Operating profit
Total operating profit and total underlying operating profit declined in
FY2024 as lower activity levels and the absorption of startup costs for the
Group's Canadian rail subsidiary have partially been offset by improved margin
and overhead reduction.
On an underlying basis the Group reports an operating margin of 3.9%,
consistent with FY2023.
2024 2023
£'000 £'000
Operating profit 5,805 5,858
Operating margin 4.2% 3.9%
Underlying operating profit 5,472 5,781
Underlying operating margin 3.9% 3.9%
Alternative performance measures
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 adjustment for
non-underlying items give a clearer indication of the actual performance of
the business.
The Group's non-underlying items in FY2024 include £228,000 of fees
associated with the acquisition of Rock & Alluvium on 30 November 2023, a
health and safety penalty of £250,000 in relation to the fatality of a third
party haulier following the failure of a Van Elle piling rig in April 2021,
management restructure costs of £83,000 being the initial costs incurred for
a restructure programme which commenced at the end of FY2024 and which will
continue into FY2025, research and development credits of £894,000 relating
to FY2022 and FY2023 which are considered one-off in nature, and a credit of
£149,000 for interest received on a protracted legal settlement that was
concluded after the year end.
In FY2023 the Group's non-underlying items included a credit of £427,000
relating to the reduction in the deferred consideration due in respect of the
acquisition of ScrewFast and a charge of £350,000 relating to two warranty
claims where the estimated costs of remediation had increased in the financial
year.
Net finance costs
Net finance costs were £178,000 in the current year (2023: £487,000).
Finance costs relate to interest on outstanding hire purchase agreements and
interest on property and vehicle liabilities classified under IFRS 16. In
FY2024 net finance costs include £101,000 of interest received on cash
balances held and £149,000 of interest received on a protracted legal
settlement that was concluded in the post balance sheet period. Interest
received in the previous financial year was nil.
Taxation
The effective tax rate in the year is 25.1% (2023: 12.9%). The increased
effective tax rate in the current financial year is as a result of the change
in corporation tax rate from 19% to 25% in April 2023 and the cessation of the
super capital allowances scheme in March 2023. The Group benefitted from super
capital allowances in the previous financial year resulting in an effective
tax rate lower than the corporation tax rate applicable at the time.
Dividends
An interim dividend of 0.4p (2023: 0.4p) was paid on 15 March 2024. The
Board is recommending a final dividend of 0.8p (2023: 0.8p) taking the total
dividend payable for the year to 1.2p (2023: 1.2p).
Subject to approval at the Annual General Meeting on Thursday 26 September,
the recommended final dividend will be paid on 18 October 2024 to shareholders
on the share register as at 4 October 2024. The associated ex-dividend date
will be 3 October 2024.
Earnings per share
Underlying basic earnings per share was 3.5p (2023: 4.4p), based on an
underlying profit before tax of £5,145,000 (2023: underlying profit
£5,294,000). Reported basic earnings per share was 3.9p (2023: 4.4p).
Underlying diluted earnings per share was 3.4p (2023: 4.4p) following vesting
of a grant of options made under the Group's LTIP scheme in 2020 during the
period. Reported diluted earnings per share was 3.9p (2023: 4.4p).
Balance sheet
2024 2023
£'000 £'000
Fixed assets (including intangible assets) 48,452 45,630
Net working capital 14,652 9,973
Net funds / (debt) (1,644) 367
Deferred consideration (2,120) (790)
Taxation and provisions (6,606) (5,149)
Net assets 52,734 50,031
Note: net working capital and taxation and provisions are stated net of claim
liabilities and associated insurance assets
Net assets increased by £2.7m to £52.7m (2023: £50.0m). Underlying ROCE
however decreased in the period to 10.5% at 30 April 2024 (2023: 12.2%). ROCE
was adversely impacted in the year by the absorption of start-up costs for the
Group's Canadian operation and the timing of the acquisition of Rock &
Alluvium which contributes only five months of revenues and profits in the
current year.
The Group invested £5.5m in capital over the course of the year. Investment
included the purchase of a rig to support further rigid inclusions growth, a
capability which has experienced growing demand in recent years. The mid-life
overhaul and upgrade of the existing Rail fleet was completed during the year
having commenced in FY2022 with approximately one third of the fleet being
upgraded each year. The remainder of the Group's aging transport fleet was
also replaced during the year with more efficient vehicles. Approximately half
of the fleet was replaced in the previous financial year. The acquisition of
Rock & Alluvium added £2.9m of fixed assets, net of outstanding lease
liabilities to the Group's balance sheet.
Working capital (defined as inventories, trade and other receivables and trade
and other payables) increased to £14.7m (2023: £10.0m), of which £0.6m was
introduced on the acquisition of Rock & Alluvium. Whilst revenues have
declined overall in FY2024 compared with FY2023 activity levels were strong in
the last quarter of the year, with revenues £4.0m higher in Q4 of FY2024
compared with Q4 of FY2023. This increased activity in the final quarter of
the financial year, as well greater research and development income in FY2024,
which is unpaid at the year-end, that has resulted in a larger working capital
investment as at 30 April 2024.
The Group paid the final remaining consideration of £0.7m for the acquisition
of ScrewFast Foundations Limited during the year. The total consideration due
for the acquisition of Rock & Alluvium Limited on 1 December 2023 is
£3.9m of which £1.8m was paid on the date of acquisition and the remaining
£2.1m is due on 1 December 2024. This deferred consideration is a guaranteed
sum.
Provisions in respect of outstanding warranty claims have increased by
£420,000 during the year with one new claim being brought in the period and
an increase in the estimated cost of settlement of one existing warranty
claim.
The Group's deferred tax liability has increased in FY2024 due to utilisation
of carried forward losses resulting in the unwind of the associated deferred
tax assets in the financial year.
Net funds
2024 2023
£'000 £'000
Lease liabilities (7,646) (8,518)
Total borrowings (7,646) (8,518)
Cash and cash equivalents 6,002 8,885
Net (debt)/funds (1,644) 367
Net funds excluding IFRS 16 property and vehicle lease liabilities 5,480 7,526
Net funds have reduced during the year to a net debt position of £1.6m as at
30 April 2024 (2023: net funds of £0.4m) with total cash and cash equivalents
decreasing to £6.0m as at 30 April 2023 (2023: £8.9m).
The Group's lease liabilities include £7.1m of IFRS 16 property and vehicle
lease liabilities (2023: £7.2m). The repayment of these liabilities during
the year was largely offset by the addition of two property leases on the
acquisition of Rock & Alluvium. Vehicle lease liabilities for the Group's
van fleet total £2.4m at 30 April 2024. Vans are leased on a long-term hire
basis over a period of four years with early termination possible.
Remaining lease liabilities of £0.5m relate to three outstanding hire
purchase agreements, two of which were assumed on the acquisition of Rock
& Alluvium. These three hire purchases agreements are scheduled to expire
in 2024 and 2025.
The Group has an £11.0m asset backed lending facility, secured against the
Group's receivables and certain tangible assets. The facility was not drawn
during the year. There are no financial covenants associated with the facility
which is due to expire in September 2026.
Cash flow
2024 2023
£'000 £'000
Operating cash flows before working capital 13,286 11,846
Working capital movements (including provisions) (4,578) (1,885)
Cash generated from operations 8,708 9,961
Income tax received - 323
Net cash generated from operating activities 8,708 10,284
Investing activities (6,583) (5,602)
Financing activities (5,008) (2,784)
Net (decrease)/increase in cash (2,883) 1,898
As mentioned above, the working capital investment during the year is due to
increased trading levels in Q4 and increased research and development income
which is unpaid at the year end. Working capital cash flows exclude the impact
of working capital introduced on the acquisition of Rock & Alluvium.
Operating cash flows of £8.7m have primarily been used to repay outstanding
debt, fund capital expenditure, acquisition consideration payments and
dividends. Dividend payments were £1.3m in the year.
During the period the Group repaid two variable rate hire purchase agreements
early, resulting in a cash outflow of £1.0m, paid the final deferred
consideration of £0.7m for the acquisition of ScrewFast Foundations Limited,
and paid £1.8m of initial consideration for the acquisition of Rock &
Alluvium. The Group also established an employee benefit trust during the year
for the purposes of purchasing shares for issue on exercise of share options.
A contribution of £0.5m was made to the employee benefit trust during the
year.
Graeme Campbell
Chief Financial Officer
23 July 2024
Consolidated statement of comprehensive income
For the year ended 30 April 2024
2024 2023
Underlying Non Statutory Underlying Non Statutory
Underlying Underlying
Items Items
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 139,479 - 139,479 148,734 - 148,734
Cost of sales (97,545) - (97,545) (108,646) - (108,646)
Gross profit 41,934 - 41,934 40,088 - 40,088
Administrative expenses (38,984) - (38,984) (35,166) - (35,166)
Credit loss impairment credit/(charge) 157 - 157 (45) - (45)
Acquisition costs - (228) (228) - - -
Legal costs - (250) (250) - - -
Restructuring costs - (83) (83) - - -
Deferred consideration - - - - 427 427
Warranty costs - - - - (350) (350)
Other operating income 2,365 894 3,259 904 - 904
Operating profit 5,472 333 5,805 5,781 77 5,858
Finance expense (429) - (429) (487) - (487)
Finance income 102 149 251 - - -
Profit before tax 5,145 482 5,627 5,294 77 5,371
Income tax expense (1,433) 20 (1,413) (605) (88) (693)
Profit after tax 3,712 502 4,214 4,689 (11) 4,678
Earnings per share (pence)
Basic 3.5 3.9 4.4 4.4
Diluted 3.4 3.9 4.4 4.4
Other comprehensive income 2024 2023
£'000 £'000
Items that may or may not be reclassified subsequently to profit or loss:
Foreign operations - foreign currency translation differences (39) -
(39) -
Other comprehensive income for the year, net of tax (39) -
Total comprehensive income for the year attributable to shareholders of the 4,175 4,678
parent
All amounts relate to continuing operations.
Consolidated statement of financial position
As at 30 April 2024
2024 Restated
£'000 2023
£'000
Non-current assets
Property, plant and equipment 44,020 41,917
Intangible assets 4,432 3,713
48,452 45,630
Current assets
Inventories 5,753 4,971
Trade and other receivables 38,268 35,544
Cash and cash equivalents 6,002 8,885
50,023 49,400
Total assets 98,475 95,030
Current liabilities
Trade and other payables 22,569 23,245
Loans and borrowing - 772
Lease liabilities 2,040 1,567
Deferred consideration 2,120 790
Provisions 8,064 8,143
34,793 34,517
Non-current liabilities
Loans and borrowing - 386
Lease liabilities 5,606 5,793
Deferred tax 5,342 4,303
10,948 10,482
Total liabilities 45,741 44,999
Net assets 52,734 50,031
Equity
Share capital 2,135 2,133
Share premium 8,633 8,633
Other reserve 5,807 5,807
Retained earnings 36,159 33,458
Total equity 52,734 50,031
Consolidated statement of cash flows
For the year ended 30 April 2024
Restated
2024 2023
£'000 £'000
Cash flows from operating activities
Operating profit 5,805 5,858
Depreciation of property, plant and equipment 7,506 5,984
Amortisation of intangible assets 149 134
Depreciation of investment property - 9
Profit on disposal of property, plant and equipment (404) (310)
Share based payment expense 230 171
Operating cash flows before movement in working capital 13,286 11,846
Increase in inventories (743) (1,200)
Increase in trade and other receivables (1,317) (1,434)
Decrease in trade and other payables (2,439) 344
Decrease in provisions (79) 405
Cash generated from operations 8,708 9,961
Income tax received - 323
Net cash generated from operating activities 8,708 10,284
Cash flows from investing activities
Purchases of property, plant and equipment (5,500) (6,167)
Proceeds from disposal of property, plant and equipment 1,877 615
Acquisition of subsidiary, net of cash acquired (2,540) (50)
Purchases of own shares into EBT (420) -
Net cash absorbed in investing activities (6,583) (5,602)
Cash flows from financing activities
Proceeds from new loans and borrowings - 4,544
Proceeds from issue of shares 2 -
Repayment of borrowings (1,158) (3,386)
Principal paid on lease liabilities (2,394) (2,008)
Interest paid on lease liabilities (335) (388)
Interest on borrowings (93) (53)
Interest receivable 250 -
Dividends paid (1,280) (1,493)
Net cash absorbed in financing activities (5,008) (2,784)
Net increase / (decrease) in cash and cash equivalents (2,883) 1,898
Cash and cash equivalents at beginning of year 8,885 6,987
Cash and cash equivalents at end of year 6,002 8,885
Consolidated statement of changes in equity
For the year ended 30 April 2024
Share Share Other Total
Capital premium reserve Retained equity
£'000 £'000 £'000 earnings £'000
£'000
Balance at 1 May 2022 2,133 8,633 5,807 30,038 46,611
Total comprehensive income - - - 4,678 4,678
Dividends paid - - - (1,493) (1,493)
Share-based payments - - - 171 171
Deferred tax credit on share-based payments - - - 64 64
Total changes in equity - - - 3,420 3,420
Balance at 30 April 2023 2,133 8,633 5,807 33,458 50,031
Total comprehensive income - - - 4,175 4,175
Issue of share capital 2 - - - 2
Purchase of own shares into EBT - - - (420) (420)
Dividends paid - - - (1,280) (1,280)
Share-based payments - - - 226 226
Total changes in equity 2 - - 2,701 2,703
At 30 April 2024 2,135 8,633 5,807 36,159 52,734
Notes:
1. Basis of preparation
The consolidated financial statements and announcement of Van Elle Holdings
plc for the year ended 30 April 2024 were authorised for issue by the Board of
Directors on 23 July 2024.
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 2024 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 2024 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 UK
adopted 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
New standards, interpretations and amendments effective from 1 May 2023
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:
· IFRS 17 Insurance contracts including amendments to IFRS 17
(issued on 25 June 2020)
· Amendments to IAS 8 - Definition of Accounting Estimates
· Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of
Accounting policies
· Amendments to IAS 12 - Deferred Tax related to Assets and
Liabilities arising from a Single Transaction
· Amendment to IFRS 17 - Initial Application of IFRS 17 and IFRS 9
- Comparative Information
· Amendments to IAS 12 International Tax Reform - Pillar Two Model
Rules
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:
· IFRS S1 General Requirements for Disclosure of
Sustainability-related Financial Information
· IFRS S2 Climate-related Disclosures
· IFRS 18 Presentation and Disclosure in Financial Statements
· IFRS 19 Subsidiaries without Public Accountability: Disclosures
· Amendments to IAS 1: Classification of Liabilities as Current or
Non-current
· Amendment to IFRS 16 Leases: Lease liability in a Sale and
Leaseback
· Amendment to IAS 7 and IFRS 7 - Supplier Finance Arrangements
· Amendment to IAS 21 - Lack of Exchangeability
2. Segment information
The Group evaluates segmental performance based on profit or loss from
operations calculated in accordance with IFRS but excluding non-recurring
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.
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 2024
General Specialist Ground Head Total
Piling Piling and Rail Engineering Office £'000
£'000 £'000 Services £'000
£'000
Revenue 56,686 43,871 38,317 605 139,479
Other operating income - - - 3,259 3,259
Underlying operating profit/(loss) 5,212 1,198 918 (1,856) 5,472
Operating profit/(loss) 5,212 1,198 918 (1,523) 5,805
Finance expense - - - (429) (429)
Finance income - - - 251 251
Profit / (loss) before tax 5,212 1,198 918 (1,701) 5,627
Assets
Property, plant and equipment 12,444 13,388 7,049 11,139 44,020
Intangible assets 871 3,362 199 - 4,432
Inventories 2,304 864 2,539 46 5,753
Reportable segment assets 15,619 17,614 9,787 11,185 54,205
Trade and other receivables - - - 38,268 38,268
Cash and cash equivalents - - - 6,002 6,002
Total assets 15,619 17,614 9,787 55,455 98,475
Liabilities
Trade and other payables - - - 22,569 22,569
Lease liabilities - - - 7,646 7,646
Provisions - - - 8,064 8,064
Deferred consideration - - - 2,120 2,120
Deferred tax - - - 5,342 5,342
Total liabilities - - - 45,741 45,741
Other information
Capital expenditure (including IFRS 16 leased assets) 1,144 1,764 704 2,844 6,456
Depreciation (including IFRS 16 leased assets) 2,063 2,828 1,640 1,123 7,654
Geographical segments - 30 April 2024
UK Rest of Total
£'000 world £'000
£'000
Revenue 139,077 402 139,479
Operating profit/(loss) 7,195 (1,390) 5,805
Non-current assets 46,991 1,461 48,452
Operating segments - 30 April 2023
General Specialist Ground Head Restated
Piling Piling and Rail Engineering Office Total
£'000 £'000 Services £'000 £'000
£'000
Revenue 54,838 46,593 47,067 236 148,734
Other operating income - - - 904 904
Underlying operating profit/(loss) 3,403 2,236 3,642 (3,500) 5,781
Operating profit / (loss) 3,403 2,236 3,642 (3,423) 5,858
Finance expense - - - (487) (487)
Profit / (loss) before tax 3,403 2,236 3,642 (3,910) 5,371
Assets
Property, plant and equipment 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
Loans and borrowings - - - 1,158 1,158
Lease liabilities - - - 7,360 7,360
Provisions - - - 8,143 8,143
Deferred consideration - - - 790 790
Deferred tax - - - 4,303 4,303
Total liabilities - - - 44,999 44,999
Other information
Capital expenditure (including IFRS 16 leased assets) 1,171 4,188 1,351 1,977 8,687
Depreciation (including IFRS 16 leased assets) 1,422 2,262 1,421 879 5,984
Geographical segments - 30 April 2023
UK Rest of Total
£'000 world £'000
£'000
Revenue 148,734 - 148,734
Operating profit/(loss) 5,858 - 5,858
Non-current assets 45,630 - 45,630
The Group had no customers with revenues greater that 10% in the current
period (2023: one). Total revenues from the customer in 2023 were £18.4m and
these are reported within the General Piling operating segment.
3. Revenue from contracts with customers
Disaggregation of revenue - 30 April 2024
End market General Specialist Ground Head Total
Piling Piling and Rail Engineering Office £'000
£'000 £'000 Services £'000
£'000
Residential 22,937 4,921 29,339 - 57,197
Infrastructure 15,737 33,153 6,332 - 55,222
Regional construction 17,761 5,797 2,644 - 26,202
Other 251 - 2 605 858
Total 56,686 43,871 38,317 605 139,479
Head office revenue relates to revenue generated from the provision of
training services and the release of overpayments received from customers that
are greater than six years' old.
Disaggregation of revenue - 30 April 2023
End market General Specialist Ground Head Total
Piling Piling and Rail Engineering Office £'000
£'000 £'000 Services £'000
£'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
4. Income tax expense
2024 2023
£'000 £'000
Current tax credit
Current tax on profit/loss for the year 763 -
Adjustment for over-provision in the prior period 38 -
Total current tax credit 801 -
Deferred tax expense
Origination and reversal of temporary differences 484 1,176
Adjustment for over-provision in the prior period 128 (483)
Total deferred tax expense 612 693
Income tax expense 1,413 693
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
profit/(loss) for the year are as follows:
2024 2023
£'000 £'000
Profit / (loss) before income taxes 5,267 5,371
Tax using the standard corporation tax rate of 19.5% (2022: 19%) 1,407 1,047
Adjustments for over-provision in previous periods 167 (483)
Expenses not deductible for tax purposes 69 130
Income not taxable (474) (83)
Non-qualifying depreciation 244 -
Tax rate changes - 259
Capital allowances super deductions - (177)
Total income tax expense 1,413 693
During the year ended 30 April 2024, corporation tax has been calculated at
25% of estimated assessable profit for the year (2023: 25%).
Deferred tax balances as at 30 April 2024 are measured at the current
corporation tax rate of 25%.
5. Earnings per share
The calculation of basic and diluted earnings per share is based on the
following data:
2024 2023
'000 '000
Basic weighted average number of shares 106,703 106,667
Dilutive potential ordinary shares from share options 1,209 473
Diluted weighted average number of shares 107,912 107,140
£'000 £'000
Profit for the year 4,214 4,678
Non-underlying items (482) (77)
Tax effect of non-underlying items (20) 88
Underlying profit for the year 3,712 4,698
Pence Pence
Earnings per share
Basic 3.9 4.4
Diluted 3.9 4.4
Basic - underlying 3.5 4.4
Diluted - underlying 3.4 4.4
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders and on 106,703,045 ordinary shares
(2023: 106,666,650), being the weighted average number of ordinary shares.
The dilutive shares of 1,209,000 (2023: 473,000) represent share options
exercisable under the Group's LTIP scheme that vested during the financial
year and are yet to be exercised. Share options exercisable under the Group's
CSOP scheme were classified as dilutive in the prior year however are
underwater as at 30 April 2024 and therefore have not been included in
dilutive shares in the current year.
6. Analysis of cash and cash equivalents and reconciliation to net debt
Restated Cash Non-cash 2024
2023 flows flows £'000
£'000 £'000 £'000
Cash at bank 8,847 (2,883) - 5,964
Cash in hand 38 - - 38
Cash and cash equivalents 8,885 (2,883) - 6,002
Loans and borrowings (1,158) 1,158 - -
Lease liabilities (7,359) 2,729 (3,016) (7,646)
Net funds / (debt) including IFRS 16 property and vehicle lease liabilities 367 1,004 (3,016) (1,644)
Cash flows in respect of lease liabilities include interest paid on leases of
£335,000 (2023: £388,000) and principal paid of £3,553,000 (2023:
£2,394,000).
Non-cash flows in respect of lease liabilities include the financing of
£1,044,000 (2023: £2,903,000) of fixed assets on long-term hire, £1,639,000
of lease liabilities arising on business combinations and interest expense of
£335,000 (2023: £388,000).
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR DZGZNMFDGDZZRecent news on Van Elle Holdings
See all newsREG - Van Elle Holdings - Holding(s) in Company
AnnouncementREG - Van Elle Holdings - PDMR and PCA Share Purchase
AnnouncementREG - Van Elle Holdings - Holding(s) in Company
AnnouncementREG - Van Elle Holdings - Trading Update
AnnouncementREG - Van Elle Holdings - Holding(s) in Company
Announcement