REG - Van Elle HoldingsPLC - Interim Results, Analyst Briefing & Investor Pres
24/01/2024 07:15
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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').
£m 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 £10-15m 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 £5.0m.
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
(mailto: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 broker) Tel: 020 7418 8900
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 £68.2m, represents a decrease of 16% on the prior period
(H1 FY2023: £80.8m). 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 £2.7m (H1 FY2023: £3.5m).
Net funds as at 31 October 2023 (excluding IFRS 16 property and vehicle lease
liabilities) increased to £8.9m, from £7.5m. Net capital expenditure of
£2.5m 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 £0.7m, for the acquisition of ScrewFast
Foundations Limited, and the FY2023 final dividend of £0.9m in the Period.
The Group continued to maintain a strong balance sheet with a healthy cash
balance and significant liquidity headroom against its £11.0m funding
facility, which remains unused. Group debt reduced to £0.1m, excluding IFRS
16 lease liabilities.
The order book at 31 December 2023 was £42.0m including £11.6m for Rock
& Alluvium. On a like-for-like basis, this reflects a slight reduction
from the position at 31 October 2023 of £32.7m 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 £29.3m (H1 FY2023: £30.9m).
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 £28.7m (H1 FY2023: £31.6m).
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 £300m 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 £9.7m (H1 FY2023: £18.1m).
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 £25.4m (H1 FY2023: £29.3m),
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 £1.8m for the Period (H1 FY2023: £2.3m) 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 £20.3m (H1 FY2023: £24.8m),
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 £0.5m (H1 FY2023: £1.1m).
Ground Engineering Services
Revenue decreased by 17% in the Period to £22.1m (H1 FY2023: £26.6m),
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 £4.1m
(H1 FY2023: £3.5m) 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 £800m phase 2 ground investigation framework,
therefore the cancellation of phase 2b of HS2 was particularly disappointing.
Underlying operating profit for the segment decreased to £1.8m (H1 FY2023:
£2.5m) 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 to 31 Oct 2023 (unaudited) 6 months to 12 months to 30 Apr 2023 (audited)
£'000 31 Oct 2022 (unaudited) £'000
Note £'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 1,675 2,820 4,678
shareholders of the parent
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 2023 (unaudited) 31 Oct 2022 (unaudited) 30 Apr 2023 (audited)
£'000 £'000 £'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 to 31 Oct 2023 (unaudited) 6 months to 12 months to 30 Apr 2023 (audited)
£'000 31 Oct 2022 (unaudited) £'000
£'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 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
(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 £9.0m remains at the end of the period. The Group's
net funds position (excluding IFRS 16 property and vehicle lease liabilities)
of £8.9m has increased by £1.4m during the period. The Group's £11m 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 £0.1m.
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
General Specialist Ground Head Total
Piling Piling & Rail Engineering Office £'000
£'000 £'000 Services £'000
£'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 £7.4m 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:
UK Other countries Total
£'000 £'000 £'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
General Specialist Ground Head Total
Piling Piling & Rail Engineering Office £'000
£'000 £'000 Services £'000
£'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:
UK Other countries Total
£'000 £'000 £'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
General Specialist Ground Head Total
Piling Piling Engineering Office £'000
£'000 & Rail Services £'000
£'000 £'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 £18.4m 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:
UK Other countries Total
£'000 £'000 £'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
End market General Specialist Ground Head Total
Piling Piling & Rail Engineering Office £'000
£'000 £'000 Services £'000
£'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
End market General Specialist Ground Head Total
Piling Piling & Rail Engineering Office £'000
£'000 £'000 Services £'000
£'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
End market General Specialist Ground Head Total
Piling Piling & 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
Contract assets
6 months to 6 months to 12 months to
31 Oct 2023 31 Oct 2022 30 Apr 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'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 to 6 months to 12 months to 30 Apr 2023 (audited)
31 Oct 2023 (unaudited) 31 Oct 2022 (unaudited) £'000
£'000 £'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 to 6 months to 12 months to 30 Apr 2023 (audited)
31 Oct 2023 (unaudited) 31 Oct 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
£'000 £'000 £'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 to 6 months to 12 months to
31 Oct 2023 31 Oct 2022 30 Apr 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'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 30 April 2023 of 0.8p per share 853 - -
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 2023 (unaudited) 31 Oct 2022 (unaudited) 30 Apr 2023
£'000 £'000 (audited)
£'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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