REG - Van Elle HoldingsPLC - Interim Results & Investor Presentation
31/01/2022 07:00
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RNS Number : 0569A Van Elle Holdings PLC 31 January 2022
Van Elle Holdings plc
('Van Elle', the 'Company' or the 'Group')
Interim Results for the six months ended 31 October 2021
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 2021 (the
'Period').
£m 6 months 6 months 6 months
ended ended ended
31 Oct 2021 31 Oct 2020 31 Oct 2019
Revenue 60.1 38.3 48.5
EBITDA(1) 4.8 1.9 3.4
Operating profit / (loss) 2.3 (0.4) 1.2
Profit / (loss) before taxation 1.9 (0.7) 0.9
Basic earnings per share (p) 1.4 (0.5) 0.9
Net (debt) / funds (2.0) 0.6 (10.4)
Net funds (excluding IFRS 16 property and vehicle lease liabilities) 3.5 4.5 (6.4)
(1) EBITDA is defined as earnings before interest, tax, amortisation and
depreciation.
Share based payments have been reclassified from 'non-underlying' to
'underlying' in the Period. The comparative periods have been restated to
reflect this reclassification.
There are no non-underlying items in the Period.
A comparative for the 6 months ended 31 October 2019 has been presented as it
is considered to represent a more meaningful pre-Covid-19 baseline for
performance comparisons.
Period highlights
· Core markets recovered strongly following the relaxation of
pandemic related restrictions
· All divisions performed well as the higher activity levels
achieved in the last quarter of FY2021 continued throughout H1 of FY2022
· The Group traded profitably and in excess of the pre-pandemic
comparatives in H1 of FY2020
· The Rail business saw improved contract activity towards the end
of the Period, which has continued into the third quarter of FY2022
· Integration of ScrewFast into the wider Group is progressing well
and performance is in line with expectations at the time of acquisition
· The Group has been awarded several important contracts, including
on the Core Valley Lines rail electrification and the Smart Motorway Programme
Alliance
· The Group maintained a robust balance sheet with cash and cash
equivalents as at 31 October 2021 of £6.3m (30 April 2021: £8.5m), with cash
outflows reflecting a normalisation of working capital, planned capital
expenditure and a reduction of Group debt
· Further progress made against the three pillars of the strategic
plan, focussed on delivering the medium-term targets of revenue growth,
improved operating margin and higher return on capital employed
· Healthy order book at 31 December 2021 of £39.1m (31 October
2021: £34.5m)
Outlook
· The positive trading momentum from the first six months has
carried into H2 of FY2022
· The improved levels of demand across the core markets are
expected to remain strong for the remainder of the financial year and into
FY2023
· Investment in infrastructure, including the
decarbonisation/electrification of the rail network, where the Group has
established a market-leading position, is expected to continue in the longer
term
· The Board now anticipates trading for the full year to be ahead
of market expectations
· The Board confirms its intention to reinstate dividend payments,
commencing with a final, full year dividend for FY2022
Mark Cutler, Chief Executive, commented:
"I'm delighted that Van Elle has continued to deliver a strong recovery from
the pandemic, despite supply chain and labour pressures.
"Our core markets have seen strong demand with all divisions operating at
increased utilisation levels throughout the Period. This demand for our
services has continued into the third quarter, and we are particularly
encouraged by the improved opportunities in our Rail division.
"We remain optimistic that the improved levels of demand in our core markets
will remain strong for the remainder of the financial year and into the medium
term. As a result, we expect the trading performance for the full year to be
ahead of our previous expectations."
Analyst Briefing: 9.30am on Monday 31 January 2022
A 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 Monday 31 January 2022
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.
Certain information contained in this announcement would have constituted
inside information (as defined by Article 7 of Regulation (EU) No 596/2014),
as it forms part of domestic law by virtue of the European Union (Withdrawal)
Act 2018) ("MAR") prior to its release as part of this announcement and is
disclosed in accordance with the Company's obligations under Article 17 of
those Regulations.
For further information, please contact:
Van Elle Holdings plc Mark Cutler Via Walbrook PR
Chief Executive Officer
Graeme Campbell
Chief Financial Officer
Peel Hunt LLP (Nominated Adviser and Broker) Mike Bell 020 7418 8900
Edward Allsopp
Walbrook PR Limited 020 7933 8780 or vanelle@walbrookpr.com
07971 221 972
Tom Cooper
Nick Rome 07748 325 236
Nicholas Johnson 07884 664 686
About Van Elle Holdings plc:
Van Elle Holdings is the UK's largest specialist geotechnical engineering
contractor. The Company provides a 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 Ground Engineering; and is focused on three end markets: residential and
housing, infrastructure and regional construction - across which the Group has
completed more than 20,000 projects over the last 35 years.
General Piling provides a range of larger piling and ground engineering
solutions for open-site construction projects. Specialist Piling provides a
range of geotechnical solutions in operationally constrained environments
including on-track rail applications. Ground Engineering services offers a
range of ground investigation and geotechnical services and modular foundation
solutions such as Smartfoot®. Van Elle has a market-leading reputation and
the UK's largest rig fleet of 120 rigs.
Having floated on AIM in 2016 it now has a strong national presence,
diversified offering and market-leading brand name.
Van Elle Holdings plc - Interim Report to 31 October 2021
Results overview
Half year revenues of £60.1m were significantly ahead of the Covid‐19
impacted prior period (H1 FY2021: £38.3m) and represent an increase of 24%
compared with the same period in FY2020, the latter being the last comparative
period unaffected by Covid-19.
Sales were segmented to our end markets as follows: residential 43.0% (H1
FY2021: 44.5%), infrastructure 36.4% (H1 FY2021: 35.6%) and regional
construction 20.6% (H1 FY2021: 19.7%).
The recovery in the national construction and housebuilding markets during the
first half of the year delivered strong order levels and significantly
increased contract activity in the Period. As expected, the recovery in Rail
volumes continues to lag the other divisions. However, the Rail business has
seen an improvement in enquiry levels and contract activity towards the end of
the Period, which has continued into the third quarter.
Managing the headwinds caused as a result of the widely reported supply chain
challenges in the construction sector continues to prove difficult,
particularly with regard to the pricing and availability of cement, concrete,
and steel. The impact is greatest in the General Piling division, where higher
volumes of raw materials are typically required on contracts. Price increases
have been reflected in tendering activity to recover the significant input
cost inflation we are exposed to, although with some customer pricing
mechanisms, there is a lag in recovery. The impact from a lack of availability
of raw materials continues to be mitigated at an operational level as far as
possible.
Labour availability and wage inflation are also presenting some challenges
across the construction sector, with high demand for skilled employees,
including the significant numbers of operational staff needed to meet the
requirements of HS2. We are also experiencing some disruption from short-term
employee unavailability, where our people have been required to self-isolate
due to Covid-19 infection.
Despite these challenges, all divisions returned to profitability in the
Period. Group operating profit improved to £2.3m (H1 FY2021: operating loss
of £0.4m) which is also a material increase compared with the pre-pandemic
comparator of H1 FY2020 which delivered an operating profit of £1.2m.
Cash and cash equivalents as at 31 October 2021 were £6.3m (30 April 2021:
£8.5m). The decrease in cash reflects a normalisation of working capital,
planned capital expenditure and a reduction of Group debt. The working capital
increase is a result of higher activity levels and certain creditor payments
made under shorter payment terms, to secure materials given the current supply
chain challenges.
On the acquisition of ScrewFast Foundations Limited, loans of £0.8m were
consolidated within Group debt. Where the terms of the loan arrangements
allowed for repayment without penalty, these loans were fully repaid in the
Period. At the Period end, £0.2m of loan debt remained on the balance sheet
and will be repaid in future periods, in accordance with the loan agreements.
Net funds (excluding IFRS 16 property and vehicle lease liabilities) at 31
October 2021 were £3.5m (30 April 2021: £3.7m). Capital outstanding on hire
purchase contracts reduced to £2.7m (30 April 2021: £4.0m).
The Group's order book at 31 December 2021 increased to £39.1m (31 October
2021: £34.5m).
Market overview
The Group's core markets have recovered strongly following the most severe
effects of pandemic, which impacted the performance of all divisions in the
previous financial year. The uncertainty caused by Brexit, which also impacted
prior year activity levels, has largely abated, with the exception of some
challenges and delays to cross-border deliveries of rig parts for routine
maintenance.
The Group operates in the following three market segments:
· Residential, including private and social housebuilding and
larger residential developments.
Demand in the first half was very strong, with the Housing division operating
at near capacity. The stamp duty holiday helped to drive significant
housebuilding activity in the second half of FY2021 and the first half of the
current financial year. However, enquiries and contract activity levels have
remained high, despite the phasing out of the stamp duty holiday over the
summer of 2021.
The sector continues to offer growth opportunities, both in private housing
and larger scale residential and retirement sectors. We remain confident that
our enhanced range of ground improvement and piling capabilities complementing
our modular foundation system, Smartfoot, will continue to be popular with
both traditional housebuilders and emerging modular housebuilders, due to the
benefits of reduced time, certainty of supply and cost and much reduced
on-site resource levels.
· Infrastructure includes highways, railways, coastal and flooding,
and power and energy segments.
In highways, we successfully delivered schemes under both local authority
frameworks, Highways England's regional delivery programme and its Smart
Motorway's programme. The Group was recently appointed to deliver all types of
piling and retaining structures for the National Highways Smart Motorway
Programme as one of two primary providers to the SMP Alliance for a period of
up to 10 years. We note the government's recent announcement to pause the
Smart Motorway investment programme whilst 5 years' safety and economic data
is collected, however, design work, live contracts and increased investment in
emergency refuge areas are to continue, which continues to present significant
opportunity for the Group and, in particular, ScrewFast.
Recovery in the Rail sector has lagged other divisions in the Group, but
encouragingly, enquiry levels and contract activity improved towards the end
of the Period which has continued into the second half of the financial year.
Work has started on the Group's first major electrification programme since
2018; a contract for piling and foundations for electrification of the Core
Valley Lines, part of the South Wales Metro Transformation, which we expect to
continue throughout 2022. The Government's Integrated Rail Plan sets out
proposals to decarbonise the railway network through investment in
electrification, and we therefore anticipate further opportunities over the
medium and long term.
The Group is also making progress in the power sector, particularly on
substation and power infrastructure projects across National Grid and regional
distribution networks, further strengthened by the capabilities brought
in-house following the acquisition of ScrewFast.
· Regional Construction includes the general private and public
sector building and developer-led markets across the UK.
The regional construction market has remained highly competitive despite an
increase in activity levels following the impacts of Covid-19 and Brexit. We
have continued to secure and deliver high quality projects whilst also
continuing to focus on contract execution and commercial improvement in our
General Piling division. The industrial warehousing sector continues to
provide significant opportunities for the Group's expanded range of integrated
services, including ground improvement techniques as well as precast concrete
and rotary piling operations. The Group has also had further success in
winning larger schemes in the London region utilising its deep CFA technical
expertise.
Operating structure
Our operational Group structure has remained consistent and is reported in
three segments. ScrewFast Foundations Limited is reported within the
Specialist Piling and Rail segment.
· General Piling: open site; larger projects; key techniques being
large diameter rotary and CFA piling as well as larger precast driven piling.
· Specialist Piling and Rail: restricted access; rail mounted
capability; helical piling and steel modular foundations (trading as ScrewFast
Foundations); smaller rigs and engineering techniques, including soil nails,
anchors, mini-piling and ground stabilisation projects.
· Ground Engineering Services: modular foundation solutions (e.g.
Smartfoot); ground improvement and geotechnical services (trading as Strata
Geotechnics).
General Piling
Revenue in the Period increased by 31% to £18.1m (H1 FY2021: £13.8m). The
comparative period was impacted particularly during the first quarter when
Covid-19 national lockdowns resulted in site closures. Market conditions
remained highly competitive throughout the Period, however successful tender
conversion improved towards the end of the previous financial year with higher
activity levels across our end markets. Revenues delivered in the Period were
slightly above pre-Covid levels (H1 FY2020: £17.7m).
Revenue was supported by further growth in rigid inclusions workload, a ground
improvement technique which was recently added to the Group's capabilities.
Rigid inclusions accounted for £3.7m of revenue in the Period.
General Piling was significantly impacted by the industry-wide supply chain
challenges, particularly due to the higher raw material requirements of the
division's contract works. Steel, concrete and cement products have been
subject to material price inflation and availability challenges throughout the
Period, resulting in contract margins coming under pressure. These challenges
continue to be mitigated at an operational level as far as possible, but are
not expected to abate in the coming months.
Despite the ongoing supply chain challenges and other impacts, including wage
inflation, the increase in activity levels resulted in an improved operating
profit of £898k for the Period (H1 FY2021: £163k).
Specialist Piling and Rail
Revenue in the Period increased by 74% to £22.1m (H1 2021: £12.7m).
Excluding the first full six-month contribution from ScrewFast, revenue
increased by 43% on an organic basis.
Specialist Piling revenues recovered rapidly after the first lockdown and the
business unit has since operated at near-capacity utilisation levels.
Investment in drill and grout ground stabilisation capability delivered strong
revenue growth in the Period and activity levels on infrastructure projects
have also continued positively, with notably high levels of work on rail
station projects. Three new rigs have been added to the fleet in the Period in
order to satisfy the strong demand for these services.
The acquisition of ScrewFast Foundations Limited on 1 April 2021 has further
strengthened the Group's position in the Specialist Piling segment,
particularly across infrastructure growth markets. The integration of
ScrewFast into the wider Group is progressing well as our teams work more
closely together, providing greater opportunity for cross-selling the Group's
products and services. With regard to the recently announced pause to Smart
Motorway programmes, ScrewFast is expected to continue with its design remits
on all the new schemes, continue construction activities on the M6 junction
21a-26, and under the ownership of Van Elle, has developed a diversified
pipeline of opportunities beyond highways to mitigate any impact which may be
felt from delays. The business is performing in line with expectations at the
time of acquisition.
Recovery in Rail activity levels generally lagged the other business units in
the Period, but encouragingly, enquiries and contract activity improved
towards the end of the Period, which is expected to continue through the
second half of the financial year. This was assisted by further
diversification of services to include ancillary civil engineering works
alongside geotechnical works for signalling programmes, which have been
deployed very successfully on the Group's work supporting the acclaimed
re-opening of the Dartmoor line in November 2021. With the anticipated
increase in demand, the acquisition of four further road rail rigs has been
approved to expand capability in FY2023.
The strong growth seen in Specialist Piling, including the contribution from
ScrewFast, resulted in operating profit increasing to £1,646k (H1 FY2021:
£799k).
Ground Engineering Services
Revenue in the Period increased by 69% to £19.8m (H1 2021: £11.7m). The
prior year period was also significantly impacted by the effect of Covid-19 on
housebuilders' activity during the first lockdown. However, revenue in the
Period represents growth of 17% over pre-Covid revenues of £16.9m in H1
FY2020.
Our Housing division delivers integrated ground improvement, piling and
Smartfoot foundation beam solutions to UK housebuilders. After the gradual
reopening of housebuilding sites following the first lockdown in April 2020,
Housing reported revenue growth supported by the high levels of activity in
the sector. The division has focussed on geographical expansion within the UK,
and efficiency of operational delivery, resulting in an improved performance,
both in revenue and gross margin. Further investment in our vibro rig
capabilities delivered revenues of £1.9m in the Period (H1 FY2021: £0.9m).
Strata, our Geotechnical division, reported revenues of £3.0m (H1 FY2021:
£2.2m). The division continued to make good progress in the infrastructure
sector, including contracts delivered under the national Highways England
ground investigation framework, and several projects in the rail sector - a
target growth segment for Strata, which includes HS2 and the Core Valley
Lines.
Increased activity levels and improved operational delivery has delivered an
operating profit in the Period of £1,208k (H1 FY2021: operating loss of
£110k). This represents growth of 50% compared to the pre-Covid operating
profit in H1 FY2020 of £804k.
Strategy update
The Group continues to deliver against the three pillars of its strategic
plan, which was announced at the end of FY2019:
Strategy Update
Phase 1: Stabilising and improving performance Simplify the Group structure, improving leadership capability, strengthen Subject to ongoing continuous improvements, this phase is complete having
commercial capability, cost reduction and efficiency improvements, safety and restructured the business into five divisions and appointed a new, and now
asset utilisation performance, and employee engagement activities. established, senior leadership team.
A business improvement plan is established, supported by strengthened
operational and functional specialists who are in post, to meet our growth
needs and improve our internal processes.
Phase 2: Developing foundations for growth Develop clear strategic plans for our core sectors of housing, infrastructure This phase is also substantially complete having increased our marketing and
and regional construction, improve customer relationships and tendering business development activity, expanded our bid pipeline and order book,
activity, maximise our integrated solutions offering, broaden our range of diversified our range of services in ground improvement and rail, acquired
products and services, and strengthen our balance sheet. ScrewFast, secured key strategic bids in highways and rail electrification,
and strengthened our balance sheet during the course of negotiating the
Covid-19 pandemic.
Phase 3: Establishing market leadership Sustainable growth as the Group benefits from strategic actions taken in The Group remains on track to achieve its published medium term financial
phases 1 and 2 and capitalises on opportunities presented by construction objectives, being: revenue growth of 5-10% per annum, underlying operating
market recovery. margins of 7-8% and return on capital employed of 15-20%.
ESG
The Group has continued to make progress on its strategic ESG activities.
Leadership groups for sustainability and social initiatives are now embedded
in the business and are developing frameworks and targets to track progress.
We have also added a new role to the executive team in January 2022 with a
primary responsibility for further development and delivery the Group's ESG
agenda. A further update on sustainability targets will be reported in the
published annual report for FY2022.
Dividend
The financial performance of the Group has improved significantly in the
current reporting period, and accordingly the Board has confirmed its
intention to reinstate dividend distributions, commencing with a final
dividend at the time of the full year results for FY2022. No interim dividend
is being declared at the time of these results.
Current trading and outlook
The exit rate from the end of the Period has carried positive trading momentum
into the second half of the financial year, with a growing number of
opportunities across all segments, including an increasing number of
opportunities within the Group's higher margin product mix offerings.
Rail enquiries and contract activity levels increased towards the end of the
Period, which has continued into the second half. Having undertaken ground
investigation works since mid-2021, work commenced on a follow-on contract for
piling and foundations for electrification of the Core Valley Lines as part of
the South Wales Metro Transformation, which we expect to continue throughout
2022. The Core Valley Lines is expected to be the first of a new generation of
electrification investment in the UK enabled by the Government's Integrated
Rail Plan including its commitments to decarbonise the railway network. Other
contract awards in the rail sector have resulted in high utilisation levels
over the Christmas period and our confidence in future opportunities is
underpinned by the investment in the third quarter in further specialised
road/rail equipment to meet expected future demand.
Across the Group, we continue to experience challenges from supply chain
issues, wage inflation, and short-term employee availability as a result of
the impact of the Omicron variant of Covid-19. Whilst employee availability
issues are expected to be a short-term impact only, supply chain issues and
wage inflation are expected to persist for the remainder of the financial year
and into FY2023.
The balance sheet remains strong with debt reduced further in the Period.
Capital outstanding on hire purchase contracts reduced to £2.7m (30 April
2021: £4.0m). We continue to maintain a stable cash position and an undrawn
debt facility of up to £11.0m. All capital expenditure in the Period has been
funded from cash resources, which includes £1.5m invested in new rigs, and
further commitments with delivery dates extending into FY2023.
The order book of £39.1m underpins the work to be delivered in the second
half of the year. Improved levels of demand across the core markets are
expected to remain strong for the remainder of the financial year and into
FY2023 and accordingly, the Board anticipates that trading for the full year
will be ahead of market expectations.
Mark Cutler
Chief Executive Officer
31 January 2022
Condensed consolidated statement of comprehensive income
6 months to 31 Oct 2021 (unaudited) 6 months to 12 months to 30 Apr 2021 (audited)
£'000 31 Oct 2020 (unaudited) £'000
Note £'000
Revenue 3 60,061 38,323 84,368
Cost of sales (42,967) (27,727) (62,365)
Gross profit 17,094 10,596 22,003
Administrative expenses (14,819) (11,071) (23,320)
Credit loss impairment charge (115) (82) (81)
Other operating income 125 120 597
Operating profit / (loss) 2,285 (437) (801)
Operating profit / (loss) before non-underlying items 2,285 (437) (706)
Non underlying items 4 - - (95)
Operating profit / (loss) 2,285 (437) (801)
Finance expense (368) (293) (607)
Finance income - 9 9
Profit / (loss) before tax 1,917 (721) (1,399)
Income tax (cost) / credit (448) 138 (13)
Profit / (loss) after tax and total comprehensive income/(loss) for the year 1,469 (583) (1,412)
attributable to shareholders of the parent
Earnings per share (pence)
Basic 5 1.4 (0.5) (1.3)
Diluted 5 1.4 (0.5) (1.3)
All amounts relate to continuing operations. There was no other comprehensive
income in either the current or preceding year.
Share based payments have been reclassified from 'non-underlying' to
'underlying' in the Period. The comparative periods have been restated to
reflect this reclassification.
Condensed consolidated statement of financial position
As at As at As at
31 Oct 2021 (unaudited) 31 Oct 2020 (unaudited) 30 Apr 2021 (audited)
£'000 £'000 £'000
Non-current assets
Property, plant and equipment 38,276 36,352 38,243
Investment property 815 829 820
Intangible assets 3,720 1,452 3,772
42,811 38,633 42,835
Current assets
Inventories 4,148 2,589 3,022
Trade and other receivables 33,109 19,535 32,038
Corporation tax receivable 84 - 84
Cash and cash equivalents 6,344 9,844 8,518
Assets classified as held for sale - 683 -
43,685 32,651 43,662
Total assets 86,496 71,284 86,497
Current liabilities
Trade and other payables 20,703 15,525 20,833
Loans and borrowings 49 - 230
Lease liabilities 2,723 3,264 3,110
Provisions 7,538 341 7,635
31,013 19,130 31,808
Non-current liabilities
Loan and borrowings 110 - 582
Deferred consideration 1,547 - 1,521
Lease liabilities 5,474 5,963 6,307
Deferred tax 2,742 1,452 2,294
9,873 7,415 10,704
Total liabilities 40,886 26,545 42,512
Net assets 45,610 44,739 43,985
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 29,037 28,166 27,412
Total equity 45,610 44,739 43,985
Condensed consolidated statement of cash flows
6 months to 31 Oct 2021 (unaudited) 6 months to 12 months to 30 Apr 2021 (audited)
£'000 31 Oct 2020 (unaudited) £'000
£'000
Cash flows from operating activities
Cash generated from operations 2,559 (756) 773
Income tax received / (paid) - 872 1,408
Net cash generated from operating activities 2,559 116 2,181
Cash flows from investing activities
Purchases of property, plant and equipment (2,203) (273) (2,135)
Disposal of property, plant and equipment 253 206 899
Disposal of assets held for sale - - 700
Acquisition of subsidiary, net of cash acquired - - (780)
Net cash absorbed in investing activities (1,950) (67) (1,316)
Cash flows from financing activities
Repayment of bank borrowings (654) - (12)
Principal paid on lease liabilities (1,762) (2,109) (3,930)
Interest paid on lease liabilities (314) (285) (553)
Interest paid on loans and borrowings (53) (8) (49)
Interest received - 9 9
Net cash absorbed in financing activities (2,783) (2,393) (4,535)
Net increase/(decrease) in cash and cash equivalents (2,174) (2,344) (3,670)
Cash and cash equivalents at beginning of year 8,518 12,188 12,188
Cash and cash equivalents at end of year 6,344 9,844 8,518
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 2020 2,133 8,633 5,807 28,671 45,244
(audited)
Total comprehensive income - - - (583) (583)
Share-based payment expense - - - 78 78
Balance at 31 October 2020 2,133 8,633 5,807 28,166 44,739
(unaudited)
Total comprehensive income - - - (829) (829)
Share-based payment expense - - - 75 75
Balance at 30 April 2021 2,133 8,633 5,807 27,412 43,985
(audited)
Total comprehensive income - - - 1,469 1,469
Share-based payment expense - - - 156 156
Balance at 31 October 2021 2,133 8,633 5,807 29,037 45,610
(unaudited)
Notes to the condensed consolidated interim financial statements
For the six months ended 31 October 2021
1. Basis of preparation
The unaudited interim consolidated statement of Van Elle Holdings plc is for
the six months ended 31 October 2021 and do 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 2022.
The comparative figures for the year ended 30 April 2021 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 2021
detailed forecasts were prepared. These forecasts reflected a continuation of
the post Covid-19 recovery and demonstrated a healthy cash flow and headroom
across the period to 31 August 2022. 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 in the last quarter of FY2021 have continued in H1
of FY2022 during which time the group has traded profitably. The Group's order
book has also grown in the period since 30 April 2021. A strong cash balance
of £6.3m remains at the end of the period and whilst cash has reduced in the
period, the Group reports a net funds position (excluding IFRS 16 property and
vehicle lease liabilities) of £3.7m at the period end. HP liabilities have
continued to reduce in the period with total HP liabilities of £2.7m at the
period end (£4.0m at 31 April 2021). Three CBILS loans, acquired as part of
the acquisition of ScrewFast Foundations Limited on 1 April 2021, were also
repaid early in the period. Total loans outstanding at the period end were
£0.2m (£0.8m at 31 April 2021). The £11m asset-based lending facility with
ABN AMRO remains undrawn at the period end.
As part of the interim going concern assessment, forecasts for the 12 months
ending January 2023 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 2021 are consistent with the
policies applied by the Group in its consolidated financial statements as at,
and for the year ended 30 April 2021.
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. All turnover and operations are based in
the UK.
Operating segments - 6 months to 31 October 2021
General Specialist Ground Head Total
Piling Piling & Rail Engineering Office £'000
£'000 £'000 Services £'000
£'000
Revenue 18,067 22,140 19,790 64 60,061
Other operating income - - - 125 125
Operating profit 898 1,646 1,208 (1,467) 2,285
Finance expense - - - (368) (368)
Profit before tax 898 1,646 1,208 (1,835) 1,917
Assets
Property, plant and equipment (including right of use assets) 8,285 12,852 8,300 8,839 38,276
Intangible assets 22 3,447 246 5 3,720
Inventories 1,691 1,323 1,116 18 4,148
Reportable segment assets 9,998 17,622 9,662 8,862 46,144
Investment property - - - 815 815
Trade and other receivables - - - 33,193 33,193
Cash and cash equivalents - - - 6,344 6,344
Total assets 9,998 17,622 9,662 49,214 86,496
Liabilities
Trade and other payables - - - 20,703 20,703
Provisions - - - 7,538 7,538
Loans & borrowings - - - 158 158
Deferred consideration - - - 1,547 1,547
Lease liabilities - - - 8,197 8,197
Deferred tax - - - 2,743 2,743
Total liabilities - - - 40,886 40,886
Other information
Capital expenditure 211 1,568 316 108 2,203
Depreciation/amortisation 571 956 592 462 2,581
There are no individual customers accounting for more than 10% of Group
revenue in either the current or preceding period.
Operating segments - 6 months to 31 October 2020
General Specialist Ground Head Total
Piling Piling Engineering Office £'000
£'000 & Rail Services £'000
£'000 £'000
Revenue 13,800 12,735 11,740 48 38,323
Other operating income - - - 120 120
Operating profit 163 799 (110) (1,289) (437)
Finance expense - - - (293) (293)
Finance income - - - 9 9
Profit before tax 163 799 (110) (1,573) (721)
Assets
Property, plant and equipment (including right of use assets) 8,628 10,699 7,234 9,791 36,352
Intangible assets 30 1,130 274 18 1,452
Inventories 1,084 643 847 15 2,589
Reportable segment assets 9,742 12,472 8,355 9,824 40,393
Investment property - - - 829 829
Trade and other receivables - - - 19,535 19,535
Cash and cash equivalents - - - 9,844 9,844
Assets classified as held for sale - - - 683 683
Total assets 9,742 12,472 8,355 40,715 71,284
Liabilities
Trade and other payables - - - 15,525 15,525
Provisions - - - 341 341
Lease liabilities - - - 9,227 9,227
Deferred tax - - - 1,452 1,452
Total liabilities - - - 26,545 26,545
Other information
Capital expenditure - - 176 97 273
Depreciation/amortisation 559 794 482 500 2,335
There are no individual customers accounting for more than 10% of Group
revenue in either the current or preceding period.
Operating segments - 12 months to 30 April 2021
General Specialist Ground Head Total
Piling Piling Engineering Office £'000
£'000 & Rail Services £'000
£'000 £'000
Revenue 27,340 29,345 27,596 87 84,368
Other operating income - - - 597 597
Underlying operating profit 295 1,035 247 (2,130) (553)
Share-based payments - - - (153) (153)
Other non-underlying items - - - (95) (95)
Operating profit 295 1,035 247 (2,378) (801)
Finance expense - - - (607) (607)
Finance income - - - 9 9
Profit before tax 295 1,035 247 (2,976) (1,399)
Assets
Property, plant and equipment (including right of use assets) 8,496 12,405 8,031 9,311 38,243
Intangible assets 26 3,476 262 8 3,772
Inventories 984 1,208 810 20 3,022
Reportable segment assets 9,506 17,089 9,103 9,339 45,037
Investment property - - - 820 820
Trade and other receivables - - - 32,122 32,122
Cash and cash equivalents - - - 8,518 8,518
Total assets 9,506 17,089 9,103 50,799 86,497
Liabilities
Trade and other payables - - - 20,833 20,833
Provisions - - - 7,635 7,635
Loans and borrowings - - - 812 812
Deferred consideration - - - 1,521 1,521
Lease liabilities - - - 9,417 9,417
Deferred tax - - - 2,294 2,294
Total liabilities - - - 42,512 42,512
Other information
Capital expenditure 96 1,154 2,231 203 3,685
Depreciation/amortisation 1,152 1,601 1,137 1,087 4,978
There are no individual customers accounting for more than 10% of Group
revenue in either the current or preceding year.
3. Revenue from contracts with customers
Disaggregation of revenue - 6 months to 31 October 2021
End market General Specialist Ground Head Total
Piling Piling & Rail Engineering Office £'000
£'000 £'000 Services £'000
£'000
Residential 5,420 3,678 16,636 - 25,734
Infrastructure 3,916 15,958 1,956 - 21,830
Regional construction 8,731 2,392 1,198 - 12,321
Other - 112 - 64 176
Total 18,067 22,140 19,790 64 60,061
Disaggregation of revenue - 6 months to 31 October 2020
End market General Specialist Ground Head Total
Piling Piling & Rail Engineering Office £'000
£'000 £'000 Services £'000
£'000
Residential 4,500 2,700 9,836 - 17,036
Infrastructure 3,824 8,655 1,170 - 13,649
Regional construction 5,454 1,380 732 - 7,566
Other 22 - 2 48 72
Total 13,800 12,735 11,740 48 38,323
Disaggregation of revenue - 12 months to 30 April 2021
End market General Specialist Ground Head Total
Piling Piling & Rail Engineering Office £'000
£'000 £'000 Services £'000
£'000
Residential 8,009 6,275 23,012 - 37,296
Infrastructure 6,765 19,302 2,396 - 28,463
Regional construction 12,602 3,768 2,112 - 18,482
Other 37 - 3 87 127
Total 27,413 29,345 27,523 87 84,368
Contract assets
6 months to 6 months to 12 months to
31 Oct 2021 31 Oct 2020 30 Apr 2021
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
As at 1 May 1,651 1,258 1,258
Transfers from contract assets to trade receivables (1,651) (1,258) (1,258)
Excess of revenue recognised over invoiced 1,997 2,179 1,651
Impairment of contract assets - - -
As at 31 October / 30 April 1,997 2,179 1,651
Contract liabilities
6 months to 6 months to 12 months to 30 Apr 2021 (audited)
31 Oct 2021 (unaudited) 31 Oct 2020 (unaudited) £'000
£'000 £'000
As at 1 May 284 228 228
Interest on contract liabilities - - -
Contract liabilities recognised as revenue in the period (84) (28) (28)
Deposits received in advance of performance 49 57 84
As at 31 October / 30 April 249 257 284
4. Other non-underlying items
6 months to 6 months to 12 months to
31 Oct 2021 (unaudited) 31 Oct 2020 (unaudited) 30 Apr 2021 (audited)
£'000 £'000 £'000
Exceptional costs - - 95
Exceptional costs for the year ending 31 April 2021 relate to the acquisition
costs for the purchase of ScrewFast Foundations Limited on 1 April 2021.
5. 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 2021 (audited)
31 Oct 2021 (unaudited) 31 Oct 2020 (unaudited)
Basic weighted average number of shares 106,667 106,667 106,667
£'000 £'000 £'000
Profit/(loss) for the period 1,469 (583) (1,412)
Add back/(deduct):
Non-underlying items - - 95
Tax effect of the above - - -
Underlying Profit/(loss) for the period 1,469 (583) (1,317)
Pence Pence Pence
Earnings per share
Basic 1.4 (0.5) (1.3)
Diluted 1.4 (0.5) (1.3)
Basic - excluding non-underlying items 1.4 (0.5) (1.2)
Diluted - excluding non-underlying items 1.4 (0.5) (1.2)
There is no dilutive effect of the share options as the performance conditions
remain unsatisfied or the share price was below the exercise price.
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.
The underlying earnings per share is based on profit adjusted for
non-underlying items, net of tax, and on the same weighted average number of
shares used in the basic earnings per share calculation above. The Directors
consider that this measure provides an additional indicator of the underlying
performance of the Group.
6. Cash generated from operations
6 months to 6 months to 12 months to
31 Oct 2021 31 Oct 2020 30 Apr 2021
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Operating profit 2,285 (437) (801)
Adjustments for:
Depreciation of property, plant and equipment 2,487 2,269 4,844
Amortisation of intangible assets 53 66 125
Depreciation of investment property - - 9
(Profit)/loss on disposal of property, plant and equipment 2 11 (272)
Share-based payment expense 156 78 153
Operating cash flows before movement in working capital 4,983 1,987 4,058
(Increase)/decrease in inventories (1,126) 113 869
(Increase)/decrease in trade and other receivables (1,071) (6,902) (10,688)
(Decrease)/increase in trade and other payables (130) 3,946 6,437
Increase/(decrease) in provisions (97) 100 97
Cash generated from operations 2,559 (756) 773
7. Analysis of cash and cash equivalents and reconciliation to net debt
As at As at As at
31 Oct 2021 (unaudited) 31 Oct 2020 (unaudited) 30 Apr 2021
£'000 £'000 (audited)
£'000
Cash at bank 6,303 9,808 8,480
Cash in hand 41 36 38
Cash and cash equivalents 6,344 9,844 8,518
Loans and borrowings (159) - (812)
Lease liabilities (8,197) (9,227) (9,417)
Net funds/(debt) (2,012) 617 (1,711)
Net funds/(debt) excl. IFRS 16 property and vehicle lease liabilities 3,479 4,547 3,703
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