Friday, July 3, 2020

Pre-tax loss expected at Van Elle as COVID-19 bites

Van Elle, the Nottinghamshire-based ground engineering contractor, is expecting to report an underlying pre-tax loss for the year ended 30 April 2020.

In a trading update the company noted that trading in April saw revenues at approximately 20% of pre COVID-19 forecast levels, reflecting the closure of customer sites and considerable supply chain and logistical disruption.

Group revenues for the year were down approximately 4% compared to FY 2019 at £85 million, but the firm said the “significant, adverse impact of the COVID-19 outbreak on the final six weeks of the year impacted FY 2020 profitability such that, subject to audit, the Board expects to report an underlying pre-tax loss for the year.”

The business has highlighted that it does not yet believe it is appropriate to reinstate financial guidance for the year to April 2021, but reports that, following Government guidance regarding a return to work across the wider construction sector, customer activity levels within the group are beginning to increase.

At 1 June 2020, approximately 30-40% of projects had resumed across the Housing and General Piling divisions, whilst the Specialist Piling, Rail and Geotechnical divisions are operating at approximately 60-70% of pre COVID-19 levels due to greater exposure to infrastructure sector activity.

Meanwhile the firm’s order book at 31 April 2020 remains in line with the half year position at £31.7m (31 October 2019: £31.9m) although enquiry levels have reduced by 20% compared to previous levels.

In the update Van Elle also revealed that it has achieved preferred bidder status for its first contract on High Speed 2 and was recently appointed to two of the three regions on Highways England’s new four-year ground investigation framework.

Mark Cutler, Chief Executive, said: “It is encouraging to see a gradual return to work underway across our markets. We hope to see this trend continue in the coming weeks and are working with customers to support their plans. Thanks to the actions taken to preserve cash and the commitment of our employees, we are in a strong position to manage the return to activity.

“Having been able to retain our market leading capabilities and with a strengthened financial position, we are well-placed to benefit from significant opportunities as construction markets recover and new major infrastructure investment programmes commence.”

Cutler also welcomed Frank Nelson’s appointment as a new Non-Executive Director and Chair designate.

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