Van Elle has said that it is progressing with a full review of the business as it revealed that a quiet first quarter had hit revenues reported in its accounts for the first six months of its financial year published today.
According to the report, Van Elle’s revenues for the six months to 31 October 2018 were down to £42.9M, compared to £52.6M for the same period last year and concerns over third quarter activity has led it to downgrade expectations for the full year.
The company also reported that underlying operating profit reduced 47.4% to £3M which it said largely reflects lower overhead recovery.
Van Elle said that the board remains positive regarding sustainable, profitable growth in the long term. However, although it expects overall to deliver a stronger performance in the second half of its financial year, delays to contract start dates and lower profitability in its piling division in the third quarter have led it to “re-assess workload forecasts for H2”.
The company said that “it is prudent to reduce its revenue expectation for the current year”.
The business appeared to be positive about the fourth quarter though and said it “saw strong demand for its specialist services division over the Christmas period” and that the orderbook at the start of this year is at similar levels to that seen in 2018.
Van Elle said that CEO Mark Cutler, who joined the business in August last year, implemented a full review of the business and has already taken steps to simplify the company’s divisional structure, strengthen the leadership team and improve customer engagement and operational delivery.
Cutler said: “First half results were in line with our revised expectations and reflected the improved performance in the second quarter after a quiet start to the year.
“This is a transitional year for the business and since my arrival in August 2018, I have been undertaking a full review of the business. As part of this process I have been taking action to refine the group’s commercial approach, streamline operations, strengthen the leadership team and re-focus on our key customers. This is already creating a strong platform from which to pursue our growth strategy.
“The third quarter has been more challenging than we anticipated, with a disappointing performance in General Piling and several project delays. As a result, and despite good momentum being carried in from the first half, we don’t believe we will be able to deliver the significant step up in performance during the second half that we anticipated at the time of our trading statement in December 2018.
“These challenges have been frustrating, but it is pleasing to see outlook for the final quarter remaining robust and with a strong pipeline of target projects providing good forward visibility.
“While we are mindful of the wider market environment, we are confident that the initiatives we are taking will develop a strong platform for future strong, profitable growth.”