TIDMVANL
RNS Number : 8944O
Van Elle Holdings PLC
04 June 2020
4 June 2020
Van Elle Holdings plc
("Van Elle", the "Company" or the "Group")
AIM: VANL
Trading update and appointment of Chairman designate
Van Elle Holdings plc, the UK's largest ground engineering
contractor, today provides an update on the outturn for the year
ended 30 April 2020, its operational response to Covid-19 and
financial position ahead of publishing the report and accounts for
the year ended 30 April 2020 ('FY 2020'), in late August 2020.
In addition, the Group is also pleased to announce the
appointment of Frank Nelson as a Non-Executive Director and Chair
designate with effect from 1 July 2020.
Performance in the year ended 30 April 2020
Market conditions during April were consistent with the Board's
revised planning assumptions and reflected the closure of many
customer sites, particularly across the housing and regional
construction sectors, together with considerable supply chain and
logistical disruption. As a result, trading in April was within the
range of scenarios outlined at time of the Group's announcement of
9 April 2020 (the 'April Update'), with revenues at approximately
20% of pre Covid-19 forecast levels.
Group revenues for the year were down approximately 4% compared
to FY 2019 at approximately GBP85 million, but 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.
Current trading
Whilst the Board does not yet believe it is appropriate to
reinstate financial guidance for the year to April 2021, it is
pleased to report that, following Government guidance regarding a
return to work across the wider construction sector, customer
activity levels within the Group are beginning to increase. As 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.
The Group is fully complying with the Government's Covid-19
Secure guidance to ensure the continued wellbeing of its staff and
other site workers and has commenced the return of staff from
furlough in line with the return in customer demand.
Alongside managing the re-mobilisation of its operations, the
Group has maintained a close dialogue with customers to progress
its commercial pipeline. The Group's order book at 31 April 2020
remains in line with the half year position at GBP31.7m (31 October
2019: GBP31.9m) although enquiry levels have reduced by circa 20%
compared to previous levels.
Whilst the Board expects that it will still take time for new
project starts to gather momentum in some sectors, the Group is
encouraged by developments in its targeted infrastructure markets.
These include the confirmation of Notice to Proceed on phase one of
High Speed 2 and the announcement of partner contracts on Highways
England's Smart Motorways Alliance. The Group is therefore pleased
to have achieved preferred bidder status for its first contract on
High Speed 2 and to be recently appointed to two of the three
regions on Highways England's new four-year ground investigation
framework, both of which are expected to commence during the first
half of the financial year.
Financial position & liquidity
As a result of the decisive actions taken to conserve cash and
manage liquidity, including ongoing self-help actions and
participation in a range of Government schemes, the Group's cash
performance has been ahead of the Board's expectations at the time
of the April Update .
The Group has a significantly strengthened balance sheet
following the successful equity capital raise, announced on 9 April
2020, which raised gross proceeds of GBP6.7m. As at 31 May 2020,
the Group had cash balances of approximately GBP12 million, having
repaid its GBP0.9 million remaining term loan with Lloyds Bank,
which was due for repayment in August 2020. The cash balance is
enhanced by the deferral of some GBP1.4m of PAYE payments to
HMRC.
The Group is progressing discussions with existing and potential
lenders to put in place additional debt facilities as part of its
long-term capital structure strategy and expects this process to be
concluded in August 2020. The Board remains confident that it has
sufficient financial stability and liquidity to respond quickly as
the markets recover, building a platform from which to progress its
longer-term strategic ambitions.
Appointment of new Chair and Board Update
Following the announcement in February that Adrian Barden will
not be seeking re-election as Chair at the next AGM, the Board is
delighted to announce the appointment of Frank Nelson as a new
Non-Executive Director and Chair designate from 1 July 2020,
assuming the role of Chair following the release of the FY 2020
results.
Frank is currently the Senior Independent Director for three
quoted companies: McCarthy & Stone plc, HICL Infrastructure PLC
and Eurocell plc, and the chair of PE backed contractor and
developer DSM SFG Group Holdings Limited. He was previously a
Non-executive Director at Telford Homes Plc and formerly the Chief
Financial Officer of Galliford Try plc.
Further information on Frank is set out at the end of this
announcement.
It was also previously announced that Robin Williams would step
down from the Board at the end of July 2020 following the release
of the FY 2020 results. Due to the revised results timetable set
out below, Robin has agreed to remain as Non-executive Director and
Chairman of the Audit Committee until late August 2020.
Preliminary results timetable
In light of the practical challenges presented by the current
situation, the Group is running an extended audit timetable this
year, with the preliminary results expected to be announced in late
August 2020 and the annual general meeting in late September
2020.
Mark Cutler, Chief Executive, commented:
"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.
I would also like to warmly welcome Frank to the Board as our
Chair designate."
ENDS
Enquiries:
Van Elle Holdings plc Tel: 01773 580 580
Mark Cutler
Graeme Campbell
Peel Hunt LLP (Nominated Adviser and Tel: 020 7418 8900
corporate broker)
Mike Bell
Ed Allsopp
Instinctif Partners (Financial Public Tel: 020 7457 2020
Relations)
Mark Garraway
James Gray
Rosie Driscoll
Disclosures required by Schedule Two, paragraph (g) of the AIM
Rule for Companies in relation to the appointment of Francis
(Frank) Eamon Nelson, aged 68, as Non-Executive Director:
Current directorships Directorships held in the last
five years
DSM SFG Group Holdings Limited McCarthy & Stone (Developments)
Limited
Eurocell plc McCarthy & Stone Retirement Lifestyles
Limited
HICL Infrastructure PLC Telford Homes Limited
McCarthy & Stone plc
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END
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