TIDMVANL
RNS Number : 6539V
Van Elle Holdings PLC
25 July 2018
Van Elle Holdings plc
For Immediate Release 25 July 2018
Preliminary Results for the year ended 30 April 2018
Van Elle Holdings plc (the "Group"), the AIM listed geotechnical
contractor offering a wide range of ground engineering techniques
and services to customers in a variety of UK construction end
markets, announces its preliminary results for the year ended 30
April 2018.
Highlights
Year ended Year ended Growth %
30 April 2018 30 April 2017
------------------------------------ --------------- --------------- ---------
Revenue (GBPm) 103.9 94.1 10.4
Underlying* Operating Profit
(GBPm) 11.1 11.6 (4.0)
Reported Operating Profit (GBPm) 9.7 9.7 -
Underlying* profit before taxation
(GBPm) 10.6 11.1 (4.5)
Reported profit before taxation
(GBPm) 9.2 9.3 (1.2)
Underlying* earnings per share
(p) 10.6 12.1 (12.4)
Reported earnings per share
(p) 9.2 9.8 (6.1)
Dividend per share (p) 3.70 2.60 42.3
Operating cash conversion (%) 85.9% 91.9%
Return on capital employed
(%) 20.5% 25.7%
------------------------------------ --------------- --------------- ---------
* before share-based payment expenses, Carillion bad debt and
exceptional costs
Strategic and operational highlights
-- Group revenue increased by 10.4% to GBP103.9m (2017:
GBP94.1m), driven by activity in new housing and infrastructure
sectors
-- Underlying operating profit was down 4% to GBP11.1m (2017:
GBP11.6m), reflecting contract specific issues in the rail and
ground stabilisation units together with challenging market
conditions in H2
-- Completed major new rig investment programme with fleet increasing from 111 to 123 rigs
-- Strong balance sheet with net debt at 30 April 2018 of
GBP5.9m (2017: GBP1.5m), representing 0.4x EBITDA
-- CEO succession process complete, with Mark Cutler to start in August 2018
-- The Board is recommending a final dividend of 2.3p per share
(total dividend of 3.7p per share) reflecting its confidence in the
long-term prospects of the Group
Adrian Barden, Chairman, commented:
"Following the challenging conditions experienced at the start
of 2018, recovery has been slow in a number of our end markets
which has resulted in a relatively quiet first quarter for the
Group as a whole.
"However, we are seeing an increase in opportunities across each
of our divisions, particularly in the housebuilding and
infrastructure markets. We continue to monitor conditions in our
core markets actively and whilst mindful of the current conditions,
we are cautiously optimistic about the Group's prospects, being
well positioned to deliver further value to shareholders in the
medium term.
"The year to 30 April 2019 will be an important one of
transition for the Group, with our new CEO, Mark Cutler, joining
the Board in a few weeks' time. As a leader in the UK geotechnical
engineering market, Van Elle has established a strong platform from
which to pursue its growth strategy. In the near term the Board is
focussed on refining the Group's commercial approach, continuing to
enhance its processes and operations and maximising the returns
from the substantial investment in the rig fleet."
For further information please contact:
Instinctif Parters (Financial Public Tel: 020 7457 2020
Relations)
Mark Garraway
James Gray
Rosie Driscoll
Peel Hunt LLP (Nominated Adviser and Tel: 020 7418 8900
corporate broker)
Charles Batten
Mike Bell
Justin Jones
Chairman's statement
Following a good overall performance in the first half of the
year, the second half was significantly impacted by a number of
factors including the liquidation of Carillion in January 2018, the
disruption caused by the severe weather experienced in the UK
between January and March 2018 and the delay of a small number of
important contracts in Q4. In spite of this, the Group delivered
record turnover for the fifth consecutive year, with year on year
growth of 10.4% to GBP103.9m. This is testament to the robustness
of our diversified business model, targeted at growth markets where
there is sustainable demand for our services and the housebuilding
and infrastructure revenues support this strategy.
Gross profit in the year grew by 2.2% to GBP34.4m (2017:
GBP33.4m) with the margin reducing by approximately 2 percentage
points to 33.1% (2017: 35.5%). This margin reduction was
principally due to the adverse impact of two rail contracts
undertaken in H1 and a loss-making contract in the Ground
Engineering Services division. Additional, robust internal risk
controls have been introduced so that we identify and understand
all our risk starting at the bidding stage and applying rigorous
management and monitoring of contract performance to ensure that
the circumstances resulting in each of these situations do not
occur again. Underlying operating profit reduced slightly to
GBP11.1m (2017: GBP11.6m), with reported operating profit for the
year flat at GBP9.7m (2017: GBP9.7m). Whilst underlying operating
margins remained reasonable at 10.7%, this was below prior year
(12.3%) and largely reflects the lower gross margin as well as the
impact of the weaker than expected second half revenue.
Delivering the strategy
We continue to invest in the strategic development of the Group,
driven by our focus on growth markets and enabled by targeted
investment in specialist rigs, further expansion of our precast
concrete manufacturing capabilities and establishing ourselves as
the dominant ground engineering company in the central belt of
Scotland. We opened a sales office in London during the year and
have increased the coverage of our business development team with
new roles covering London, the South East and also the South West
of England, complementing our existing coverage across the UK.
Capital investment has been central to this development with a
further GBP13.2m spent in the current year bringing the total to
GBP45.1m over the last four years. Our rig fleet now stands at 123
rigs (2017: 111 rigs) and we believe that Van Elle has the broadest
and most modern range of specialist piling rigs in the market. Our
rig fleet expansion investment is largely complete for now and
provides a strong platform for our future growth.
We have continued to grow the business by broadening our range
of products and services and extending our geographical footprint
into high-growth markets. This is being achieved organically but
our strategy is to complement this with bolt-on acquisitions. We
retain a strong balance sheet and will continue to pursue
acquisition opportunities where appropriate.
Operating performance
General Piling has seen modest sales growth in the year, up 0.5%
to GBP43.1m (2017: GBP42.9m), a result of good demand in the
housebuilding sector offset by reduced demand for industrial and
commercial work. In addition, the Division successfully delivered
several infrastructure contracts using the three new, large
diameter piling rigs which have provided a further competitive
advantage to the Group. Divisional gross margin remained strong at
35.1% (2017: 33.1%), reflecting the Group's ability to deliver a
large number of contracts across a broad range of end markets,
achieving good returns through its long-standing and effective
operational model.
Sales were marginally lower in Specialist Piling at GBP29.9m
(2017: GBP30.1m). The restricted access business had a very strong
second half to the last financial year, including the delivery of
its largest ever contract at Eden Brows, and with a small number of
important contracts being delayed in the fourth quarter it was
unable to replicate that performance this year. The rail business
was significantly impacted by the collapse of Carillion and
although satisfactory terms were agreed to recommence some of the
halted contracts this only had a limited benefit in the second
half. Outside of work with Carillion, the rail business had a
relatively successful second half including the commencement of a
track bed stabilisation contract. Gross margin delivered was down
on last year at 41.3% (2017: 43.8%), largely reflecting the impact
of the two rail contracts in the first half of the year with
operating margins further effected by the weaker turnover
performance in the second half.
We saw a particularly strong revenue performance in Ground
Engineering Services, up 64.8% to GBP17.5m (2017: GBP10.6m). This
has been driven by our investment in servicing the burgeoning local
Scottish market which has established Van Elle as the dominant
ground engineering company in the central belt of Scotland and
demonstrates our ability to penetrate new markets with our leading
service offering. In addition, the Geotechnical business has been
re-branded as Strata to differentiate site investigation work from
the Group's other services which the Board believes will open up
further growth opportunities with consultants, developers and
competitors. Despite the strong turnover performance, gross margins
fell to 25.7% (2017: 37.7%) due to a loss-making contract delivered
in the Ground Stabilisation operating unit during the year. Actions
have been taken to ensure the issues that caused this do not
repeat.
Ground Engineering Products has increased its sales by 27.9% to
GBP13.4m (2017: GBP10.4m), boosted by our increased manufacturing
capabilities through the addition of the Scottish facility and
coupled with strong demand for our Smartfoot(R) modular beam
foundation system from the housebuilding sector. Gross margin was
delivered at 25.4% (2017: 26.2%), the dilution down to the sales
mix between Smartfoot(R) beams and pre-cast piles for internal use,
each of which have different manufacturing gross margins.
In terms of our performance in the Group's key end markets,
sales to the housebuilding sector were up 22.1% to GBP51.9m (2017:
GBP42.5m) and infrastructure sector were up 11.9% to GBP32.3m
(2017: GBP28.9m). Sales to the commercial and industrial sector
fell by 13.1% to GBP16.4m (2017: GBP18.8m). Our flexibility to
redirect resources to reflect short-term trends in our markets is a
key strength of the business, mitigating the impact of a slowdown
in any one sector.
Dividend
The Board has adopted a progressive dividend policy and, having
paid an interim dividend of 1.40p, is recommending a final dividend
of 2.30p (2017: 1.75p), making a total of 3.70p (2017: 2.60p) for
the financial year and reflects the Board's continued confidence in
the long term prospects for the Group. If approved, the final
dividend will be paid on 28 September 2018 to those shareholders on
the register as at 6 September 2018.
Board and governance
On behalf of the Board, I would like to express our thanks to
Jon Fenton who, due to a serious medical matter within his close
family, stepped down as CEO and left the Company on 18 May 2018.
Jon steered the Company through a successful period of growth,
culminating in the IPO in October 2016, and we wish him well for
the future.
I am very pleased to announce that, following a detailed
process, Mark Cutler is joining the Board to succeed Jon as Chief
Executive Officer during August 2018. Mark has considerable sector
experience at CEO level, and we look forward to him bringing this
experience to Van Elle.
Also in the year we welcomed David Hurcomb as Non-Executive
Director. David started on 1 November 2017 and he is Chair of the
Remuneration Committee.
As a board, we are committed to promoting highest standards of
corporate governance and ensuring effective communication with
shareholders. We intend to apply the Quoted Companies Alliance
Corporate Governance Code, complemented by applying other suitable
governance as far as it is appropriate for a company of its
size.
People
Van Elle has an outstanding group of employees and we continue
to place great importance on their engagement. Our objective is to
provide opportunities for development, personal growth and
successful careers with the Company.
Outlook
Following the challenging conditions experienced at the start of
2018, recovery has been slow in a number of our end markets which
has resulted in a relatively quiet first quarter for the Group as a
whole.
However, we are seeing an increase in opportunities across each
of our divisions, particularly in the housebuilding and
infrastructure markets. We continue to monitor conditions in our
core markets actively and, whilst mindful of the current
conditions, we are cautiously optimistic about the Group's
prospects, being well positioned to deliver further value to
shareholders in the medium term.
The year to 30 April 2019 will be an important one of transition
for the Group, with our new CEO, Mark Cutler joining in August. As
a leader in the UK geotechnical engineering market, Van Elle has
established a strong platform from which to pursue its growth
strategy. In the near term the Board is focussed on refining the
Group's commercial approach, continuing to enhance its processes
and operations and maximising the returns from the substantial
investment in the rig fleet.
Mark and I look forward to updating shareholders on our
continuing progress at the Annual General Meeting on 18 September
2018.
Adrian Barden
Non-Executive Chairman
25 July 2018
Financial Review
Revenue
Revenue for the year ended 30 April 2018 was GBP103.9m (2017:
GBP94.1m), which represented an increase of 10.4%.
2018 2017 Change 2018 2017
GBP'000 GBP'000 % % %
--------- --------- --------- ------- ------ ------
H1 52,642 43,126 22.1 50.7 45.8
H2 51,230 50,967 0.5 49.3 54.2
--------- --------- --------- ------- ------ ------
Revenue 103,872 94,093 10.4 100.0 100.0
--------- --------- --------- ------- ------ ------
Group results are usually seasonally weighted to H2 due to work
patterns over the Christmas and Easter holiday periods,
particularly in the infrastructure sector. However, this year the
H1 performance was marginally ahead of H2, with H2 being impacted
by the demise of Carillion and subsequent delays in recommencing
work on contracts that were being delivered at the time of the
company's liquidation. Additionally, there was lost productive time
and contract delays resulting from the severe weather disruption
during January, February and March and the delay of a small number
of important contracts in Q4. Furthermore, the prior year's
seasonal weighting reflected a very strong Q3 that saw delivery of
the Eden Brows contract for GBP5.4m, alongside an active rail
sector.
Our strategy is to direct our resources and investment into
growth markets and, by tracking enquiry levels by end market, this
acts as a barometer for identifying trends and targeting our
activities into the growth areas. The mix of revenue by end markets
is shown below:
2018 2017 Change 2018 2017
GBP'000 GBP'000 % % %
---------------- --------- --------- ------- ------ ------
Housebuilding 51,884 42,504 22.1 49.9 45.2
Infrastructure 32,343 28,906 11.9 31.1 30.7
Commercial and
industrial 16,357 18,814 (13.1) 15.7 20.0
Public sector 2,149 3,171 (32.2) 2.1 3.4
Other 1,139 698 63.2 1.1 0.7
---------------- --------- --------- ------- ------ ------
Revenue 103,872 94,093 10.4 100.0 100.0
---------------- --------- --------- ------- ------ ------
New housing and infrastructure continued to generate growth with
strong revenues in this year's sales mix buoyed by the healthy
housing market and the Government's investment in the country's
infrastructure networks. The commercial and industrial revenues
fell year on year which the Board believes is reflective of more
difficult conditions in those markets generally.
The mix of revenue by our divisions is shown below:
2018 2017 Change 2018 2017
GBP'000 GBP'000 % % %
------------------------- --------- --------- ------- ------ ------
General Piling 43,124 42,905 0.5 41.5 45.6
Specialist Piling 29,887 30,126 (0.8) 28.8 32.0
Ground Eng'ing Services 17,502 10,621 64.8 16.8 11.3
Ground Eng'ing Products 13,359 10,441 27.9 12.9 11.1
------------------------- --------- --------- ------- ------ ------
Revenue 103,872 94,093 10.4 100.0 100.0
------------------------- --------- --------- ------- ------ ------
The changing mix reflects our focus on growth markets as well as
our ability to focus resources where we feel the best opportunities
lie. We have targeted investment into several specialist rigs and
equipment during the year.
Our investment in our production capabilities has increased our
capacity to meet demand from the housebuilders for Smartfoot(R)
modular beams and internal demand for precast piles, the latter
reducing our reliance on the supply chain. The returns can be seen
in our growth in Ground Engineering Products revenues.
Operating profit
The revenue performance has translated into operating profit for
the year ended 30 April 2018 of GBP9.7m (2017: GBP9.7m).
2018 2017 Change
GBP'000 GBP'000 %
----------------------------- --------- --------- -------
Operating profit 9,710 9,705 0.0
----------------------------- --------- --------- -------
Underlying operating margin 10.7% 12.3%
Operating margin 9.3% 10.3%
----------------------------- --------- --------- -------
The Board believes that the underlying performance measures for
operating profit and EPS, stated before the deduction of
exceptional items, the Carillion bad debt charge and share-based
payment expenses, gives a clearer indication of the actual
performance of the business in terms of comparable year on year
operational delivery.
During the year, exceptional items of GBP283,000 were incurred
in respect of: legal and other professional costs associated with
the EGM held on 15 December 2017 and an aborted acquisition
Net finance costs
Net finance costs were GBP536,000 (2017: GBP422,000) and
interest was covered 18.1 times (2017: 23.0 times). The increase in
costs reflects the targeted capital investment expenditure over the
last couple of years funded by hire purchase lease contracts. The
hire purchase contracts are at fixed rates of interest and normally
for a five-year term.
Taxation
The effective tax rate for the year was 18.9% (2017: 19.9%).
The Group paid GBP1,768,000 (2017: GBP2,281,000) of corporation
tax during the year.
Dividends
The Board has adopted a progressive dividend policy. On 7 March
2018, the Company paid an interim dividend of 1.4p per share. The
Board is now recommending a final dividend of 2.3p per share making
a total dividend of 3.7p per share for the financial year.
Subject to approval at our Annual General Meeting of
shareholders on 18 September 2018, the recommended final dividend
will be paid on 28 September 2018 to shareholders who are on the
register on 6 September 2018.
Earnings per share
The underlying basic earnings per share was 10.6p (2017: 12.1p),
based on underlying earnings of GBP8,516,000 (2017: GBP9,125,000).
Underlying earnings are stated after adding back GBP283,000 of
exceptional costs, Carillion bad debt write-off of GBP956,000, and
GBP148,000 of share-based payment expenses.
Capital structure and allocation
The Group's capital structure is kept under constant review,
taking account of the need for, and the availability and cost of,
various sources of finance.
The Group's objective is to deliver long-term value to its
shareholders whilst maintaining a balance sheet structure that
safeguards the Group's financial position through economic cycles.
In this context, the Board has established clear priorities for the
use of capital. In order of priority these are:
-- to fund profitable organic growth opportunities;
-- to finance bolt-on acquisitions that meet the Group's investment criteria;
-- to pay ordinary dividends at a level which allows dividend growth through the cycle; and
-- where the balance sheet allows, to deploy funds for the
benefit of shareholders in the most appropriate manner.
Balance sheet summary
2018 2017
GBP'000 GBP'000
------------------------------------ --------- ---------
Fixed assets (including intangible
assets) 41,826 34,440
Net working capital 7,437 5,337
Net debt (5,905) (1,458)
Taxation and provisions (1,992) (1,998)
------------------------------------ --------- ---------
Net assets 41,366 36,321
------------------------------------ --------- ---------
The Group has increased net assets by GBP4.8m to GBP41.1m (2017:
GBP36.3m) during the year. This increase is partly due to the issue
of shares on IPO, raising net funds of GBP8.8m to finance future
acquisitions, and the balance is retained profit from robust
underlying trading for the year.
The Group continued to invest in specialist rigs to drive growth
in our chosen markets, as well as continuing to invest in our
facilities with capital expenditure of GBP13.2m (2017: GBP11.8m) in
the year and a corresponding annual depreciation charge of GBP5.7m
(2017: 4.7m). The Group also continues to invest in the maintenance
of its fleet to ensure rigs function well over the long term. As a
result, residual values on second hand sales have been higher than
those implied by the Group's depreciation policy and the Board will
review this in the coming year.
The ROCE has decreased in the period to 23.5% at 30 April 2018
(2017: 30.6%).
Analysis of net debt
2018 2017
GBP'000 GBP'000
--------------------------- --------- ---------
Bank loans (1,125) (1,275)
Other loans (109) (205)
Finance leases (15,551) (12,836)
--------------------------- --------- ---------
Total borrowings (16,785) (14,316)
Cash and cash equivalents 10,880 12,858
--------------------------- --------- ---------
Net debt (5,905) (1,458)
--------------------------- --------- ---------
Net debt has increased by GBP4.4m to GBP5.9m at 30 April 2018,
reflecting the net cash outflow from the impact of the liquidation
of Carillion on cash collections and the movement in hire purchase
obligations in support of 2018 capital investment.
Return on capital employed
Underlying ROCE has reduced year on year from 30.6% to 23.5%,
largely reflecting the additional GBP13.2m capital expenditure
investment during the year which did not contribute to earnings for
the whole 12 month period. Capital expenditure over the short term
is forecast to reduce significantly as our expansion investment
programme is nearing completion, which should bring an improvement
in ROCE in due course.
Cash flow summary
2018 2017
GBP'000 GBP'000
------------------------------------------- --------- ---------
Operating cash flows before working
capital 15,417 14,380
Working capital movements (2,173) (1,251)
------------------------------------------- --------- ---------
Cash generated from operations 13,244 13,129
Net interest paid (536) (422)
Income tax paid (1,768) (2,281)
------------------------------------------- --------- ---------
Net cash generated from operating
activities 10,758 10,426
Capital expenditure (4,732) (5,495)
Financing activities (8,186) 4,326
------------------------------------------- --------- ---------
Net increase in cash and cash equivalents (1,978) 9,257
The Group has always placed a high priority on cash generation
and the active management of working capital. Cash generated from
operations was GBP13.2m (2017: GBP13.1m), representing an operating
cash conversion of 86% (2017: 92%).
Paul Pearson
Chief Financial Officer
25 July 2018
Consolidated statement of comprehensive income
For the year ended 30 April 2018
2018 2017
GBP'000 GBP'000
----------------------------------------------- --------- ---------
Revenue 103,872 94,093
Cost of sales (69,480) (60,712)
------------------------------------------------ --------- ---------
Gross profit 34,392 33,381
Administrative expenses (23,295) (22,018)
Other operating income - 200
------------------------------------------------ --------- ---------
Operating profit before exceptional costs and
share-based payment expense 11,097 11,563
Share-based payment expense (148) (77)
Carillion Bad Debt Write-off (956) -
Exceptional costs (283) (1,781)
------------------------------------------------ --------- ---------
Operating profit 9,710 9,705
Finance expense (561) (436)
Finance income 25 14
------------------------------------------------ --------- ---------
Profit before tax 9,174 9,283
Income tax expense (1,835) (1,930)
------------------------------------------------ --------- ---------
Total comprehensive income for the year 7,339 7,353
------------------------------------------------ --------- ---------
Earnings per share (pence)
Basic 9.2 9.8
Diluted 9.2 9.8
------------------------------------------------ --------- ---------
All amounts relate to continuing operations. There was no other
comprehensive income in either the current or preceding year.
Consolidated statement of financial position
As at 30 April 2018
2018 2017
GBP'000 GBP'000
------------------------------- --------- ---------
Non-current assets
Property, plant and equipment 39,502 32,110
Intangible assets 2,324 2,330
-------------------------------- --------- ---------
41,826 34,440
------------------------------- --------- ---------
Current assets
Inventories 2,565 2,423
Trade and other receivables 22,225 18,796
Cash and cash equivalents 10,880 12,858
-------------------------------- --------- ---------
35,670 34,077
------------------------------- --------- ---------
Total assets 77,496 68,517
-------------------------------- --------- ---------
Current liabilities
Trade and other payables 17,353 15,882
Loans and borrowings 5,580 4,461
Corporation tax payable 753 878
-------------------------------- --------- ---------
23,686 21,221
------------------------------- --------- ---------
Non-current liabilities
Loans and borrowings 11,205 9,855
Provisions 270 342
Deferred tax 969 778
-------------------------------- --------- ---------
12,444 10,975
------------------------------- --------- ---------
Total liabilities 36,130 32,196
-------------------------------- --------- ---------
Net assets 41,366 36,321
-------------------------------- --------- ---------
Equity
Share capital 1,600 1,600
Share premium 8,633 8,633
Retained earnings 31,115 26,070
Non-controlling interest 18 18
-------------------------------- --------- ---------
Total equity 41,366 36,321
-------------------------------- --------- ---------
Consolidated statement of cash flows
For the year ended 30 April 2018
2018 2017
GBP'000 GBP'000
---------------------------------------------- --------- ---------
Cash flows from operating activities
Cash generated from operations 13,244 13,129
Interest received 25 14
Interest paid (561) (436)
Income tax paid (1,768) (2,281)
----------------------------------------------- --------- ---------
Net cash generated from operating activities 10,940 10,426
----------------------------------------------- --------- ---------
Cash flows from investing activities
Purchases of property, plant and equipment (5,053) (5,562)
Disposal of property, plant and equipment 321 138
Purchases of intangibles 0 (71)
----------------------------------------------- --------- ---------
Net cash absorbed in investing activities (4,732) (5,495)
----------------------------------------------- --------- ---------
Cash flows from financing activities
Proceeds from bank borrowings - -
Repayment of bank borrowings (150) (150)
Proceeds from Invest to Grow loan - 260
Repayments of Invest to Grow loan (95) (55)
Issue of shares (net of issue costs) - 8,833
Payments to finance lease creditors (5,421) (3,882)
Dividends paid (2,520) (680)
----------------------------------------------- --------- ---------
Net cash generated/(absorbed) in financing
activities (8,186) 4,326
----------------------------------------------- --------- ---------
Net increase in cash and cash equivalents (1,978) 9,257
Cash and cash equivalents at beginning of
year 12,858 3,601
----------------------------------------------- --------- ---------
Cash and cash equivalents at end of year 10,880 12,858
----------------------------------------------- --------- ---------
Consolidated statement of changes in equity
For the year ended 30 April 2018
Non-
Share Share controlling Retained Total
capital premium interest earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------- --------- ------------- ---------- ---------
Balance at 1 May 2016 1,006 - 18 19,728 20,752
--------------------------------- --------- --------- ------------- ---------- ---------
Total comprehensive income - - - 7,353 7,353
Share redesignation 63 - - - 63
Issue of bonus shares 331 - - (331) -
Issue of ordinary shares on IPO 200 9,800 - - 10,000
Share issue costs - (1,167) - - (1,167)
--------------------------------- --------- --------- ------------- ---------- ---------
594 8,633 - 7,022 16,249
Dividends paid - - - (680) (680)
Balance at 30 April 2017 1,600 8,633 18 26,070 36,321
--------------------------------- --------- --------- ------------- ---------- ---------
Total comprehensive income - - - 7,339 7,339
Share-based payment expense - - - 225 225
--------------------------------- --------- --------- ------------- ---------- ---------
- - - 7,564 7,564
Dividends paid - - - (2,520) (2,520)
Balance at 30 April 2018 1,600 8,633 18 31,115 41,366
--------------------------------- --------- --------- ------------- ---------- ---------
Notes to the preliminary results
For the year ended 30 April 2018
1. Basis of preparation
The consolidated financial statements and preliminary
announcement of Van Elle Holdings plc for the year ended 30 April
2018 were authorised for issue by the Board of Directors on 25 July
2018.
The financial information included within this preliminary
announcement does not constitute statutory accounts within the
meaning of section 435 of the Companies Act 2006 (the "Act"). The
financial information for the year ended 30 April 2018 has been
extracted from the statutory accounts on which an unqualified audit
opinion has been issued.
The financial statements for the year ended 30 April 2018 will
be posted to shareholders on 7 August 2018 and copies will be
available from that date from the company secretary at the
registered office of the Company, Kirkby Lane, Pinxton,
Nottinghamshire, NG16 6JA. The statutory accounts for the year
ended 30 April 2018 will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
The consolidated financial statements of Van Elle Holdings plc
and its subsidiaries have been prepared in accordance with
International Financial Reporting Standards as endorsed by the
European Union ("IFRS"), International Financial Reporting
Standards Interpretation Committee ("IFRS IC") interpretations and
those provisions of the Companies Act 2006 applicable to companies
reporting under IFRS. The Group financial statements have been
prepared on the going concern basis and adopting the historical
cost convention. The accounting policies adopted are consistent
with those of the previous financial year. New standards and
interpretations which came into force during the year did not have
a significant impact on the Group's financial statements.
2. Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the
future. Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from
these estimates and assumptions. The estimates and assumptions that
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year are discussed below.
Revenue recognition
This year's revenue includes an estimate for a final account
settlement that is still to be concluded but has been assessed by
the Board on a prudent basis and the anticipated outcome is
reflected in the full year turnover.
The Directors have taken legal and independent expert advice on
the potential outcome to ensure that the estimate is as accurate as
possible. Consideration has been given by the Directors to
contractual terms and the work performed when arriving at the value
of the amount claimed, which is approximately GBP0.7m.
3. Segment information
The Group evaluates segmental performance based on profit or
loss from operations calculated in accordance with IFRS but
excluding non-recurring losses, such as goodwill impairment, and
the effects of share-based payments. 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. Loans and
borrowings, insurances and head office central services' costs are
allocated to the segments based on levels of turnover. All turnover
and operations are based in the UK.
Operating segments - 30 April 2018
Ground Ground
General Specialist Engineering Engineering Head
Piling Piling Services Products Office Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- --------- ----------- ------------- ------------- --------- ---------
Revenue
Total revenue 46,066 30,299 18,677 16,384 - 111,426
Inter-segment revenue (2,942) (412) (1,175) (3,025) - (7,554)
------------------------------- --------- ----------- ------------- ------------- --------- ---------
Revenue 43,124 29,887 17,502 13,359 - 103,872
------------------------------- --------- ----------- ------------- ------------- --------- ---------
Operating profit 5,693 4,073 306 1,025 - 11,097
Underlying operating profit
Share-based payments - - - - (148) (148)
Exceptional item - (956) - - (283) (1,239)
------------------------------- --------- ----------- ------------- ------------- --------- ---------
Operating profit 5,693 3,117 306 1,025 (431) 9,710
Finance expense - - - - (561) (561)
Finance income - - - - 25 25
------------------------------- --------- ----------- ------------- ------------- --------- ---------
Profit before tax 5,693 3,117 306 1,025 (967) 9,174
------------------------------- --------- ----------- ------------- ------------- --------- ---------
Assets
Property, plant and equipment 13,513 10,218 4,163 2,913 8,695 39,502
Inventories 297 420 156 1,693 -- 2,566
------------------------------- --------- ----------- ------------- ------------- --------- ---------
Reportable segment assets 13,810 10,638 4,319 4,606 8,695 42,068
Intangible assets - - - - 2,324 2,324
Trade and other receivables - - - - 22,225 22,225
Cash and cash equivalents - - - - 10,880 10,880
------------------------------- --------- ---------
Total assets 13,810 10,638 4,319 4,606- 44,123 77,496
------------------------------- --------- ----------- ------------- ------------- --------- ---------
Liabilities
Loans and borrowings - - - - 16,785 16,785
Trade and other payables - - - - 18,106 18,106
Provisions - - - - 270 270
Deferred tax - - - - 969 969
------------------------------- --------- ---------
Total liabilities - - - - 36,130 36,130
------------------------------- --------- ----------- ------------- ------------- --------- ---------
Other information
Capital expenditure 5,059 2,636 2,070 1,782 1,603 13,150
Depreciation/amortisation 2,002 2,114 685 242 662 5,705
------------------------------- --------- ----------- ------------- ------------- --------- ---------
There are no individual customers accounting for more than 10%
of Group revenue in either the current or preceding year. Operating
segments - 30 April 2017
Ground Ground
General Specialist Engineering Engineering Head
Piling Piling Services Products Office Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- --------- ----------- ------------- ------------- --------- ---------
Revenue
Total revenue 45,008 30,126 10,621 13,714 - 99,469
Inter-segment revenue (2,103) - - (3,273) - (5,376)
------------------------------- --------- ------------- --------- ---------
Revenue 42,905 30,126 10,621 10,441 - 94,093
------------------------------- --------- ----------- ------------- ------------- --------- ---------
Operating profit -
Underlying operating profit 4,685 5,355 772 751 - 11,563
Share-based payments - - - - (77) (77)
Exceptional item - - - - (1,781) (1,781)
------------------------------- --------- ---------
Operating profit 4,685 5,355 772 751 (1,858) 9,705
Finance expense - - - - (436) (436)
Finance income - - - - 14 14
------------------------------- --------- ---------
Profit before tax 4,685 5,355 772 751 (2,280) 9,283
------------------------------- --------- ----------- ------------- ------------- --------- ---------
Assets
Property, plant and equipment 10,456 9,696 2,778 1,373 7,807 32,110
Inventories 414 370 179 1,460 - 2,423
------------------------------- --------- ----------- ------------- ------------- --------- ---------
Reportable segment assets 10,870 10,066 2,957 2,833 7,807 34,533
Intangible assets - - - - 2,330 2,330
Trade and other receivables - - - - 18,796 18,796
Cash and cash equivalents - - - - 12,858 12,858
------------------------------- --------- ---------
Total assets 10,870 10,066 2,957 2,833 41,791 68,517
------------------------------- --------- ----------- ------------- ------------- --------- ---------
Liabilities
Loans and borrowings - - - - 14,316 14,316
Trade and other payables - - - - 16,760 16,760
Provisions - - - - 342 342
Deferred tax - - - - 778 778
------------------------------- --------- ---------
Total liabilities - - - - 32,196 32,196
------------------------------- --------- ----------- ------------- ------------- --------- ---------
Other information
Capital expenditure 4,267 2,948 1,841 668 2,041 11,765
Depreciation/amortisation 1,918 1,848 622 299 - 4,687
------------------------------- --------- ----------- ------------- ------------- --------- ---------
4. Other operating income
2018 2017
GBP'000 GBP'000
----------------------------------------- ---------- ---------
Recovery in respect of insurance excess - 200
----------------------------------------- ---------- ---------
5. Exceptional costs
2018 2017
GBP'000 GBP'000
--------------------------------- --------- ---------
Initial Public Offering ("IPO") - 1,452
Other exceptional costs 283 329
--------------------------------- --------- ---------
283 1,781
--------------------------------- --------- ---------
Initial Public Offering ("IPO")
The charge in the prior year represents fees and other costs
arising because of the IPO which have not been treated as
deductions against the share premium account. Of the exceptional
charge of GBP1,452,000, approximately GBP104,000 is treated as tax
deductible and the balance of GBP1,348,000 is treated as disallowed
tax expenses in the tax computation
Other exceptional items
The current year other exceptional item relates to costs
associated with an EGM held on 15 December 2017, and due diligence
fees for an aborted acquisition.
The prior year other exceptional item relates to severance costs
arising from the Board changes following the IPO and other legal
matters arising as a consequence of the IPO. These are treated as
fully tax deductible within the tax computation.
6. Income tax expense
2018 2017
GBP'000 GBP'000
------------------------------------------------------------ --------- ---------
Current tax expense
Current tax on profits for the year 1,647 2,060
Adjustment for (over)/under provision in the prior period (3) (196)
------------------------------------------------------------ --------- ---------
Total current tax 1,644 1,864
------------------------------------------------------------ --------- ---------
Deferred tax expense
Origination and reversal of temporary differences 188 103
Recognition of previously unrecognised deferred tax assets 3 3
Effect of decreased tax rate on opening balance - (40)
------------------------------------------------------------ --------- ---------
Total deferred tax 191 66
------------------------------------------------------------ --------- ---------
Income tax expense 1,835 1,930
------------------------------------------------------------ --------- ---------
The reasons for the difference between the actual tax charge for
the year and the standard rate of corporation tax in the United
Kingdom applied to profits for the year are as follows:
2018 2017
GBP'000 GBP'000
------------------------------------------------------------ --------- ---------
Profit before income taxes 9,174 9,283
------------------------------------------------------------ --------- ---------
Tax using the standard corporation tax rate of 19% (2017:
20%) 1,743 1,849
Adjustments for (over)/under provision in previous periods - (193)
Expenses not deductible for tax purposes 81 288
Non-qualifying depreciation 11 -
Short-term timing differences - (14)
------------------------------------------------------------ --------- ---------
Total income tax expense 1,835 1,930
------------------------------------------------------------ --------- ---------
During the year ended 30 April 2018, because of the reduction in
the UK corporation tax rate from 20% to 19% from 1 April 2018,
corporation tax has been calculated at 18.9% of estimated
assessable profit for the year (2017: 19.9%).
The Finance (No 2) Act 2015, which provides for reductions in
the main rate of corporation tax from 20% to 19% effective from 1
April 2018 and to 18% effective from 1 April 2020, was
substantively enacted on 26 October 2015. Subsequently, the Finance
Act 2016, which provides for a further reduction in the main rate
of corporation tax to 17% effective from 1 April 2020, was
substantively enacted on 6 September 2016. These rate reductions
have been reflected in the calculation of the deferred tax at the
statement of financial position date. The closing deferred tax
liability at 30 April 2018 has been calculated at 17%, reflecting
the tax rate at which the deferred tax is expected to be utilised
in future periods.
7. Dividends
2018 2017
GBP'000 GBP'000
----------------------------------------------- --------- ---------
Final dividend - year ended 2017
1.75p per ordinary share paid during the year 1,400 -
Interim dividend - year ended 2018
0.85p per ordinary share paid during the year 1,120 680
----------------------------------------------- --------- ---------
2,520 680
----------------------------------------------- --------- ---------
The proposed final dividend for the year ended 30 April 2018 of
2.3p per share amounting to GBP1,840,000 and representing a total
dividend of 3.7p per share for the full year, will be paid on 28
September 2018 to the shareholders on the register at the close of
business on 6 September 2018. The proposed final dividend is
subject to approval by shareholders at the Annual General Meeting
and has not been included as a liability in these financial
statements.
8. Earnings per share
The calculation of basic and diluted earnings per share is based
on the following data:
2018 2017
'000 '000
------------------------------------------------------- ------- -------
Basic weighted average number of shares 80,000 75,123
Dilutive potential ordinary shares from share options - -
------------------------------------------------------- ------- -------
Diluted weighted average number of shares 80,000 75,123
------------------------------------------------------- ------- -------
GBP'000 GBP'000
------------------------------------------ -------- --------
Profit for the year 7,339 7,353
------------------------------------------ -------- --------
Add back/(deduct):
Share-based payments 148 77
Exceptional costs and Carillion bad debt 1,239 1,781
Tax effect of the above (210) (86)
------------------------------------------ -------- --------
Underlying profit for the year 8,516 9,125
------------------------------------------ -------- --------
Pence Pence
--------------------------------------------------------- ------ ------
Earnings per share
Basic 9.2 9.8
Diluted 9.2 9.8
Basic - excluding exceptional costs, Carillion bad debt
and share-based payments 10.6 12.1
Diluted - excluding exceptional costs, Carillion bad
debt and share-based payments 10.6 12.1
--------------------------------------------------------- ------ ------
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders and on 80,000,000
ordinary shares (2017: 75,123,288) being the weighted average
number of ordinary shares. In accordance with IAS 33, the weighted
average number of shares in issue during the period has been
retrospectively adjusted for the proportionate change in the number
of the shares outstanding because of the bonus issue and share
splits that occurred on admission to AIM.
The underlying earnings per share is based on profit adjusted
for exceptional operating costs, Carillion bad debt and share-based
payment charges, 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.
There is no dilutive effect of the share options as performance
conditions remain unsatisfied and the share price was below the
exercise price.
9. Cash generated from operations
2018 2017
GBP'000 GBP'000
--------------------------------------------------------- --------- ---------
Operating profit 9,710 9,705
Adjustments for:
Depreciation of property, plant and equipment 5,705 4,655
Amortisation of intangible assets 44 32
Profit on disposal of property, plant and equipment (267) (89)
Share-based payment expense 225 77
--------------------------------------------------------- --------- ---------
Operating cash flows before movement in working capital 15,417 14,380
Increase in inventories (142) (812)
(Increase)/decrease in trade and other receivables (3,429) (1,950)
Increase/(decrease) in trade and other payables 1,470 1,544
Decrease in provisions (72) (33)
--------------------------------------------------------- --------- ---------
Cash generated from operations 13,244 13,129
--------------------------------------------------------- --------- ---------
10. Analysis of cash and cash equivalents and reconciliation to
net debt
2017 Cash Flows Non-cash 2018
GBP000 GBP000 flows GBP000
GBP'000
--------------------------- --------- ----------- --------- ---------
Cash at bank 12,810 (1,978) - 10,832
Cash in hand 48 - - 48
--------------------------- --------- ----------- --------- ---------
Cash and cash equivalents 12,858 (1,978) - 10,880
Bank loans secured (1,275) 150 - (1,125)
Other loans secured (205) 95 - (110)
Finance leases (12,836) - (2,714) (15,550)
--------------------------- --------- ----------- --------- ---------
Net debt (1,458) (1,733) (2,714) (5,905)
--------------------------- --------- ----------- --------- ---------
Significant non-cash transactions include the purchase of
GBP8,135,057 (2017: GBP6,202,000) of fixed assets on hire
purchase.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR SEUEELFASESW
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July 25, 2018 02:01 ET (06:01 GMT)
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