TIDMVANL
RNS Number : 6927U
Van Elle Holdings PLC
03 August 2022
Van Elle Holdings plc
('Van Elle', the 'Company' or the 'Group')
Results for the year ended 30 April 2022
Analyst Briefing & Investor Presentation
'Record revenues and return to profit following a strong
recovery
driven by high levels of activity across all divisions'
Van Elle Holdings plc, the UK's largest ground engineering
contractor, announces its results for the year ended 30 April 2022
('FY2022').
GBPm Year ended Year ended
30 April 30 April
2022 2021
--------------------------------------- ----------- -----------
Revenue 124.9 84.4
EBITDA (1) 9.8 4.2
Operating profit / (loss) (2) 4.4 (0.8)
Profit / (loss) before taxation (2) 3.6 (1.4)
Basic earnings per share 1.7p (1.3)p
Adjusted basic earnings per share (3) 2.7p (1.2)p
Net funds excl. IFRS 16 property and
vehicle lease liabilities 5.9 3.7
Net funds / (debt) 0.1 (1.7)
Return on capital employed 9.4% (1.8)%
Operating cash conversion (%) 86.1% 18.5%
--------------------------------------- ----------- -----------
1. EBITDA is defined as earnings before interest, tax,
amortisation and depreciation.
2. Share-based payments have been reclassified from
'non-underlying' to 'underlying' in FY2022. The comparative period
has been restated to reflect this reclassification. Current year
non-underlying items have a net value of GBPnil and are disclosed
in note 4 (FY2021: GBP0.1m).
3. Adjusted basic earnings per share is stated before
non-underlying items of GBPnil (FY2021: GBP0.1m) and the one-off
deferred tax charge of GBP1.1m relating to the enacted change to
the future corporation tax rate (see note 6).
Highlights:
-- Record activity levels and revenues following strategic
targeting of structurally growing end markets.
-- Significant growth across all divisions, notably in higher
margin Specialist Piling, Rail and Ground Engineering Services.
-- Appointed to the 10-year Smart Motorways Programme Alliance
framework (SMPA), with work on current contracts and construction
of emergency refuge areas continuing despite the announced pause to
the programme.
-- Piling work commenced on the Core Valley Lines rail network,
the Group's first major electrification project since 2018.
-- Success in passing on cost and managing the inflationary
environment and supply chain challenges.
-- Capital investment of GBP4.9m including the addition of 8 rigs to the fleet.
-- Strong balance sheet with significant reduction of Group debt
to just GBP1.1m (excl. IFRS 16 lease liabilities) at 30 April 2022
and an unused bank facility of up to GBP11m.
-- Net cash position of GBP5.9m (excluding IFRS 16 lease liabilities) at 30 April 2022.
-- Reinstatement of dividends with final dividend of 1p per share recommended.
Current trading and outlook:
-- Trading momentum in FY2022 has continued into FY2023 with all
divisions operating at high activity levels.
-- Supply chain challenges moderating, albeit inflationary pressures remain.
-- Investment in infrastructure, including the decarbonisation
and electrification of the rail network, where the Group has
established a market-leading position, expected to continue in the
longer term.
-- Appointed, post period end, to the piling framework for the
TransPennine Route Upgrade programme (TRU).
-- Order book at 30 June 2022 of GBP39.0m (GBP39.0m at 30 April 2022)
-- Current levels of activity and demand support prospects for FY2023.
-- Further progress expected in achieving the Group's medium-term financial targets.
Mark Cutler, Chief Executive, commented:
"These results are the first to reflect a full year's trading
post COVID and demonstrate the positive progress the Group is
making under its transformation strategy launched in 2019. Although
the sector continues to face several wider challenges, we have
significant opportunities ahead to further improve, and momentum
has continued into the new financial year. Overall, it is pleasing
to see the actions taken over the last three years starting to
deliver sustainable results that put us firmly on-track to deliver
our medium-term objectives.
My sincere thanks to our employees, suppliers and customers for
their hard work and support over the last year."
Analyst Briefing: 9.30am on Wednesday 3 August 2022
A briefing for Analysts will be held at 9.30am this morning -
Wednesday 3 August 2022. Analysts interested in attending should
contact Walbrook PR on vanelle@walbrookpr.com or 020 7933 8780.
Investor Presentation: 3.30pm on Wednesday 3 August 2022
Mark Cutler, Chief Executive Officer, and Graeme Campbell, Chief
Financial Officer, will hold a presentation to review the results
and prospects following their release at 3.30pm on Wednesday 3
August 2022, 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.
For further information, please contact:
Van Elle Holdings plc Via Walbrook
Mark Cutler, Chief Executive Officer
Graeme Campbell, Chief Financial Officer
Peel Hunt LLP (Nominated Adviser and Tel: 020 7418 8900
corporate broker)
Mike Bell / Ed Allsopp
Walbrook PR Limited Tel: 020 7933 8780
or vanelle@walbrookpr.com
Tom Cooper / Nick Rome 07971 221 972 or 07748
325 236
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 Rail, and Ground Engineering Services; 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 and Rail 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(R). Van Elle has a
market-leading reputation and the UK's largest rig fleet of 122
rigs.
Having floated on AIM in 2016 it now has a strong national
presence, diversified offering and market-leading brand name.
CHAIRMAN'S STATEMENT
Overview
I am pleased to report that FY2022 has been a year of record
revenues, following a strong recovery for the Group, driven by high
levels of activity across all divisions. Following the relaxation
of Covid-related restrictions, and our strategy of working closely
with key customers, we saw a strong rebound in revenues across all
sectors. As a result, trading has been well ahead of pre-pandemic
levels, and the Group has returned to profitability in the year.
The Group generated full year revenue of GBP124.9m, an increase of
48% on the preceding year and operating profit of GBP4.4m, an
increase of GBP5.2m over FY2021.
We have faced a number of supply chain challenges during the
year with lack of availability of key materials impacting
operations. In addition, the Group has experienced price inflation
across the spectrum. We have been able to pass on some, but not
all, of these price increases with the consequential impact on
contract margins. These challenges are starting to show early signs
of moderating, and the impacts of further material price inflation
are being managed, as far as possible, through contract pricing
mechanisms.
Significant progress has continued to be made on delivery of the
of the Group's strategic plan, focused on improving operational
performance and establishing strong positions for future growth.
Several significant contracts and framework appointments were
awarded in the year in the key infrastructure growth sectors of
Rail and Highways.
FY2022 represents the first full year of ScrewFast Foundations
Limited ('ScrewFast') being part of the Group, having acquired the
business on 1 April 2021. In line with the Board's expectations at
the time of the acquisition, ScrewFast has strengthened the Group's
position in its growth markets, notably highways and energy with
significant potential identified in rail and housing. The business
has been fully integrated, with projects being bid for, and
delivered, in an integrated model within the Specialist Piling
division.
Capital structure and allocation
The Group's capital structure is reviewed regularly by the Board
and management, taking into account the need, availability and cost
of sources of funding. The Group's objective is to deliver
long-term value to shareholders whilst maintaining a balance sheet
structure that safeguards the Group's financial position through
normal economic and sector-specific cycles and supports investment
in medium term growth strategies including expected increases in
working capital.
In October 2020, the Group secured up to GBP11m of asset backed
lending facilities on a revolving basis over 4 years, secured
against the receivables and certain tangible assets. The facility
was not drawn at any time during the financial year. Group debt has
been further reduced to GBP1.1m at 30 April 2022, excluding IFRS
lease liabilities.
Rig fleet and equipment investment was increased in the year to
GBP4.9m having been restricted over the previous two financial
years in order to manage cash resources during the pandemic.
Capital investment is focused on both maintaining and upgrading
existing rigs and investing in new rigs to meet growth
opportunities and to replace ageing rigs.
The Board continue to review and appraise acquisition
opportunities, in line with its disciplined criteria and approach.
Whilst not core to the delivery of the Group strategy, the Board
will look to supplement organic growth with earnings accretive,
bolt-on acquisitions of established businesses which can augment
and strengthen the Group's offering.
Dividend
I am pleased to confirm the reinstatement of dividends with the
recovery of the Group's core markets. In light of the performance
in the year and given the importance to shareholders of dividends
as part of total shareholder return, the Board is recommending a
final dividend of 1.0p per share. If approved, the final dividend
will be payable on 7 October 2022 to shareholders on the share
register as at 16 September 2022. The shares will be marked
ex-dividend on 15 September 2022.
People
The Group has strengthened the leadership team with significant
industry and corporate experience in recent years. This management
team is now embedded into the Group structure, supported by
strengthened teams at a divisional level. Bringing together a mix
of experience and capability has allowed the Group to maximise
opportunities during the post-pandemic market recovery and puts it
well placed to deliver on its vision and strategy. Increased levels
of training are now being delivered with internal training days
doubling between FY2021 and FY2022. FY2023 sees the launch of the
inaugural Van Elle leadership programme.
Van Elle is proud to be supported by an outstanding group of
employees. My thanks go to all employees for their hard work in a
year of such significant levels of trading, and with the additional
challenges caused by supply chain disruption.
Board and governance
There have been no changes to the Board during the current year.
Van Elle remains committed to promoting the highest standards of
corporate governance and ensuring effective communication with
shareholders. The Group adopts and complies with the Quoted
Companies Alliance Corporate Governance Code, complemented with
other suitable governance measures appropriate for a company of its
size.
Outlook
The Board is pleased with the progress made in FY2022, with many
of the Group's end markets having shown sustained and strong levels
of trading. The trading momentum in FY2022 has continued into
FY2023 and the Group's order book continues to be maintained at
high levels. Significant framework appointments such as the Smart
Motorways Programme Alliance and TransPennine Route Upgrade
programmes are expected to provide considerable future workflows
for the Group and help underpin Van Elle's growth expectations.
Investment in infrastructure, including the decarbonisation and
electrification of the rail network, where the Group has
established a market-leading position, is expected to continue in
the longer term. Future prospects in other growth markets also
remain encouraging. The Board is therefore increasingly confident
of achieving its mid-term financial targets of 5-10% annual revenue
growth, 7-8% operating profit margin and 15-20% ROCE.
Frank Nelson
Non-Executive Chair
2 August 2022
CHIEF EXECUTIVE'S STATEMENT
OPERATING REVIEW
Overview
The high levels of demand across Van Elle's core markets were
sustained throughout the financial year, resulting in the Group
reporting record revenues in FY2022 and delivering a 3.5% operating
profit margin.
Market conditions started to recover from the COVID-19 pandemic
towards the end of the previous year and the Group entered the year
with a strong pipeline of projects and increasing enquiry
levels.
Full year revenue was GBP124.9m, representing an increase of 48%
on the preceding year (FY2021: GBP84.4m). After adjusting for the
impact of the acquisition of ScrewFast Foundations Limited
('ScrewFast'), the year-on-year increase in revenue was 41%.
Revenue was also 41% higher than FY2019 (32% after adjusting for
the acquisition of ScrewFast), which was the last year unaffected
by the COVID-19 pandemic.
There was a significant increase in demand and activity levels
across all divisions. Workload in the rail sector lagged behind the
recovery of our other core markets, but activity levels accelerated
and increased during the second half of the financial year. Piling
work commenced on the Core Valley Lines rail network, the Group's
first major electrification project since 2018. Since the year end,
Van Elle has been appointed to the piling framework for the
TransPennine Route Upgrade (TRU) programme with site activity
expected to commence later in FY2023.
Whilst the Group reports a slight improvement in contract
margins overall, mainly due to better execution and higher
utilisation of the rig fleet, there have been a number of supply
chain challenges during the year. A lack of availability and price
inflation of raw materials impacted contract margins. The Group has
successfully passed through price increases to partially offset the
inflated input costs, however some disruption to site work caused
by material shortages has been unavoidable.
In order to attract and retain high quality employees, Van Elle
took steps in the year to review remuneration and benefits, which
has resulted in an increase to the Group's cost base. In the short
term, particularly on longer term contracts already mobilised,
these increased costs could not be fully recovered in all
cases.
Despite the supply chain challenges and wage inflation, the
Board is pleased to report a return to profitability for the Group,
following two financial years impacted by the COVID-19 pandemic.
Operating profit was GBP4.4m, an increase of GBP5.2m over the loss
in FY2021.
The Group acquired ScrewFast on 1 April 2021, and over the
course of the year the business was integrated into the wider Van
Elle structure, whilst retaining key employees and the brand. The
team has continued to deliver high quality projects in line with
its previous strong track record. Going forward, the Group
anticipates an increase in demand for ScrewFast's helical piling
and steel modular foundation solutions, particularly in the
highways sector.
The safety and wellbeing of all employees is Van Elle's primary
operational priority. Van Elle's average headcount increased by 12%
to 577 and the safety performance in FY2022 improved on that of the
previous year, with the accident frequency rate dropping to 0.28
(FY2021: 0.59) and the positive indicators also improving. During
the year, Van Elle has strengthened the health and safety team and
introduced significantly more internal training, with training days
double those of FY2021.
In the previous financial year, Van Elle took measures to
strengthen its balance sheet, including a refinancing of existing
debt facilities in October 2020, following which the Group has
access to a debt facility of up to GBP11m. This facility remained
undrawn throughout the financial year. In FY2022, Van Elle further
reduced Group debt by continuing to repay hire purchase
liabilities, whilst financing all capital expenditure from cash
resources. The remaining hire purchase debt at 30 April 2022 was
GBP1.1m (30 April 2021: GBP4.0m). On acquiring ScrewFast, the Group
inherited certain bank loans and hire purchase debt totalling
GBP1.3m, all of which was repaid in FY2022. These actions leave the
Group in a net cash position, with adequate liquidity headroom to
support further growth and future investment.
ESG
The Group launched its sustainability strategy last year,
aligned to industry best practice including the Construction
Leadership Council programme. The Group's teams are passionate
about making positive changes to their equipment and processes to
considerably reduce waste and carbon production and limit the
negative impact of their activities.
Van Elle's newly appointed Environment Manager will take the
lead in delivering the Group's vision, which is to help create a
sustainable future through innovation, engagement and collaboration
with local communities, customers, and broader industry.
In addition to the focus on sustainability of site operations,
the Group has undertaken a number of initiatives, including
establishing an electric company car scheme, installing vehicle
charging points at its offices, and planning to install solar
panels at the Group's head office and main depot in
Kirkby-in-Ashfield through FY2023.
Van Elle's target is to achieve Scope 1 and Scope 2 carbon
neutral by 2050, however, to achieve this the Group needs to
deliver on all of aspects of its strategy, and harness
opportunities within the supply chain, product development and site
operations.
Van Elle's social initiatives include various charitable
activities, including partnering with a local charity, which is
selected by employees. Van Elle also promotes volunteering and
teams have completed activities to support the local community over
the course of the year.
Strategic approach
Van Elle is making good progress against Phase 3 of the Group
strategy and is seeing the early benefits of actions taken under
Phases 1 and 2 which are substantially complete, although subject
to continuous improvement, as summarised below:
Phase 1: Stabilising and improving performance
Simplifying the Group structure, improving leadership
capability, strengthening commercial capability, cost reduction and
efficiency improvements, safety and asset utilisation performance,
and employee engagement activities .
Phase 2: Developing foundations for growth
Developing clear strategic plans for the Group's core sectors of
housing, infrastructure and regional construction, improving
customer relationships and tendering activity, maximising the
integrated solutions offering, broadening the range of products and
services, and strengthening the Group's balance sheet.
Phase 3: Establishing market leadership
Sustainable, profitable growth towards medium term objectives of
revenue growth of 5-10% per annum, underlying operating margins of
7-8%, and return on capital employed of 15-20%.
The Group's vision is to be the leading, most trusted provider
of Total Foundation Solutions and its strategic goals are aligned
under three pillars of developing trusted partnerships, deploying
the best people and assets and the perfect delivery of our
projects. Some highlights in the year include:
- further improvement in employee engagement scores from our annual employee survey;
- a full review of employee remuneration and benefits, with
improvement to terms targeted at employee engagement and
retention;
- doubling of internal training days delivered, compared to FY2021;
- integration of ScrewFast into the Specialist Piling division,
with aligned management and operational delivery teams;
- further expansion of the Group's operational capabilities with
excellent growth delivered in sheet piling, vibro and rigid
inclusions, and the development of an ancillary civils capability
in the Rail division. These techniques have been added to Van
Elle's services and have all contributed positively to the
financial result; and
- further reduction in Group debt, with all capital expenditure
in the year funded from cash resources. Outstanding hire purchase
debt as at 30 April 2022 is GBP1.1m, and a funding facility of up
to GBP11m remains available.
Markets
The Group operates in the following three market segments:
-- Residential constitutes approximately 43% of Group revenues
(down from 45% in FY2021). Van Elle's teams deliver integrated
piling and foundation systems for national and regional
housebuilders, retirement and multi-storey residential
properties.
The prior year financial results in the residential sector were
heavily impacted by the COVID-19 pandemic, with housebuilders
closing all sites during the first national lockdown. After a
gradual recovery in in the first half of FY2021, demand and
activity levels continued to increase. Demand from housebuilders
for Van Elle's piling services and precast concrete modular
foundation solution (Smartfoot) has been very strong, with the
Housing division operating at near capacity levels throughout
FY2022.
The long-term outlook for the sector is likely to remain strong,
however changes to building regulations are expected to soften the
exceptionally high demand seen this year as we progress through
FY2023.
Van Elle remains confident that its Smartfoot system will
continue to be popular with both traditional housebuilders and
emerging modular housebuilders, due to the benefits of reduced
delivery time, certainty of supply and cost, sustainability
benefits and reduced on-site resource levels.
The Directors anticipate the residential sector will move
increasingly to modern methods of construction as the time and
resource savings of modular foundations become better appreciated,
and the expanded range of integrated services from early ground
investigation, ground stabilisation and improvement, followed by
piling and foundations systems, provides a strong model to support
housebuilder customers.
-- Infrastructure constitutes approximately 35% of Group
revenues (up from 34% in FY2021) and includes specialist ground
engineering services to the rail, highways, coastal and flooding,
energy and utility sectors.
In the highways sector, Van Elle continues to deliver projects
under local authority and Highways England frameworks. The Group
was appointed to the 10-year Smart Motorways Programme Alliance
(SMPA) framework in the second half of the year. Whilst there is a
pause to the new-build programme to collect safety and economic
data, design work, current contracts and construction of emergency
refuge areas is continuing. The Group's helical piling and modular
steel foundation solution (ScrewFast) is increasingly a gantry
foundation solution of choice in many highways projects.
In the rail sector, revenues were slower to recover with subdued
activity levels continuing through the first half of the year.
However, the second half delivered strong revenue growth, with
electrification work commencing on the Core Valley Lines rail
network in South Wales, the Group's first major electrification
project since 2018. Van Elle also delivered a series of
high-profile station modernisation projects involving the rail and
specialist piling divisions in tandem, including expansions of
Gatwick airport station for Costain, Birmingham University station
for Volker Fitzpatrick, and several other regional station schemes
taking Van Elle's historical station portfolio to over 200
completed projects. Van Elle also delivered several embankment and
slope stabilisation schemes, often at short notice, including major
schemes in Network Rail's southern region and has been delivering
complex coastal rail works on the Dawlish coast on a series of
projects throughout FY2022, and ongoing, for Bam Nuttall. Van Elle
was also appointed to the piling framework for the TransPennine
Route Upgrade (TRU) programme in the first quarter of FY2023.
High Speed 2 continues to offer considerable medium-term
opportunities, where Van Elle anticipates its services will be used
by main contractors to provide additional capacity for the high
workloads required to meet the project deadlines. In the year, Van
Elle undertook various works on all the main works civil
engineering sections on phase 1 (London to Birmingham).
Led primarily by customer interest in the ScrewFast solution,
the Group has developed a growing presence in the high voltage
power sector and has completed several contracts on substation and
other infrastructure projects across the National Grid and regional
distribution networks.
-- Regional Construction constitutes approximately 22% of Group
revenues (up from 21% in FY2021). The Group delivers a full range
of piling and ground improvement services to the commercial and
industrial sectors, from private and public sector building and
developer-led markets across the UK.
The regional construction market improved over the financial
year, as greater confidence returned following the previous year
impacts from COVID-19 and Brexit. The market remains highly
competitive and, as a result, price sensitive. The most buoyant
segment is the construction of industrial and logistics warehouses
across the UK. Van Elle has delivered several schemes in the year
benefiting from a wider offering by the development of its ground
improvement services (vibro stone columns and rigid inclusions)
which are often specified alongside traditional driven and
Continuous Flight Auger ("CFA") piling on the larger warehouse
schemes.
Van Elle has continued to secure projects and exited FY2022 with
a robust and high-quality order book. Contract execution and
commercial management have remained high focus areas in the General
Piling division and further progress has been achieved in
delivering improved contract gross margins.
The impact of delivering against the strategy to develop a
diversified range of complementary services, as well as a strong
balance sheet, has allowed the Group to be awarded several larger
contracts, which contributed strongly to revenue growth in the
year.
Operating structure
Van Elle's operational Group structure has remained consistent
and is reported in three segments:
-- General Piling : open site; larger projects; key techniques
being large diameter rotary, CFA piling and precast driven
piling.
-- Specialist Piling and Rail : restricted access and low
headroom piling; extensive rail mounted capability; helical piling
and steel modular foundations (ScrewFast); sheet piling, soil nails
and anchors, mini-piling and ground stabilisation projects.
-- Ground Engineering Services : driven and CFA piling for
housebuilders, precast concrete modular foundations (Smartfoot);
ground investigation and geotechnical services (Strata
Geotechnics).
Note: The results of ScrewFast Foundations Limited, acquired on
1 April 2021, are reported within the Specialist Piling and Rail
segment.
General Piling
Revenue increased by 43% in the year to GBP39.0m (2021:
GBP27.3m), representing 31% of Group revenues.
The primary target market of regional construction remained
challenging throughout the year, with highly competitive,
price-sensitive tendering required. However, the division continues
to develop stronger relationships with its key customers and
delivered multiple high-quality contracts in the year, requiring
significant technical capabilities.
The General Piling division has had success in delivering larger
projects, particularly in London, utilising its deep CFA technical
capability and expertise, and the Group has furthered its
investment to strengthen its capabilities in support of its
strategy. Growth in rigid inclusions activity, a ground improvement
technique which was recently added to the Group's capabilities has
also supported revenue growth within the division.
A strong order book is carried forward into FY2023, underpinned
by a large contract in the energy sector, which represents the
largest single contract award since the outset of the pandemic.
There has been a high focus on contract execution in the year,
delivering a gradual increase in gross margins through improved
operational performance.
Underlying operating profit for the division was GBP1.8m (2021:
GBP0.3m).
Specialist Piling and Rail
Revenue increased by 56% in the year to GBP45.8m (2021:
GBP29.3m), representing 37% of Group revenues. Revenue from the
acquisition of ScrewFast is reported within the Specialist Piling
and Rail segment. Revenue growth, after adjusting for the impact
ScrewFast was 30%.
Specialist Piling recovered quickly following the first COVID-19
lockdown with strong demand across all of its target markets. The
division has expanded its operational capability by investing in
new rigs for growth and increasing the number of site gangs, having
operated at near capacity throughout most of the financial
year.
The division has developed a strong reputation for a broad range
of technical capabilities, has seen further growth in ground
stabilisation workload and has developed a strong sheet piling
offering including the successful delivery of a major flood
protection scheme to the A40 Llanegwad for the Welsh
Government.
Similar to the prior year, the division benefited from several
high-profile schemes in the infrastructure sector including
selected highways projects and several rail station and
geotechnical schemes. Despite the award of a partner role with the
10-year Smart Motorway Programme Alliance (SMPA), ongoing projects
were fewer in FY2022 compared to previous years but are expected to
ramp-up significantly in FY2023 onwards as the SMPA programme
progresses.
ScrewFast has been fully integrated into Specialist Piling, with
aligned management and operational delivery teams. The helical
piling and steel grillage solution has seen strong demand in the
highways and energy sectors. With expected increased demand, the
Group has invested in increased steel fabrication capacity.
Rail revenue gathered strong momentum during the second half,
after a subdued first half of the financial year. Work commenced on
piling for the decarbonisation and electrification of the Core
Valley Lines rail network, alongside a typically weekend-dominated
workload of smaller schemes across all Network Rail regions. Rail
capabilities were expanded organically by the launch of an
ancillary civil engineering service which complements the Group's
piling and foundations specialisms. The first major project was the
re-opening of the Dartmoor line in north Devon which was
successfully completed in the period for Linbrooke, a Network Rail
signalling framework contractor.
The Group was appointed to the piling framework for the
TransPennine Route Upgrade (TRU) programme between Manchester and
Leeds in the first quarter of FY2023, with work due to commence
later in the financial year and is expected to involve both the
Specialist Piling and Rail divisions for up to three years.
The Group's fleet of 17 Colmar road and rail piling rigs are
approaching an average age of 7 years, and require a major overhaul
which has commenced in FY2022 and is to be concluded over the next
24 months at an anticipated cost of approximately GBP70k per rig.
In addition to peak weekend demands, this has resulted in more
hired, less reliable equipment than is preferable. Orders for five,
new generation, UK designed and built rigs were placed in the
period at a cost of approximately GBP2.5m, with delivery expected
by mid FY2023, allowing the Group to expand the fleet to meet the
greater levels of demand.
Underlying operating profit for the division increased to
GBP3.0m (2021: GBP1.0m).
Ground Engineering Services
Revenue increased by 45% in the year to GBP40.0m (2021:
GBP27.6m), representing 32% of Group revenues.
The Housing division delivers integrated piling and Smartfoot
foundation beam solutions to UK housebuilders. The prior year was
heavily impacted from the first COVID-19 lockdown at the start of
the financial year, which resulted the cessation of all
housebuilding activity for several weeks. Following the reopening
of sites, the division saw a gradual increase in demand which
continued throughout FY2022. The division has operated at capacity
for the majority of the financial year, delivering significant
revenue growth. A strong and high-quality order book is carried
forward into FY2023.
There has been a high level of focus on operational efficiency
to improve gross margins, in a highly competitive market, with a
gradual improvement delivered over the year.
Strata, Van Elle's Geotechnical division, reported revenues of
GBP5.9m (2021: GBP4.7m). Further progress has been made in the
infrastructure sector, with increased activity levels in the
highways sector (including under the Highways England ground
investigation framework) and on HS2 ground investigation projects.
The Group anticipates further growth in the infrastructure market
under the Smart Motorway Programme Alliance and rail
electrification and signalling programmes and have grown the
division's workforce to meet this potential demand.
Underlying operating profit for the segment increased to GBP2.1m
(2021: GBP0.2m).
Rig fleet
Capital expenditure was restricted in the last two financial
years as we sought to manage cash resources during the pandemic. In
FY2022 the Group increased its level of investment to sustain the
existing rig fleet and expand the fleet in key strategic growth
areas.
Capital spend in FY2022 was GBP4.9m, including 8 rigs added to
the fleet. Three rigs were added in Specialist Piling to support
growth in the ground stabilisation sector; a piling rig with deep
CFA capability was added to the General Piling division, where the
Group has developed a positive reputation for large schemes in the
London region; and rigs were also added to the Ground Engineering
Services division to expand capacity given the higher levels of
demand.
Van Elle expects to continue to invest in the rig fleet at
broadly similar levels in FY2023, with capital spend proposals
being approved only where there is high confidence in a division's
forward orders, and forecast ROCE contributes to the Group's
medium-term target of 15-20%.
The total fleet size at the year-end was 122, up from 115 last
year.
Summary and outlook
The strong momentum achieved throughout FY2022 has continued
into the first quarter of FY2023 and all divisions continue to
operate at high activity levels.
The supply chain challenges relating to cost inflation and
availability issues remain a concern, although there are some signs
of the issue moderating and generally the Group is able to recover
cost inflation through contract pricing mechanisms. Access to raw
materials for site works is improving, although inflationary cost
increases have continued, albeit to a lesser extent than during
FY2022.
The Group continues to monitor wage inflation and, in
particular, the 'cost of living crisis' in the UK, which impacts
all employees' living standards. Van Elle has made several changes
to employees' terms of employment and benefits and will keep this
under constant review to ensure that the Group continues to attract
and retain the best people.
The Group has made good progress in the delivery of its
three-phase strategy and is now firmly focussed on achieving a
market leading position, including delivering the Board's medium
term financial KPIs.
Van Elle's core markets continue to show a positive outlook,
particularly in the infrastructure sector where government-backed
investment is anticipated over the medium term. The Group is
well-positioned on the Smart Motorways Programme Alliance on which
a strong pipeline of current and retrofit works is forecast through
to FY2025, while the government's review of new projects is
ongoing. Activity levels in the rail sector have improved, with a
much clearer pipeline of opportunities in place on which the Group
is already engaged or bidding, many of which span the CP6-CP7
transition. HS2 is expected to continue to take capacity out of the
ground engineering market, and Van Elle expects to be increasingly
involved in support of the phase 1 joint ventures. There is a
growing number of opportunities for ScrewFast, which is now fully
integrated into the wider Group structure, particularly in the
highways and energy sectors.
Whilst mindful of the wider macro challenges affecting the
sector, the Board is confident that the current levels of activity
and demand will be sustained in FY2023, and further progress will
be made on our strategy in this financial year.
Mark Cutler
Chief Executive Officer
2 August 2022
CHIEF FINANCIAL OFFICER'S STATEMENT
FINANCIAL REVIEW
Revenue
Revenue in the year to 30 April 2022 was significantly ahead of
the COVID-19 impacted prior year. The recovery in the
infrastructure, regional construction and housebuilding markets
delivered strong order levels and significantly increased contract
activity in the year with total revenue above pre-pandemic
levels.
2022 2021 Change 2022 2021
GBP'000 GBP'000 % % %
--------- ---------- --------- ------- ------ ------
H1 60,601 38,323 56.7 48.1 45.4
H2 64,854 46,045 40.8 51.9 54.6
--------- ---------- --------- ------- ------ ------
Revenue 124,915 84,368 48.1 100.0 100.0
--------- ---------- --------- ------- ------ ------
Throughout H1 of the prior year, there was a gradual recovery in
contract activity, with revenues recovering to pre-COVID levels by
H1 of FY2021. Recovery of the Group's core markets continued into
H2 of FY2021 and throughout FY2022. High activity levels across all
divisions throughout the year resulted in total revenue growth of
GBP40.5m (+48.1%). FY2022 represents the first full year of
ScrewFast trading as part of the Group. Revenue growth in FY2022,
allowing for the impact of the acquisition of ScrewFast was
GBP33.8m (+40.1%).
The Group tracks enquiry levels by market sector, which helps to
identify trends and target our activities into growth areas. The
mix of revenue by end markets is shown below:
2022 2021 Change 2022 2021
GBP'000 GBP'000 % % %
----------------------- ---------- --------- ------- ------ ------
Residential 53,307 37,296 42.9 42.7 44.2
Infrastructure 43,378 28,464 52.4 34.7 33.7
Regional construction 27,879 18,481 50.9 22.3 21.9
Other 351 127 163.8 0.3 0.2
----------------------- ---------- --------- ------- ------ ------
Revenue 124,915 84,368 48.1 100.0 100.0
----------------------- ---------- --------- ------- ------ ------
Residential : The residential sector was impacted the most by
COVID-19 restrictions in the preceding year. A strong recovery,
assisted by the stamp duty holiday, resulted in high levels of
demand. These market conditions continued, with enquiries and
contract activity levels reported at record levels, despite the
phasing out of the stamp duty holiday over the summer of 2021. The
residential sector continues to lead the Group's revenues.
Infrastructure : The recovery in Rail, whilst initially lagging
behind the other divisions, improved throughout the year with work
commencing on the Group's first major electrification programme
since 2018 in H2 of FY2022. The Group was appointed to the Smart
Motorways Alliance Programme (SMPA) in the year for a period of up
to 10 years, and whilst there is a pause to the programme to
collect safety and economic data, design work, live contracts and
investment in emergency refuge areas continues. ScrewFast solutions
are primarily targeted at the infrastructure sector, with a focus
on highways and power projects, and therefore the benefit of
ScrewFast is largely reflected within this sector's revenues.
Regional construction : The sector has remained highly
competitive despite an increase in activity levels. During the year
the Group has continued to secure and deliver high quality projects
whilst also continuing to focus on contract execution and
commercial improvement. The Group has had success in delivering
larger schemes in London, particularly utilising its deep CFA
technical expertise.
The mix of revenue by division is shown below:
2022 2021 Change 2022 2021
GBP'000 GBP'000 % % %
-------------------- ---------- --------- ------- ------ ------
General Piling 38,974 27,340 42.6 31.2 32.4
Specialist Piling
and Rail 45,771 29,345 56.0 36.6 34.8
Ground Engineering
Services 40,043 27,596 45.1 32.1 32.7
Head Office 127 87 46.0 0.1 0.1
Revenue 124,915 84,368 48.1 100.0 100.0
-------------------- ---------- --------- ------- ------ ------
General Piling revenues, whilst impacted by high levels of
competition within the regional construction market and by the
industry-wide supply chain challenges (due to the higher raw
material requirements of the division's contract works), increased
due to higher demand and improved tender conversion during the
year. Revenue was supported by further growth in rigid inclusions
activity, a ground improvement technique which was recently added
to the Group's capabilities.
The Specialist Piling and Rail division includes ScrewFast.
Excluding ScrewFast, revenue growth was GBP9.7m (+34.3%). This
division was least impacted by COVID-19 in the preceding year, with
revenues returning to pre-pandemic levels quickly following the
first COVID-19 lockdown. Investment in drill and grout ground
stabilisation capability delivered strong revenue growth in the
year and activity levels on infrastructure projects have also
continued positively, with notably high levels of work on rail
station projects.
Growth in the Ground Engineering Services division's revenue
reflects the significant demand in the residential sector during
the year, also supported by geographical expansion within the UK.
The division has operated at near-capacity for the majority of the
year.
Head office revenues relate to the provision of training
services delivered through the dedicated training facility located
at Kirkby-in-Ashfield.
Gross profit
Gross margin increased to 27.3% (2021: 26.1%). The improvement
is partially due to a change in mix, with a greater proportion of
Group revenues delivered by Specialist Piling and Rail, which
typically deliver gross margins at the upper end of the Group's
range of activities. There has also been a high focus across the
Company on contract execution, with improved margins delivered
across many contract activities.
Strong growth in Ground Engineering Services revenues,
particularly Housing, resulted in a negative mix impact due to the
highly competitive sector delivering margins at the lower end of
the Group's margin range.
Supply chain challenges also impacted the Group, with the
primary issues being a lack of availability and price inflation of
key raw materials. Some of the impact was mitigated through higher
pricing but unrecovered inflationary increases and the disruption
caused by material shortages had a negative effect on contract
margins. Wage inflation also impacted gross margins in the year,
particularly on longer term contracts, where pricing could not be
fully adjusted to reflect higher staff costs.
Overall, an improved revenue mix, better contract execution and
higher rig utilisation rates delivered an improved gross margin,
despite the supply chain and wage inflation challenges.
Operating profit
Operating profit margins improved significantly in the year with
the Group returning to profitability due to high levels of
activity, improved gross margins and better overhead recovery
rates.
2022 2021
GBP'000 GBP'000
-------------------------------------- --------- ---------
Operating profit / (loss) 4,372 (801)
Operating margin 3.5% (0.9)%
-------------------------------------- --------- ---------
Underlying operating profit / (loss) 4,372 (706)
Underlying operating margin 3.5% (0.8)%
-------------------------------------- --------- ---------
Alternative performance measures
In previous years, the Group has presented alternative
performance measures (APMs), which are not defined or specified
under the requirements of IFRS. The Group believes that these APMs
provide depth and understanding to the users of the financial
statements to allow for further assessment of the underlying
performance of the Group and comparability from one year to the
next.
The Board believes that the underlying performance measures for
operating profit, profit before tax and EPS, stated before the
deduction of non-underlying items give a clearer indication of the
actual performance of the business.
The Group's non-underlying items in FY2022 include a credit of
GBP362,000 relating to the reduction in the deferred consideration
due in respect of the acquisition of ScrewFast and a charge of
GBP350,000 relating to two warranty claims arising in the year. The
total value of GBP12,000 is recognised within administration
expenses and forms part of underlying operating profits. Underlying
operating profits and reported operating profits are consistent in
FY2022.
During the preceding year, total non-underlying items of GBP0.1m
were incurred in respect of the fees associated with the
acquisition of ScrewFast Foundations Limited on 1 April 2021.
Net finance costs
Net finance costs were GBP779,000 (2021: GBP598,000). The
increase in finance costs during the year reflects the absorption
of debt on acquisition of ScrewFast Foundations Limited on 1 April
2021. All outstanding loans and hire purchase agreements in
ScrewFast were repaid in April 2022 resulting in accelerated
interest charges in the year.
Taxation
The Group has taken advantage of the extended loss carry back
rules in the period, carrying back losses from the preceding
financial year to the years ending 30 April 2019 and 30 April 2018,
resulting in a refund which was received in Q1 of the FY2023
year.
The effective tax rate in the year was 48.2% (2021: -0.9%). The
relatively high effective tax rate in the year is due to the
enacted change to the future corporation tax rate from 19% to 25%.
This has resulted in a restatement of the Group's deferred tax
liabilities and a deferred tax charge in the current year of
GBP1,072,000. Excluding this one-off deferred tax charge, the
effective tax rate in the year was 18.4%.
The Group has a taxable loss in the current financial year due
to the use of super deduction allowances on qualifying items of
plant and machinery. Tax losses have been recognised on the basis
the Group has net deferred tax liabilities.
Dividends
The Board is recommending a final dividend of 1.0p. No interim
dividend was paid during the year.
Subject to approval at the Annual General Meeting on Thursday 29
September, the recommended final dividend will be paid on 7 October
2022 to shareholders on the share register as at 16 September 2-22.
The associated ex-dividend date will be 15 September 2022.
Earnings per share
Reported basic earnings per share were 1.7p (2021: -1.3p) and
adjusted basic earnings per share were 2.7p (2021: -1.2p). There is
no dilutive effect of outstanding share options as conditions
remain unsatisfied or the share price is below the exercise price
meaning diluted earnings per share is equal to basic earnings per
share, as was the case in the previous financial year.
Adjusted basic earnings per share is based on profit before
non-underlying items, net of tax, and the one-off deferred tax
charge relating to future corporation tax rate changes enacted
during the current year.
Balance sheet
2022 2021
GBP'000 GBP'000
-------------------------------------------- --------- ---------
Fixed assets (including intangible assets) 43,377 42,835
Net working capital 8,113 6,930
Net funds / (debt) 134 (1,711)
Deferred consideration (1,220) (1,521)
Taxation and provisions (3,793) (1,956)
-------------------------------------------- --------- ---------
Net assets 46,611 44,577
-------------------------------------------- --------- ---------
Note: net working capital and taxation and provisions are stated
net of claim liabilities and associated insurance assets
Net assets increased by GBP2.0m to GBP46.6m (2021:
GBP44.6m).
The Group increased its level of investment in the year (having
restricted capital investment in the last two financial years to
manage cash resources during the pandemic). A total of GBP4.9m was
invested over the course of the year with 8 rigs added to the
fleet. Three rigs were added to the Specialist Piling fleet to
support growth in the drill and grout ground stabilisation sector.
A rig was added to the General Piling division to support growth in
deep CFA piling, where the Group has delivered a number of large
schemes in the London region during the year. Rigs were also added
to the Ground Engineering Services division to expand capacity
given the high levels of demand.
On 1 April 2021 the Group acquired 100% of ScrewFast Foundations
Limited, a specialist helical pile design, fabrication and
installation business for consideration of GBP1,760,000 plus
GBP740,000 payable on 31 August 2023, up to a further GBP65,000
payable on 31 August 2022, and up to GBP1,110,000 payable on 31
August 2023 subject to future performance. Goodwill of GBP2,116,000
was recognised on acquisition in the previous financial year.
Management's assumptions are that, of the further potential payment
of GBP1,175,000 subject to performance criteria, GBP543,000 will be
payable based on current financial performance forecasts. This is a
reduction of GBP362,000 on the estimate as at 30 April 2021. This
reduction has been recognised as a credit within administration
expenses in the period. The reduction in ScrewFast's performance
forecast is driven by the pause to the smart motorways scheme which
has affected the timing of some of the more significant
opportunities for this part of the business.
Working capital (defined as inventories, trade and other
receivables and trade and other payables) increased to GBP8.1m
(2021: GBP6.9m), predominantly as a result of increased activity in
the year.
ROCE has increased in the period to 9.4% at 30 April 2022 (2021:
-1.8%), reflecting the impact of the increased operating
profit.
The prior period opening deferred tax liability has been
restated for the recognition of tax losses which were previously
not recognised as deferred tax assets. The impact of this
restatement is a reduction in prior period net deferred tax
liabilities of GBP592,000 and an increase in prior period retained
earnings of GBP592,000. This prior period restatement has no impact
on profits or cashflow in the current financial year.
Net funds
2022 2021
GBP'000 GBP'000
------------------------------------------ --------- ---------
Bank loans - (812)
Lease liabilities (6,853) (9,417)
------------------------------------------ --------- ---------
Total borrowings (6,853) (10,229)
Cash and cash equivalents 6,987 8,518
------------------------------------------ --------- ---------
Net (debt)/funds 134 (1,711)
------------------------------------------ --------- ---------
Net funds excluding IFRS 16 property and
vehicle lease liabilities 5,935 3,704
------------------------------------------ --------- ---------
Net debt decreased during the year. The Group has moved to a net
funds position of GBP0.1m as at 30 April 2022.
Debt acquired on the acquisition of ScrewFast Foundations
Limited of GBP1.2m was repaid in full during the year and existing
hire purchase debt finance was reduced further. Capital investments
in the year were funded from cash resources. As a result, the
balance of outstanding hire purchase debt as at 30 April 2022 is
now GBP1.1m, of which GBP0.9m will be repaid in FY2023 as the
majority of remaining hire purchase contracts reach their term.
Hire purchase agreements are typically at fixed rates of interest
and over a five-year term.
Lease liabilities includes GBP5.8m of IFRS 16 property and
vehicle lease liabilities. The increase in IFRS16 property and
vehicle lease liabilities in FY2022 reflects the renewal of the
Group's van fleet, the roll out of which commenced in Q4 of FY2021
and is on a long-term hire basis over a maximum period of 4
years.
In October 2020, the Group secured up to GBP11m of asset backed
lending facilities on a revolving basis over 4 years secured
against the Group's receivables and certain tangible assets. There
are no financial covenants associated with the facilities and they
remain available and undrawn to date.
Cash flow
2022 2021
GBP'000 GBP'000
---------------------------------------------- --------- ---------
Operating cash flows before working capital 9,816 4,059
Working capital movements (1,442) (3,286)
---------------------------------------------- --------- ---------
Cash generated from operations 8,374 773
Income tax received - 1,408
---------------------------------------------- --------- ---------
Net cash generated from operating activities 8,374 2,181
Investing activities (4,738) (1,316)
Financing activities (5,167) (4,535)
---------------------------------------------- --------- ---------
Net decrease/increase in cash (1,531) (3,670)
---------------------------------------------- --------- ---------
Operating cash flows of GBP9.8m have primarily been used to
repay outstanding debt and fund capital expenditure, all of which
has been paid from cash resources in the year. Working capital
increased in the year, primarily due to the increased trading
levels.
Graeme Campbell
Chief Financial Officer
2 August 2022
Consolidated statement of comprehensive income
For the year ended 30 April 2022
Restated
2022 2021
GBP'000 GBP'000
--------------------------------------------------- ---------- ---------
Revenue 124,915 84,368
Cost of sales (90,842) (62,365)
--------------------------------------------------- ---------- ---------
Gross profit 34,073 22,003
Administrative expenses (29,980) (23,320)
Credit loss impairment charge (159) (81)
Other operating income 438 597
--------------------------------------------------- ---------- ---------
Operating profit / (loss) 4,372 (801)
--------------------------------------------------- ---------- ---------
Operating profit / (loss) before non-underlying
items 4,372 (706)
Other non-underlying items - (95)
--------------------------------------------------- ---------- ---------
Operating profit / (loss) 4,372 (801)
--------------------------------------------------- ---------- ---------
Finance expense (779) (607)
Finance income - 9
--------------------------------------------------- ---------- ---------
Profit / (loss) before tax 3,593 (1,399)
Income tax expense (1,733) (13)
--------------------------------------------------- ---------- ---------
Profit / (loss) after tax and total comprehensive
income/(expense) for the year attributable
to shareholders of the parent 1,860 (1,412)
--------------------------------------------------- ---------- ---------
Earnings per share (pence)
Basic 1.7 (1.3)
Diluted 1.7 (1.3)
--------------------------------------------------- ---------- ---------
All amounts relate to continuing operations. There was no other
comprehensive income in either the current or preceding year.
Share-based payments are no longer classified as non-underlying.
Comparative information for 2021 has been restated to reflect this,
with no impact on the total comprehensive loss for the year.
Consolidated statement of financial position
As at 30 April 2022
Restated
As at
Restated 1 May
2022 2021 2020
GBP'000 GBP'000 GBP'000
------------------------------------ ---------- ----------- ---------
Non-current assets
Property, plant and equipment 38,719 38,243 38,566
Investment property 811 820 829
Intangible assets 3,847 3,772 1,517
------------------------------------ ---------- ----------- ---------
43,377 42,835 40,912
------------------------------------ ---------- ----------- ---------
Current assets
Inventories 3,773 3,022 2,702
Trade and other receivables 34,112 32,038 12,633
Corporation tax receivable 322 84 854
Cash and cash equivalents 6,987 8,518 12,188
Assets classified as held for sale - - 683
45,194 43,662 29,060
------------------------------------ ---------- ----------- ---------
Total assets 88,571 86,497 69,972
------------------------------------ ---------- ----------- ---------
Current liabilities
Trade and other payables 22,475 20,833 11,579
Loans and borrowings - 230 -
Deferred consideration 50 - -
Lease liabilities 1,696 3,110 3,875
Provisions 7,738 7,635 241
------------------------------------ ---------- ----------- ---------
31,959 31,808 15,695
------------------------------------ ---------- ----------- ---------
Non-current liabilities
Loans and borrowings - 582 -
Deferred consideration 1,170 1,521 -
Lease liabilities 5,157 6,307 7,461
Deferred tax 3,674 1,702 980
10,001 10,112 8,441
------------------------------------ ---------- ----------- ---------
Total liabilities 41,960 41,920 24,136
------------------------------------ ---------- ----------- ---------
Net assets 46,611 44,577 45,836
------------------------------------ ---------- ----------- ---------
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 30,038 28,004 29,263
Total equity 46,611 44,577 45,836
------------------------------------ ---------- ----------- ---------
A third Group statement of financial position as at 1 May 2020
has been shown above to show the effect of the prior year
restatement of deferred tax.
Consolidated statement of cash flows
For the year ended 30 April 2022
2022 2021
GBP'000 GBP'000
------------------------------------------------- --------- ---------
Cash flows from operating activities
Operating profit/(loss) 4,372 (801)
Depreciation of property, plant and equipment 5,282 4,844
Amortisation of intangible assets 101 125
Depreciation of investment property 9 9
Property on disposal of property, plant and
equipment (122) (272)
Share based payment expense 174 153
------------------------------------------------- --------- ---------
Operating cash flows before movement in working
capital 9,816 4,058
------------------------------------------------- --------- ---------
(Increase)/decrease in inventories (750) 869
Increase in trade and other receivables (2,074) (10,688)
Increase in trade and other payables 1,280 6,437
Increase in provisions 102 97
------------------------------------------------- --------- ---------
Cash generated from operations 8,374 773
------------------------------------------------- --------- ---------
Income tax received / (paid) - 1,408
------------------------------------------------- --------- ---------
Net cash generated from operating activities 8,374 2,181
------------------------------------------------- --------- ---------
Cash flows from investing activities
Purchases of property, plant and equipment (4,946) (2,135)
Disposal of property, plant and equipment 384 899
Disposal of assets held for sale - 700
Acquisition of subsidiary, net of cash acquired - (780)
Purchases of intangibles (176) -
Net cash absorbed in investing activities (4,738) (1,316)
------------------------------------------------- --------- ---------
Cash flows from financing activities
Repayment of bank borrowings (812) (12)
Principal paid on lease liabilities (3,637) (3,930)
Interest paid on lease liabilities (608) (553)
Interest paid on loans and borrowings (110) (49)
Interest received - 9
Net cash absorbed in financing activities (5,167) (4,535)
------------------------------------------------- --------- ---------
Net decrease in cash and cash equivalents (1,531) (3,670)
Cash and cash equivalents at beginning of year 8,518 12,188
Cash and cash equivalents at end of year 6,987 8,518
------------------------------------------------- --------- ---------
Consolidated statement of changes in equity
For the year ended 30 April 2022
Share Share Other Retained Total
Capital premium reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ --------- --------- --------- ----------- ---------
At 1 May 2020 (as previously
stated) 2,133 8,633 5,807 28,671 45,244
------------------------------ --------- --------- --------- ----------- ---------
Prior year restatement - - - 592 592
------------------------------ --------- --------- --------- ----------- ---------
At 1 May 2020 (as restated) 2,133 8,633 5,807 29,263 45,836
------------------------------ --------- --------- --------- ----------- ---------
Total comprehensive loss - - - (1,412) (1,412)
Share-based payments - - - 153 153
------------------------------ --------- --------- --------- ----------- ---------
Total changes in equity - - - (1,259) (1,259)
At 30 April 2021 (as
restated) 2,133 8,633 5,807 28,004 44,577
------------------------------ --------- --------- --------- ----------- ---------
Total comprehensive income - - - 1,860 1,860
Share-based payments - - - 174 174
------------------------------ --------- --------- --------- ----------- ---------
Total changes in equity - - - 2,034 2,034
At 30 April 2022 2,133 8,633 5,807 30,038 46,611
------------------------------ --------- --------- --------- ----------- ---------
NOTES:
1. Basis of preparation
The consolidated financial statements and announcement of Van
Elle Holdings plc for the year ended 30 April 2022 were authorised
for issue by the Board of Directors on 2 August 2022.
The financial information included within this 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 2022 has been extracted from the
statutory accounts on which an unqualified audit opinion has been
issued.
The statutory accounts for the year ended 30 April 2022 will be
delivered to the Registrar of Companies following the Company's
Annual General Meeting.
The Group financial statements have been prepared in accordance
with UK adopted International Accounting standards in conformity
with the requirements of the Companies Act 2006.The Group financial
statements have been prepared on the going concern basis and
adopting the historical cost convention.
Adoption of new and revised standards
New standards, interpretations and amendments effective from 1
May 2021
During the year, the Group has adopted the following new and
revised Standards and Interpretations. Their adoption has not had
any significant impact on the accounts or disclosures in these
financial statements:
-- IFRS 3 Business Combinations;
-- IAS 16 Property, Plant and Equipment;
-- IAS 37 Provisions, Contingent Liabilities and Contingent Assets; and
-- Annual Improvements to IFRSs (2018-2020 Cycle): IFRS 1; IFRS
9; Illustrative Examples Accompanying IFRS 16; and IAS 41.
New standards, interpretations and amendments not yet
effective
The Group has not early adopted the following new standards,
amendments or interpretations that have been issued but are not yet
effective:
-- IFRS 17 Insurance contracts including Amendments to IFRS 17 (issued on 25 June 2020);
-- Amendments to IAS 1: Classification of Liabilities as Current or Non-current;
-- Amendments to IAS 8 - Definition of Accounting Estimates;
-- Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting policies;
-- Amendments to IAS 12 - Deferred Tax related to Assets and
Liabilities arising from a Single Transaction; and
-- Amendment to IFRS 17 - Initial Application of IFRS 17 and IFRS 9 - Comparative Information.
2. Segment information
The Group evaluates segmental performance based on profit or
loss from operations calculated in accordance with IFRS but
excluding non-recurring 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. 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 2022
Specialist Ground
General Piling Engineering Head
Piling and Rail Services Office Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- --------- ----------- ------------- --------- ---------
Revenue 38,974 45,771 40,043 127 124,915
----------------------------- --------- ----------- ------------- --------- ---------
Other operating
income - - - 438 438
----------------------------- --------- ----------- ------------- --------- ---------
Operating profit
/ (loss) 1,804 2,998 2,115 (2,545) 4,372
Finance expense - - - (779) (779)
Profit / (loss)
before tax 1,804 2,998 2,115 (3,324) 3,593
----------------------------- --------- ----------- ------------- --------- ---------
Assets
Property, plant and
equipment 9,341 12,589 8,145 8,644 38,719
Intangible assets 18 3,594 233 2 3,847
Inventories 1,251 1,163 1,320 39 3,773
----------------------------- --------- ----------- ------------- --------- ---------
Reportable segment
assets 10,610 17,346 9,698 8,685 46,339
Investment property - - - 811 811
Trade and other receivables - - - 34,434 34,434
Cash and cash equivalents - - - 6,987 6,987
Total assets 10,610 17,346 9,698 50,917 88,571
----------------------------- --------- ----------- ------------- --------- ---------
Liabilities
Trade and other payables - - - 22,475 22,475
Provisions - - - 7,737 7,737
Deferred consideration - - - 1,220 1,220
Lease liabilities - - - 6,854 6,854
Deferred tax - - - 3,674 3,674
Total liabilities - - - 41,960 41,960
----------------------------- --------- ----------- ------------- --------- ---------
Other information
Capital expenditure 2,097 2,462 1,207 254 6,020
Depreciation / amortisation 1,166 1,907 1,296 913 5,282
----------------------------- --------- ----------- ------------- --------- ---------
Operating segments - 30 April 2021
Specialist Ground
General Piling Engineering Head
Piling and Rail Services Office Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- --------- ----------- ------------- --------- ---------
Revenue 27,340 29,345 27,596 87 84,368
-------------------------------------- --------- ----------- ------------- --------- ---------
Other operating income - - - 597 597
-------------------------------------- --------- ----------- ------------- --------- ---------
Underlying operating profit / (loss) 295 1,035 247 (2,283) (706)
Non-underlying items - - - (95) (95)
-------------------------------------- --------- ----------- ------------- --------- ---------
Operating profit / (loss) 295 1,035 247 (2,378) (801)
Finance expense - - - (607) (607)
Finance income - - - 9 9
-------------------------------------- --------- ----------- ------------- --------- ---------
Profit / (loss) before tax 295 1,035 247 (2,976) (1,399)
-------------------------------------- --------- ----------- ------------- --------- ---------
Assets
Property, plant and equipment 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 - - - 1,702 1,702
Total liabilities - - - 41,920 41,920
-------------------------------------- --------- ----------- ------------- --------- ---------
Other information
Capital expenditure 96 1,154 2,231 203 3,684
Depreciation / amortisation 1,152 1,601 1,137 1,087 4,977
-------------------------------------- --------- ----------- ------------- --------- ---------
There are no individual customers accounting for more than 10%
of Group revenue in the current or preceding year. All revenue is
generated in the UK.
3. Revenue from contracts with customers
Disaggregation of revenue - 30 April 2022
Specialist Ground
General Piling Engineering Head
Piling and Rail Services Office Total
End market GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- ----------- ------------- --------- ---------
Residential 13,569 6,346 33,392 - 53,307
Infrastructure 5,224 34,333 3,821 - 43,378
Regional construction 20,177 4,872 2,830 - 27,879
Other 4 220 - 127 351
----------------------- --------- ----------- ------------- --------- ---------
Total 38,974 45,771 40,043 127 124,915
----------------------- --------- ----------- ------------- --------- ---------
Head office revenue relates to revenue generated from the
provision of training services.
Disaggregation of revenue - 30 April 2021
Specialist Ground
General Piling Engineering Head
Piling and Rail Services Office Total
End market GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- ----------- ------------- --------- ---------
Residential 8,009 6,275 23,085 - 37,296
Infrastructure 6,765 19,302 2,396 - 28,464
Regional construction 12,529 3,768 2,112 - 18,481
Other 37 - 3 87 127
----------------------- --------- ----------- ------------- --------- ---------
Total 27,340 29,345 27,596 87 84,368
----------------------- --------- ----------- ------------- --------- ---------
4. Other non-underlying items
2022 2021
GBP'000 GBP'000
------------------- ---------- ---------
Exceptional costs - 95
------------------- ---------- ---------
The Group's non-underlying items in FY2022 include a credit of
GBP362,000 relating to the reduction in the deferred consideration
due in respect of the acquisition of ScrewFast and a charge of
GBP350,000 relating to two warranty claims arising in the year. The
total net value of GBP12,000 is recognised within administration
expenses and forms part of underlying operating profits.
Prior year exceptional costs relate to the acquisition costs for
the purchase of ScrewFast Foundations Limited on 1 April 2021.
5. Income tax expense
2022 2021
GBP'000 GBP'000
--------------------------------------------------- --------- ---------
Current tax credit
Current tax on profit/loss for the year - -
Adjustment for over-provision in the prior
period (238) (554)
--------------------------------------------------- --------- ---------
Total current tax credit (238) (554)
--------------------------------------------------- --------- ---------
Deferred tax expense
Origination and reversal of temporary differences 842 (184)
Adjustment for over-provision in the prior
period 396 751
Effect of decreased tax rate on opening balance 733 -
--------------------------------------------------- --------- ---------
Total deferred tax expense 1,971 567
--------------------------------------------------- --------- ---------
Income tax expense 1,733 13
--------------------------------------------------- --------- ---------
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 profit/(loss) for the year are as follows:
2022 2021
GBP'000 GBP'000
--------------------------------------------- --------- ---------
Profit / (loss) before income taxes 3,593 (1,339)
--------------------------------------------- --------- ---------
Tax using the standard corporation tax rate
of 19% (2021: 19%) 683 (266)
Adjustments for over provision in previous
periods 159 197
Expenses not deductible for tax purposes 104 121
Income not taxable (40) (39)
Unused tax losses for which no deferred tax - -
asset has been recognised
Tax rate changes 1,072 -
Previously unrecognised tax losses (30) -
Capital allowances super deductions (215) -
--------------------------------------------- --------- ---------
Total income tax expense 1,733 13
--------------------------------------------- --------- ---------
During the year ended 30 April 2022, corporation tax has been
calculated at 19% of estimated assessable profit for the year
(2021: 19%).
The March 2021 Budget announced a further increase to the main
rate of corporation tax to 25% from 1 April 2023. This rate was
substantively enacted on 24 May 2021, as a result, deferred tax
balances as at 30 April 2022 are measured at 25% resulting in a
deferred tax charge of GBP1,072,000 in the year.
6. Earnings per share
The calculation of basic and diluted earnings per share is based
on the following data:
Restated
2022 2021
'000 '000
----------------------------------------- -------- ---------
Basic weighted average number of shares 106,667 106,667
----------------------------------------- -------- ---------
GBP'000 GBP'000
----------------------------------------- -------- ---------
Profit / (loss) for the year 1,860 (1,412)
----------------------------------------- -------- ---------
Add back / (deduct):
Non-underlying items - 95
Underlying profit / (loss) for the year 1,860 (1,317)
----------------------------------------- -------- ---------
Pence Pence
----------------------------------------- -------- ---------
Earnings per share
Basic 1.7 (1.3)
Diluted 1.7 (1.3)
Basic - adjusted* 2.7 (1.2)
Diluted - adjusted* 2.7 (1.2)
----------------------------------------- -------- ---------
*The adjusted earnings per share is based on profit/(loss) for
the year adjusted for non-underlying items of GBPNil (2021:
GBP95,000) and corporation tax rate changes amounting to
GBP1,072,000 (2021: GBPNil) (refer to note 5). This tax rate change
is a one-off deferred tax charge relating to future corporation tax
rate changes enacted during the year. Share based payment changes
have been reclassified from non-underlying profits to underlying
profits in the current year and the prior year earnings per share
has been restated to reflect this reclassification. The Directors
consider this measure provides an additional indicator of the
underlying performance of the Group.
There is no dilutive effect of the share options, as in the
previous year 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 (2021: 106,666,650), being the weighted average
number of ordinary shares.
7. Analysis of cash and cash equivalents and reconciliation to net debt
Cash Non-cash
2021 flows flows 2022
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- --------- --------- --------- ---------
Cash at bank 8,480 (1,532) - 6,948
Cash in hand 38 1 - 39
------------------------------- --------- --------- --------- ---------
Cash and cash equivalents 8,518 (1,531) - 6,987
Loans and borrowings (812) 861 (49) -
Lease liabilities (9,417) 4,245 (1,681) (6,853)
------------------------------- --------- --------- --------- ---------
Net funds/ (debt) including
IFRS 16 property and vehicle
lease liabilities (1,711) 3,575 (1,730) 134
------------------------------- --------- --------- --------- ---------
Cash flows in respect of lease liabilities include interest paid
on leases of GBP608,000 (2021: GBP553,000) and principal paid of
GBP3,637,000 (2021: GBP3,930,000).
Non-cash flows in respect of lease liabilities includes the
purchase of GBP1,074,000 of fixed assets on long term hire and
interest expense of GBP608,000 (2021: GBP553,000).
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