Van Elle issues profit warning after contract delays

Van Elle, theNottinghamshire geotechnical engineering contractor, has issued a profit warning this morning (22 March) after a delay in the start date on a number of contracts.

The firm, whose managing director Tom Lindup announced he was leaving the firm earlier this month, says there were a number of contracts within the Specialist Piling division expected to be confirmed and commenced in the second half, particularly in the division’s on-track rail business.

Van Elle now anticipates the start date for several of these contracts will be delayed beyond the end of the current financial year and, in a small number of cases, the expected call-off schedule and distribution of work packages may be revised.

A statement from the firm reads: “Whilst Van Elle still expects to deliver a number of these contracts on revised time schedules, the Group will not receive the previously expected contribution from them in the current financial year. As a result, the Board now expects to deliver full year revenue of approximately £93m, some five per cent. below its previous expectations, with the Group’s underlying operating margin slightly reduced as a result of the adverse mix impact. Cash generation in the Group remains strong and the Board intends to recommend a final dividend in line with its expectations at the time of the IPO.

Van Elle says it is also looking into a possible liability related to material bonus payments allegedly due to a former employee pursuant to historic employment arrangements.

The firm said: “The Board is continuing to actively investigate this matter and has been advised that any claim would be contestable on a number of grounds and accordingly it will actively resist the payment of any monies in relation to this matter. The company will provide a further update as appropriate.”