Profits cut in half as engineering firm digs in
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Profits at Van Elle fell by more than half in a “year of transition” at the Nottinghamshire engineering firm.
It had prepared the stock market for the disappointing figures last week when it issued a profit warning on the back of having to “adjust a small number of specific balance sheet items and contract accruals”.
This morning it has published its financial figures for the year to April 30, which showed a 15% drop in revenue to £88.5m.
Pre-tax profits were down 57%, to £4.0m, which has resulted in the dividend being slashed – down by nearly half, to 2p.
Van Elle’s chief executive Mark Cutler said: “This has been a year of transition for the business, having taken action to strengthen the leadership team, refine the Group’s commercial approach, streamline operations and re-focus on our customers.
“The Group is continuing to experience customer uncertainty as well as some heightened competitive pressure, resulting in a quiet start to the current year in some segments and increased volatility in month on month performance.”
Although Cutler is upbeat about the “operational improvement” of the business, evidenced by recent contract wins, he was careful not to be unduly optimistic about the year ahead.
He added: “Whilst the benefits of our self-help initiatives should drive improved performance in the business, the ability to make overall progress in FY20 will require supportive market conditions as we progress through the year.”