Van Elle has revelead that its turnover will be 5% lower than planned this year because of new contracts not moving ahead on the envisaged timescale.
Several contracts within Van Elle’s specialist piling division, particularly in its on-track rail business, were expected to be confirmed started before the end of its financial year on 30th April 2017 but they have now been bumped into next year's accounts.
“The company 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,” Van Elle said today. “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 5% below its previous expectations, with the group's underlying operating margin slightly reduced as a result of the adverse mix impact.”
It added: “Looking ahead, Van Elle continues to be optimistic about the long term opportunity within its rail business, given the ongoing need for maintenance of the UK track network as well as significant capital programmes such as track-bed stabilisation and the electrification of major routes. However, the delay and deferral of contracts in the fourth quarter is disappointing and creates some uncertainty around this market in the near term. In light of this, the board believes that it would be prudent to assume only a modest increase in the level of rail activity, and growth in the specialist piling division as a whole, in the coming year until visibility over a number of programmes becomes clearer.”