Since listing on the Alternative Investment Market (AIM) in 2016 the piling contractors has had a turbulent time, with founder Michael Ellis first retiring and then trying to come back and effect a boardroom coup. The company was then hit by the collapse of Carillion and workload drying up.
For the six months to 31st October 2018 Van Elle has reported interim pre-tax profit of £2.4m, down from £5.3m for the same period in 2017, on revenue down 18% to £42.9m.
And it said that the full-year results would be "significantly below previous expectations".
The half-year result included a £300,000 restructuring charge for actions taken by new chief executive Mark Cutler, who joined from Balfour Beatty in August 2018 following the retirement of Jon Fenton. Further cost reduction measures are being rolled out in the second half of the financial year, including consolidation of the group's two largest operations into a single site.
Among measures taken by Mark Cutler since his arrival has been senior management changes, with the appointment of John Foster as commercial director and Peter Handley as business improvement director.
Sales to the house-building sector continue to make up the majority of Van Elle revenues at 50.8% (H1 2018: 50.0%) but they decreased in the half-year by 17% to £21.8m (H1 2018: £26.3m). Infrastructure sector sales also decreased, by 23%, to £12.2m (H1 2018: £15.8m) with sales to the commercial & industrial sector increasing slightly to £8.3m (H1 2018: £8.2m).
The first half also saw a planned slowdown in rig fleet expansion with capital expenditure of just £600,000 (H1 2018: £2.7m). After five rig disposals, the fleet now consists of 119 piling rigs.
"This is a transitional year for the business and since my arrival in August 2018, I have been undertaking a full review of the business,” Mark Cutler said. “As part of this process I have been taking action to refine the group's commercial approach, streamline operations, strengthen the leadership team and re-focus on our key customers. This is already creating a strong platform from which to pursue our growth strategy.
"The third quarter has been more challenging than we anticipated, with a disappointing performance in general piling and several project delays. As a result and despite good momentum being carried in from the first half, we don't believe we will be able to deliver the significant step up in performance during the second half that we anticipated at the time of our trading statement in December 2018.
"These challenges have been frustrating, but it is pleasing to see outlook for the final quarter remaining robust and with a strong pipeline of target projects providing good forward visibility.
"Whilst we are mindful of the wider market environment, we are confident that the initiatives we are taking will develop a strong platform for future strong, profitable growth."