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Mon September 24 2018

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Van Elle to take Carillion hit in second half

25 Jan Foundations specialist Van Elle has reported solid growth in its interim results but is braced for bad debts from the collapse of Carillion.

In the six months ended 31 October 2017, Van Elle generated turnover of £52.6m, up 22% on the same period a year before. Pre-tax profit for the half-year was up 65% to £5.3m (2016: £3.2m).

However, Van Elle has done a lot of work for Carillion on the railways. As previously reported, its outstanding debt and work-in-progress exposure with Carillion is £1.6m and it has £2.5m of anticipated Carillion work in the second half of the current year.

Chief executive Jon Fenton said: “Whilst the group is continuing to engage with the Official Receiver in respect of this outstanding balance, it is now expected that we may recognise an exceptional bad debt charge of approximately £1.6m in its full year results. All of this debt arose after 31st October 2017. We have also had constructive dialogue with both the Official Receiver and Network Rail in respect of the £2.5m of anticipated revenue and whilst it is possible that some of the anticipated contracts may be delivered in the current year, the status and timing of specific programmes remains uncertain. Van Elle would typically expect to achieve good margins on rail-related work and therefore these anticipated contracts are material in the context of the group’s financial results.  The board believes it is prudent at this stage to recognise that the disruption to the expected order book due to the situation at Carillion will impact the group’s ability to achieve its previous expectations for the year as a whole.”


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