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Carillion and bad weather dent Van Elle profit

Carillion debts and weather disruption have contributed to a 1.2 per cent fall in pre-tax profit at Van Elle for the year to 30 April 2018.

Revenue at the ground engineering specialist was up 10 per cent to £103.9m, compared with £94.1m the previous year, with the firm recording a profit of £9.2m, down slightly from £9.3m.

Margin dropped to 8.8 per cent for the year to 30 April 2018, down from 9.8 per cent in the previous 12 months.

Van Elle had to write off £956,000 in bad debt as a result of Carillion’s liquidation, its accounts show.

The firm also incurred costs of £238,000 as a result of an aborted acquisition and the extraordinary general meeting called by founder Michael Ellis in December last year.

Van Elle chairman Adrian Barden said contract delays had also been a factor in the fourth quarter of the year.

“The second half was significantly impacted by a number of factors including the liquidation of Carillion in January 2018, the disruption caused by the severe weather experienced in the UK between January and March 2018, and the delay of a small number of important contracts in Q4,” he said.

The chairman said the fall in margin was a result of two rail contracts secured in the first half of the year, as well as a loss-making job in its ground engineering services division.

Mr Barden revealed that the company was looking to make changes to its risk-profiling processes as a result.

“Robust internal risk controls have been introduced so that we identify and understand all our risk starting at the bidding stage, and apply rigorous management and monitoring of contract performance to ensure the circumstances resulting in each of these situations do not occur again.”

Following the collapse of Carillion in January, Van Elle told CN it had “demobilised” from Carillion Network Rail sites and would not return until it had a “firm contractual arrangement in place”.

In May, the specialist confirmed it had restarted work on some of these contracts.

Today’s announcement also revealed that Van Elle had brought forward the start date for its new chief executive, former Balfour Beatty MD Mark Cutler.

Mr Cutler was the managing director of the Balfour Beatty / Vinci HS2 JV. He will take up the post at the start of August.

CN100 2018 IS COMING

This year’s definitive ranking of the top 100 contractors in UK construction is coming soon.

Should your company qualify? To discuss your firm’s financial performance, contact David Price at david.price@emap.com or on 020 3953 2218.

 

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