Van Elle has warned its full-year revenue will be 5 per cent below expectations, citing delays and changes to the delivery approach on key schemes.
The ground engineering specialist, which floated on London’s Alternative Investment Market last October, said today that a number of contracts in its rail business had suffered from “starts [being] delayed or called off” since February.
“This has been driven partly by delays and changes to design, contractors and delivery approach on programmes including the electrification of parts of the UK’s rail network,” Van Elle said in an update to the City.
The group said it now expected revenue in the year to 30 April to come in at £93m, despite solid trading in its other divisions. This would still be up from £84.2m in the previous year.
Van Elle also warned that the group’s underlying operating margin would be “slightly reduced”.
The firm’s share price had slumped by around a fifth by mid-morning today.
Earlier this month, Van Elle revealed its group managing director Thomas Lindup had left the firm with immediate effect and would not be directly replaced.
The firm’s founder and chairman Michael Ellis retired at the end of last year.
Van Elle, which works across sectors including airports, commercial, education, rail, highways and housing, had performed strongly in its third quarter, with revenue in the nine months to end of January up 16 per cebt to £70.8m.
Analysts Peel Hunt said it now expected Van Elle’s full-year pre-tax profit to decline 11 per cent to £11m.
However, looking ahead, Van Elle said it “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”.
Van Elle chief executive Jon Fenton revealed to Construction News earlier this year that the firm was in talks to buy several companies.