Prelim Results, Analyst & Investor Presentations

23 July 2025

Van Elle Holdings plc

('Van Elle', the 'Company' or the 'Group')

Unaudited Preliminary Results for the year ended 30 April 2025

Analyst Briefing & Investor Presentation

Positioned for growth across key markets

Van Elle Holdings plc, the UK's largest ground engineering contractor, announces its unaudited results for the year ended 30 April 2025.

Note: Van Elle Canada Inc. has been classified as a discontinued operation and is excluded from the Group's financial results, which are presented below as continuing operations. The prior year comparatives have been restated accordingly. See note 4 for further details of discontinued operation performance.

1. Revenue including discontinued operations in year to 30 April 2025 of £134.0m (30 April 2024: £139.5m).

2. EBITDA is defined as earnings before interest, tax, amortisation and depreciation.

3. Non-underlying items in the year to 30 April 2025 relate to costs (£86,000) and deferred consideration (£410,000) associated with the acquisition of Albion Drilling, and Group restructuring costs (£116,000).

4. Net funds/(debt) is defined as cash and cash equivalents less loans and borrowings and lease liabilities. IFRS 16 property and vehicle lease liabilities as at 30 April 2025 were £5.1m (30 April 2024: £4.9m).

Highlights

· Resilient performance delivered against a backdrop of macroeconomic uncertainty and continued market headwinds.

· Revenue from continuing operations of £130.5m (FY2024: £139.1m), representing a 6% year-on-year decrease, demonstrating a robust performance given the challenges.

· Underlying operating profit of £5.5m (FY2024: £6.9m), underpinned by a strong performance in Specialist Piling and Rail, offset by weaker volumes in General Piling.

· Underlying operating margin of 4.2% (FY2024: 5.0%), reflecting lower activity levels partially mitigated by ongoing cost control initiatives.

· Underlying return on capital employed of 11.2% (FY2024: 13.6%), impacted by lower earnings but supported by ongoing efforts to optimise asset utilisation and capital discipline.

· Residential sector softness impacted volumes negatively, including significant delays to the Building Safety Act approvals process.

· The Canadian subsidiary, which is no longer considered core for the Group, is treated as a discontinued operation and the Board's strategic review is expected to conclude during FY2026.

· Successful acquisition of Albion Drilling in October 2024, significantly enhancing the Group's technical offering and expanding its footprint in Scotland, with a strong focus on energy sector growth.

· Disciplined capital management maintained resulting in a strong balance sheet with a bank facility of up to £8.0m to support and underpin organic growth as well as to fund bolt-on M&A opportunities.

· Proposed final dividend of 0.8 pence per share, maintaining a full year dividend of 1.2p (FY2024: 1.2p), reflecting the Board's confidence in the outlook and commitment to shareholder returns.

Current trading and outlook

· The Group is in a strong position to benefit from anticipated improvements across its core end markets.

· Significant opportunity in the energy sector, where revenues are expected to reach £40m per annum from FY2027 (less than £5m sector revenue delivered in FY2025), based on our assessment of targeted projects in the planning pipeline.

· Residential sector expected to recover in the medium term, supported by several government commitments to increase housing supply and recent measures aimed at addressing delays associated with the Building Safety Act.

· Increased activity in the rail and water sectors is anticipated, aligned with investment under CP7 and AMP8 regulatory cycles, respectively.

· Continued focus on fleet reorientation towards higher margin opportunities, with capital allocation prioritised to support growth in infrastructure sectors.

· Strategic partnership agreed with VolkerWessels UK post year-end, including the acquisition of concrete piling assets of Volker Ground Engineering, further strengthening the Group's customer base in infrastructure.

· Order book has grown to £41.5m as at 30 April 2025 (30 April 2024: £35.1m), and increased to £52.7m as at 30 June 2025 (30 June 2024: £35.3m).

· The Board remains confident in achieving the recently revised market expectations for the current year*.

* Company compiled analyst consensus for FY2026 is revenue of £149.1m and underlying profit before tax of £6.4m.

Mark Cutler, Chief Executive, commented:

"Whilst FY2025 presented challenges, Van Elle succeeded in delivering a resilient performance and continuing to broaden its range of complementary services, both organically and by selective acquisition. As a result, the Group remains in a very strong position to benefit from expected improvements in many of its end markets, most of which are aligned with the Government's investment priorities.

"With a strong existing order book and solid balance sheet, the business continues to win important new framework agreements and partnerships, which gives the Board confidence in the prospects for the Group."

Analyst Briefing: 10.00am on Wednesday 23 July 2025

A briefing for Analysts will be held at 10.00am this morning - Wednesday 23 July 2025. Analysts interested in attending should contact Walbrook PR on [email protected] or 020 7933 8780.

Investor Presentation: 3.30pm on Wednesday 23 July 2025

Mark Cutler, Chief Executive Officer, and Graeme Campbell, Chief Financial Officer, will hold a presentation to review the results and update its growth strategy at 3.30pm on Wednesday 23 July 2025, through the digital platform Investor Meet Company.

Investors can sign up to Investor Meet Company for free and add to meet Van Elle Holdings plc via the following link https://www.investormeetcompany.com/van-elle-holdings-plc/register-investor.

Investors who have already registered and added to meet the Company will automatically be invited. Questions can be submitted pre-event to [email protected], or in real time during the presentation via the "Ask a Question" function.

For further information, please contact:

About Van Elle Holdings plc:

Van Elle Holdings is the UK's largest specialist geotechnical engineering contractor. Formed in 1984 and listed on AIM in 2016, the Company provides a wide range of ground engineering techniques and services including ground investigation, general and specialist piling, rail geotechnical engineering, modular foundations, and ground improvement and stabilisation services.

Van Elle operates through three divisions: General Piling, Specialist Piling and Rail, and Ground Engineering Services; and is focused on diverse end markets including residential and housing, infrastructure and regional construction - across which the Group has completed more than 20,000 projects over the last 35 years.

CHAIRMAN'S STATEMENT

Overview

The Group has delivered a resilient performance, in line with revised expectations, despite a challenging macroeconomic backdrop and continued softness across some of our core markets.

Activity levels improved towards the end of the first half, however this momentum was not sustained throughout the second half as market conditions deteriorated. Revenue was primarily impacted by project delays as customers deferred decisions in response to macroeconomic and sector-specific uncertainties.

While trading conditions were subdued by broader market issues, including the Building Safety Act delaying residential schemes in housing and the transition from CP6 to CP7 in rail, there is optimism that workflow pipelines are unblocking, with the Group well-placed to service these delayed opportunities.

As we had identified, the energy sector in Scotland is proving to be a significant area of opportunity and is expected to play an increasingly important role in the Group's growth over the medium term. Further detail is included in the Chief Executive's Report.

The Board are reviewing strategic options of the Canadian subsidiary, which is treated as a discontinued operation in these financial results. The Board's strategic review is expected to conclude during FY2026.

Looking ahead, the Board remains confident that Van Elle is strongly positioned to benefit from a market recovery. With a highly diversified service offering, comprehensive UK regional coverage and strong sector alignment, the Group is well placed to support accelerating activity in housing and infrastructure. As these markets recover and investment and positive sentiment begin to return, the Group operates early in the supply change and therefore expects to benefit from early momentum, underpinned by a growing order book and robust pipeline of opportunities.

Capital structure and allocation

The Group continues to maintain a strong balance sheet, with low levels of debt and access to a flexible borrowing facility of up to £8.0m.

As part of our ongoing focus on maximising return on capital employed, the Group has taken proactive steps to streamline its asset base and release capital from non-core assets. During the second half of the year, the sale of underutilised freehold land and buildings generated £1.6m in cash proceeds.

Following the year end, the Group also completed the disposal of its transport fleet to WS Specialist Logistics, alongside entering into an outsourced transport services arrangement. This transaction generated a further £2.9m in cash and enables enhanced operational flexibility while reducing capital intensity. In light of these developments, the Group's borrowing facility was reduced from £11.0m to £8.0m in May 2025. The facility remains revolving in nature, secured against receivables and certain tangible assets and is committed through to September 2026.

As at 30 April 2025, net funds (excluding IFRS 16 lease liabilities) stood at £1.1m (30 April 2024: £5.5m). Cash flow movements during the year included:

· £3.4m in acquisition consideration;

· £1.3m in dividend payments;

· An increase in working capital, including delayed R&D tax credit receipts (received in full post year-end);

· A £2.4m outflow from the discontinued Canadian operation; and

· £5.9m of new debt drawn, comprising both facility usage and new hire purchase arrangements.

The Group remains committed to investing in its market-leading fleet of approximately 150 rigs. Capital expenditure for the year totalled £5.0m (FY2024: £5.5m), with £3.6m funded from cash resources. Spend was modestly below expectations, primarily due to extended lead times on new rig deliveries and prudent capital management in light of ongoing market volatility.

The Board continues to evaluate selective bolt-on acquisition opportunities that are earnings accretive and strategically aligned with the Group's core capabilities. This disciplined approach ensures that future acquisitions will enhance the Group's long-term value and strengthen its market position.

Dividend

The Board remains committed to delivering sustainable shareholder returns, whilst maintaining a prudent and balanced approach to capital allocation. This reflects the Group's ongoing investment requirements, particularly in maintaining a market-leading fleet of rigs, as well as the strategic opportunities available to support long-term growth.

Following another year of profitable performance, the Board is pleased to recommend the payment of a final dividend of 0.8p per share (FY2024: 0.8p per share). If approved, the proposed FY2025 will be paid on 17 October 2025 to shareholders on the register as at the close of business on 3 October 2025. The shares will be marked ex-dividend on 2 October 2025.

An interim dividend of 0.4p per share (FY2024 interim dividend: 0.4p per share) was paid on 14 March 2025. The total dividend payable for FY2025 will therefore be 1.2p (FY2024: 1.2p).

Our people

We are committed to acting in a safe, sustainable, and responsible manner and recognise this is key to the long-term success of the business.

Health, safety, and wellbeing is our main priority, and we have made excellent progress in recent years to improve our safety performance. The RIDDOR Accident Frequency Rate (AFR) increased slightly to 0.12 in FY2025 (FY2024: zero).

On behalf of the Board, I would like to thank all our employees for their hard work and commitment over the past year, and during this period of challenging market conditions.

Board and governance

The Board's composition is reviewed regularly to ensure that we continue to have an appropriate mix of expertise and experience within the Board. There were no changes to the Board in the current year, which has provided a stable platform as we continue to deliver the Group's strategy.

In the previous year, a comprehensive internal performance review was completed, with an associated action plan developed to ensure continuous improvement of the Board's effectiveness.

I would like to extend my thanks to my Board colleagues for their significant contribution and commitment over the past year.

The Group is committed to the highest standards of corporate governance and prioritises effective shareholder communication and engagement. We continue to adopt the Quoted Companies Alliance Corporate Governance Code, complemented with other suitable governance measures appropriate for a group of our size.

Outlook

While market conditions remained challenging throughout FY2025 and into the early part of the new financial year, the Group is well-positioned to benefit from an anticipated recovery across several of its core sectors.

The medium-term outlook for our end markets is increasingly positive. In the housing sector a market recovery is expected, supported by recent government measures to accelerate Building Safety Act approvals, which would unlock a number of delayed residential schemes.

The energy sector continues to represent a significant long-term growth opportunity. Based on our assessment of targeted projects currently in the planning pipeline, we anticipate revenue in this sector could grow materially, expected to reach £40m a year by FY2027, with less than £5m revenues delivered in this sector in FY2025.

Alongside this improving market backdrop, the Group remains focused on disciplined capital allocation and actively reorienting the business toward higher-margin, higher-growth opportunities. This focus is expected to drive a progressive improvement in return on capital employed, supporting sustainable long-term value creation.

With a diversified service offering, a growing and high-quality order book, and exposure to structurally important sectors such as infrastructure, energy, and housing, the Group remains confident in its outlook and is well placed to capture emerging growth opportunities as activity levels recover.

Frank Nelson

Non-Executive Chair

22 July 2025

CHIEF EXECUTIVE'S STATEMENT

OPERATING REVIEW

Results

The Group delivered another resilient financial performance in FY2025 whilst market conditions remained very challenging across the sector with significant levels of uncertainty across the UK economy. In the piling industry, many businesses experienced lower volumes over recent months. Despite the softer market conditions, our revenue was only 6% below the prior year at £130.5m (FY2024: £139.1m).

In the residential sector, volumes were subdued throughout FY2025 as increased mortgage rates and general market uncertainty resulted in housebuilders commencing fewer project starts, particularly in the private housing market. Taller residential schemes were severely impacted by the Building Safety Act approvals process, which has caused significant delays to the commencement of numerous schemes, particularly in London.

In regional construction, similar market uncertainties have impacted investment, resulting in project delays throughout the year. The Group delivered several logistics hubs, data centres, commercial offices and industrial projects in the period and has now started its largest industrial project for several years at Forgemasters in Sheffield. Our outlook is positive in this sector as confidence starts to return during FY2026.

In infrastructure, UK rail revenues were impacted as the sector transitioned from CP6 into CP7, but were supported by our strong position on the TransPennine Route Upgrade project. In highways, works were completed very successfully on the Smart Motorways retrofit programme. Despite funding pressures and project delays, several major highways schemes were delivered in partnership with Galliford Try, with others in the pre-construction phase.

The Group is very well-positioned in the energy sector, where frameworks have been developed with several key customers supporting a very strong pipeline of opportunities, commencing primarily with ground investigation and design in FY2026, and foundation construction works commencing from FY2027 and beyond. Our broad capability is attractive to customers requiring a range of solutions to support the major energy sector projects. The acquisition of Stirling-based Albion Drilling in October 2024 provides additional capacity and specialist capability in Scotland, where many of the initial projects will commence across several investment streams, including Ofgem's Accelerated Strategic Transmission Investment (ASTI) programme.

The Government's recent Spending Review and 10-year UK Infrastructure Strategy and pipeline give increased confidence of the infrastructure sector being a key driver of growth for Van Elle in the medium to long term.

The Group's Canadian rail subsidiary delivered revenue growth but has been impacted by further delays to the Toronto Metrolinx GO Expansion programme, which was the primary reason for entering the Canadian rail market. Whilst we have been awarded contracts across the broader rail sector in Ontario, we have not yet been able to deliver adequate volumes to achieve a profitable performance. The Canadian subsidiary is under strategic review, which is expected to be concluded during FY26.

We have maintained a high focus on cost saving measures to manage the Group's cost base whilst the softer market conditions continue. Improved operational efficiencies puts the Group in a stronger position to take advantage of the anticipated market recovery.

The Group delivered underlying profit before tax for continuing operations of £5.3m (FY2024: £6.7m). Underlying operating margin was 4.2% (FY2024: 5.0%).

Balance sheet and net funds

The Group continues to maintain a strong balance sheet, low debt and significant liquidity headroom against its funding facility.

Net funds, excluding IFRS 16 property and vehicle lease liabilities, decreased to £1.1m at 30 April 2025 (30 April 2024: £5.5m). This reduction in net funds reflects cash outflows to support future growth, including £3.4m of consideration paid for acquisitions and capital expenditure of £5.0m, of which £3.6m was funded from cash reserves. To support these investment activities, the Group took on new debt of £5.9m in the year from a combination of a facility drawdown and new hire purchase contracts.

Working capital increased by £3.5m in the year, which includes the impact of £1.3m of delayed receipts for R&D tax claims (which were received after the year end) and the acquired balance sheet of Albion Drilling following the acquisition in October 2024. Aged debtors remain within the normal historical range for the Group with no significant debt collection issues anticipated as at the year end.

Dividends of £1.3m were paid in the year.

Group net debt remains well within our target leverage threshold of less than 1.5 times EBITDA.

Health and safety

The health, safety, and well-being of our employees is our first priority. We have made excellent progress in recent years delivering a significantly improved safety culture, which is reflected in the Group's Health and Safety KPIs.

In February 2024 the Group achieved a significant milestone of two years without a reportable accident (RIDDOR). Across FY2025 our RIDDOR Accident Frequency Rate (AFR) per 100,000 hours worked was 0.12 (FY2024: zero).

Our health, safety, quality and environment managers are embedded within the operational teams and conduct regular internal audits of our health and safety procedures and site activities. This ensures that our safety procedures are comprehensive and helps to identify areas for improvement where necessary.

People

Our people remain at the core of everything we do, and we are committed to attracting, developing, and retaining the talent needed to deliver safely and successfully across all areas of the business.

Our in-house training centre coordinates and delivers the Group's training needs. Following the successful launch of our Leadership Development Programme, a second cohort of future business leaders entered the programme in FY2025.

We also launched a bespoke site supervisor training programme to strengthen the leadership of our site management. The course was delivered to supervisors over three days, focused on practical, real-life scenarios to enhance supervisory skills, site safety, and management practices.

We are proud to maintain our commitment to early careers. The Group currently employs 36 apprentices, graduates under a formal development programme, and trainees.

Voluntary employee churn remained low at 13% (FY2024: 14%).

Strategy

Our medium term financial KPIs (annual revenue growth of 5-10%, underlying operating margins of 6-7%, ROCE of 15-20% and leverage of less than 1.5 times EBITDA) are the Group's primary strategic objectives.

Key strategic highlights in the year, which position the Group well for FY2026 and beyond, include:

- Signed an eight-year partnering agreement with Wood Transmission & Distribution Limited to deliver ground investigation, design, and construction activities for piling and foundations across several transmission schemes as part of Ofgem's Accelerated Strategic Transmission Investment (ASTI) programme.

- Acquired Albion Drilling, expanding Van Elle's presence in Scotland and further extending the Group's technical capabilities.

- Investment in sheet piling/rigid inclusion rigs and expansion of our civils capability to strengthen our integrated offering.

- Completed a capacity expansion project at the precast factories at our headquarters in Kirkby-in-Ashfield. The expanded pile factory increases production capacity by over 30%, positioning the business well to benefit from the expected growing demand in the housing sector over the mid-term.

- Established a strategic collaboration with M&J Evans to work together nationally on a customer-led basis to offer a more efficient, joined-up delivery model for housebuilders.

- Increased focus on Group ROCE performance resulting in the disposal of non-core property and several aged rig assets. The Group also outsourced all HGV fleet activities after the financial year end.

- Settlement of a long-standing legacy contract dispute (from 2012) in June 2024, within the Group's insured limits of cover.

Sustainability and ESG

The Group has implemented a Sustainability Strategy, aligned with the UN Sustainable Development Goals ("SDGs") that are applicable to the business operations. We recognise that our core operations rely on energy-intensive materials such as cement and steel. These industries are moving fast and making significant progress in developing cleaner technology for their manufacturing and operational processes.

Our long-term net zero by 2050 commitment is supported in the medium term by a roadmap to 2030 which provides a clear strategic pathway to a 30% reduction in our greenhouse gas emissions.

Our people actively engage with local communities, reinforcing our dedication to creating social value and making a long-term positive impact. We also collaborate with schools, colleges and universities to raise awareness of careers in construction, engineering, and geotechnical services.

Markets

The Group operates in three market segments:

· Residential constituted 40% of Group revenues in the year (down from 41% in FY2024). Divisional teams deliver integrated piling and foundation systems for national and regional housebuilders, retirement homes, and multi-storey residential properties.

Residential sector revenues decreased to £52.0m in FY2025 (FY2024: £57.2m).

In new build housing, demand was very strong in the first quarter of the previous financial year, making for a difficult comparator this year. New building regulations introduced towards the end of Q1 FY2024, resulted in the acceleration of multiple housing projects and provided a one-off increase to prior year revenues.

Volumes were subdued throughout FY2025, where increased mortgage rates and general market uncertainty resulted in housebuilders commencing fewer projects, particularly in the private housing market. A proportion of this impact continues to be mitigated by the Group's balanced exposure to affordable and partnership housing customers, but overall activity levels were below prior year levels by approximately 2%.

Notwithstanding the current challenging market conditions, the outlook for housebuilding remains very strong in the UK, supported by government pledges to build 1.5 million new homes in the current parliament and to speed up the planning process. The speed of delivery of the offsite manufactured Smartfoot system means that the division is well-positioned to support faster build times with less resources during a widely publicised skills shortage and to respond quickly as the market improves. Following some positive momentum towards the end of the first half of the financial year, order levels declined during the second half. However, the housing division is starting to see early signs of market improvement, and we are optimistic of sustained market improvement during FY2026.

The Group also delivers foundations for taller residential schemes, where the impact of the Building Safety Act has caused significant delays to the commencement of numerous schemes, particularly in London. Recent announcements by the government to recognise the issue and put processes in place to speed up decisions on new build schemes is encouraging.

During FY2025, we invested in our precast pile factory to expand capacity by over 30% and have further diversified our capabilities by offering in-situ beams. A collaboration with leading groundworker M&J Evans was also established to offer a joined-up service to major housebuilders.

· Infrastructure constituted 42% of Group revenues in the year (up from 39% in FY2024). The segment includes specialist ground engineering services to the rail, highways, coastal and flooding, energy, and utility sectors.

UK Rail revenues were impacted as the sector transitioned from CP6 into CP7, but activity levels steadily improved in the second half, supported by our strong position on the TransPennine Route Upgrade project.

Planned works in CP7 include greater focus on climate-related activities including slope stabilisation and drainage improvements which are expected to benefit the Group during the peak of CP7 activity during FY2027 to FY2029.

In the energy sector, frameworks have been agreed with several key customers. We have a promising pipeline of opportunities, commecing primarily with design and ground investigation projects in FY2026, with major foundation activities commencing from FY2027 and beyond.

As previously announced, the Group has signed an eight-year partnering agreement with Wood Transmission & Distribution Limited to deliver ground investigation, design, and construction activities for piling and foundations across several energy transmission schemes as part of Ofgem's Accelerated Strategic Transmission Investment (ASTI) programme.

Further progress has been made in the water sector, where investment under AMP8 is committed to almost double compared to AMP7. Customer partnerships exist across several regions including the previously announced partnerships with Galliford Try and Volker Wessels. Design solutions have been developed based on the Group's ScrewFast system which modularises and standardises simple foundations for lower carbon and faster delivery compared to traditional methods.

Government spending in the highways sector continues to be subdued, with works now completed on the Smart Motorway programme. The Group is focusing on delivering mid-sized projects for selected Tier 1 contractors in this sector.

· Regional Construction constituted 18% of Group revenues (from 19% in FY2024). The Group delivers a full range of piling and ground improvement services to the commercial and industrial sectors, from private and public sector building and developer-led markets across the UK.

The regional construction market remained very competitive throughout the year, with work-winning being extremely price sensitive. With a backdrop of softer market conditions resulting in lower tender opportunities this year, revenue decreased by 9%, primarily due to fewer larger schemes delivered by the General Piling division.

Industrial markets covering factories, data centres, and warehousing continue to offer significant opportunity for the Group's range of piling and ground improvement services as market confidence returns.

Operating structure

Van Elle's operational structure has remained consistent and is reported in three segments:

· General Piling: open site; larger projects; key techniques being large diameter rotary, CFA piling, precast driven piling, rigid inclusions, and vibro stone columns.

· Specialist Piling and Rail: restricted access and low headroom piling; extensive rail mounted capability; helical piling and steel modular foundations (ScrewFast); sheet piling, soil nails, and anchors, mini-piling and ground stabilisation projects.

· Ground Engineering Services: driven and CFA piling for housebuilders, precast concrete modular foundations (Smartfoot); ground investigation and geotechnical services (Strata Geotechnics).

General Piling

Revenue decreased by 19% in the year to £46.0m (FY2024: £56.7m), representing 35% of Group revenues.

The General Piling division operates across all of the Group's market segments and has been impacted by weaker market conditions, with limited opportunities for larger scale projects.

Residential sector revenues decreased by 21% compared to the previous year which primarily reflects challenging market conditions in both new build housing and high-rise residential activity. The division has been materially impacted by the Building Safety Act, which has caused delays to start dates of taller residential schemes, significantly impacting profitability, particularly in the London market.

Infrastructure revenue decreased by 23%, primarily due to the previous year benefiting from a large energy-from-waste contract, contributing approximately £7m revenue in H1 FY2024.

The Regional Construction sector has been more broadly impacted by lower confidence in the UK building market and as a result continued to be highly competitive with minimal large-scale opportunities.

Underlying operating profit for the division decreased to £0.6m (FY2024: £5.2m).

Specialist Piling and Rail

Revenue increased by 6% in the year to £46.1m (FY2024: £43.5m), representing 35% of Group revenues.

Specialist Piling activity levels increased by 6% compared to the previous year, reflecting completion of works on the Smart Motorway programme and stronger work-winning compared to a softer comparative period which was impacted by delays to highways work and a decrease in drill and grout activity. Contract margins remained strong due to the highly skilled nature of site works.

In the UK Rail sector, revenue was broadly flat compared to the previous year. The first half of the financial year saw subdued workload as the sector transitioned from CP6 into CP7 but second half activity levels recovered, supported by our operations on the TransPennine Route Upgrade project.

The medium and long-term outlook for the division's work in the infrastructure sector remains very encouraging, with significant growth opportunities in the high-voltage power sector supporting the development of the UK's electricity transmission networks, increased market share and spend as AMP8 in the water sector gains momentum, similar recovery in rail as CP7 spend levels normalise and stable revenues in highways as selected projects move towards construction.

Underlying operating profit for the division increased to £5.3m (FY2024: £2.6m).

Ground Engineering Services

Revenue was broadly consistent with the previous year at £38.1m (FY2024: £38.3m), representing 29% of Group revenues.

Ground Engineering Services consists of the Group's Housing division and Strata Geotechnics ('Strata'). The Housing division delivers integrated piling and Smartfoot foundation beam solutions to UK housebuilders. Strata delivers ground investigation, testing and monitoring services.

Housing division revenues decreased by approximately 2% compared to the previous year. Whilst the previous financial year was generally impacted by lower new build housing starts, the first quarter of FY2024 delivered very strong revenues (as housebuilders rushed to start projects before the legislation changed), before a decline in activity levels from the second quarter. The housing division is starting to see early signs of market improvement, and we are optimistic of sustained market improvement during FY2026.

Our diverse customer base, with additional exposure to partnership and affordable housing customers, where volumes were affected to a lesser extent, has partially mitigated the impact of the very soft private housebuilding market.

Following subdued activity levels in Strata during the first half of the financial year, strong progress was achieved in the second half with a significant increase in workload from the energy sector in Scotland. FY2025 revenue was slightly ahead of the prior year. Strata has a £30-40m pipeline of opportunities in the energy sector in Scotland over the next three years.

Underlying operating profit for the division was broadly consistent with prior year at £0.9m (FY2024: £0.9m).

Rig fleet

The Group operates over 150 rigs, and we continue to invest in the fleet to ensure that our market-leading capability is maintained. Investment decisions prioritise high utilisation and high margin activities where possible.

Total capital expenditure in the year was £5.0m (excluding new IFRS 16 leases), of which £3.6m was funded from cash reserves, primarily relating to acquisition of new rigs and some additional investment in the Group's property.

The Group also acquired £2.4m of plant and equipment at fair value (excluding leased assets) as part of the acquisition of Albion Drilling.

Outlook

Van Elle remains in a very strong position to benefit from expected improvements in many of our end markets.

The outlook for UK housebuilding is very strong in the medium term, with the government pledging 1.5 million new homes in the current parliament. For high-rise developments, the recent announcements by the Government to address Building Safety Act delays are encouraging.

In construction we are seeing an increased level of confidence for industrial schemes including logistics, data centres, prisons, schools and hospitals. 

In infrastructure, the government's recent Spending Review and 10-year UK Infrastructure Strategy and pipeline, give increased confidence for the sector to be a key driver of growth.

A key area of focus is the energy sector, where there are committed levels of investment and an expected national shortage of skills to deliver planned works in the UK. Van Elle is very well positioned to maximise the opportunity with a large skilled workforce and a broad range of capability to deliver on all ground engineering requirements. Revenues from the energy sector are expected to reach £40m per annum from FY2027 for 5-10 years, potentially 20% of Group revenues, from less than 5% currently.

Growth in the Rail and Water sectors is also anticipated, as activity levels are expected to accelerate during the CP7 and AMP8 investment cycles.

Key to all the above are the growing number of strategic customer partnerships that the Group has created with its top 5 customers in each sector, supported by frameworks or trading agreements. As a further example, a strategic partnership with VolkerWessels UK has commenced, including the acquisition of the concrete piling assets of Volker Ground Engineering.

The order book has grown to £41.5m as at 30 April 2025 (30 April 2024: £35.1m) and increased further to £52.7m as at 30 June 2025 (30 June 2024: £35.3m).

With exposure to the UK housing and infrastructure markets, our future confidence is supported by an increasing high-quality order book, coupled with a strong pipeline of future opportunities in our key markets.

Mark Cutler

Chief Executive Officer

22 July 2025

CHIEF FINANCIAL OFFICER'S STATEMENT

FINANCIAL REVIEW

Continuing revenue in the year to 30 April 2025 was below the previous financial year, down 6.1% in total. The reduction in revenues was driven primarily by softer market conditions due to market uncertainties. The residential and regional construction sectors have been impacted by lower levels of demand and project delays throughout the financial year. A strong end to the previous financial year resulted in a greater decline in H2 than H1 although total revenues were relatively balanced across the two halves of the year despite the traditionally low volume winter months within H2.

The Group's Canadian rail subsidiary delivered revenue growth during the year but has been impacted by further delays to the Toronto Metrolinx GO Expansion programme. As such, strategic options are under review and the Canadian operation is treated as a discontinued operation in the financial results. The results of the Canadian operation are not included in this financial review.

The Group tracks enquiries and activity levels by market sector, which helps to identify trends and target our activities into growth areas. The mix of revenue by end markets is shown below:

Residential:  Volumes were subdued throughout FY2025, where increased mortgage rates and general market uncertainty resulted in housebuilders commencing fewer projects, particularly in the private housing market. Taller residential schemes were severely impacted by the Building Safety Act approvals process, which has caused significant delays to the commencement of numerous schemes, particularly in London.

Infrastructure: Government spending in the highways sector continues to be subdued, with works now completed on the Smart Motorway programme. UK Rail revenues have been impacted as the sector transitioned from CP6 into CP7, but activity levels steadily improved in the second half, supported by our strong position on the TransPennine Route Upgrade project. In the energy sector, frameworks have been agreed with several key customers. The Group has signed an eight-year partnering agreement with Wood Transmission & Distribution Limited to deliver ground investigation, design and construction activities for piling and foundations across several energy transmission schemes as part of Ofgem's Accelerated Strategic Transmission Investment (ASTI) programme. There is a pipeline of opportunities, commencing primarily with design and ground investigation projects in FY2026, with major foundation activities commencing from FY2027 and beyond. Further progress has also been made in the water sector, where investment under AMP8 is committed to almost double compared to AMP7.

Regional construction: The regional construction market remained very competitive throughout the year, with work-winning being extremely price sensitive. With a backdrop of softer market conditions tender opportunities reduced in the year.

The mix of revenue by operating segment is shown below:

The General Piling division operates across all of the Group's market segments and has been impacted by weaker market conditions, with limited opportunities for larger scale projects. The previous year benefitted from a large energy-from-waste contract, contributing approximately £7m revenue in H1 of FY2024. The division has been materially impacted by the Building Safety Act in FY2025, which has caused delays to start dates of taller residential schemes. This has largely impacted the Group's London operations which reported a loss before tax of £1.6m in the year.

Specialist Piling activity levels increased compared to the previous year, reflecting completion of works on the Smart Motorway programme and stronger work-winning compared to a softer comparative period which was impacted by delays to highways work and a decrease in drill and grout activity. In the UK Rail sector, revenue was broadly flat compared to the previous year. The first half of the financial year saw subdued workload as the sector transitioned from CP6 into CP7 but second half activity levels recovered, supported by our operations on the TransPennine Route Upgrade project.

Ground Engineering Services consists of the Group's Housing division and Strata Geotechnics ('Strata'). Housing division revenues decreased by approximately 2% compared to the previous year as volumes continued to be subdued throughout the period. Our diverse customer base, with additional exposure to partnership and affordable housing customers, where volumes were affected to a lesser extent, has partially mitigated the impact of the very soft private housebuilding market. Following subdued activity levels in Strata during the first half of the financial year, strong progress was achieved in the second half with a significant increase in workload from the energy sector in Scotland.

Head office revenues relate to the provision of training services delivered through the training facility located at Kirkby-in-Ashfield.

Operating profit

Total operating profit and total underlying operating profit declined in FY2025 due to lower activity levels. Gross margin improved by 0.7% in FY2025 to 31.0% (FY2024: 30.3%). This improvement is predominately due to mix with subdued housing volumes where margins are typically at the lower end of the Group's margin range and increased volumes in the Group's more specialist activities which achieve a higher margin rate. Administrative expenses were consistent year on year. The Group's underlying operating profit includes income from R&D tax credits of £2,833,000 (FY2,365,000).

On an underlying basis the Group reports an operating margin of 4.2% (FY2024: 5.0%).

Alternative performance measures

The Group presents alternative performance measures (APMs), which are not defined or specified under the requirements of IFRS. The Group believes that these APMs provide depth and understanding to the users of the financial statements to allow for further assessment of the underlying performance of the Group and comparability from one year to the next.

The Board believes that the underlying performance measures for operating profit, profit before tax and EPS, stated before the adjustment for non-underlying items give a clearer indication of the actual performance of the business.

The Group's non-underlying items in FY2025 include £86,000 of fees associated with the acquisition of Albion Drilling on 28 October 2024 as well as £410,000 of contingent deferred consideration in relation to the acquisition. A condition of the deferred consideration requires the sellers to remain in employment during the deferred consideration period and as such this has been treated as remuneration and recognised as a non-underlying cost in the profit and loss. Management restructure costs of £116,000, being the remaining costs incurred in the restructure programme which commenced at the end of FY2024 are also classified as non-underlying.

The Group's non-underlying items in FY2024 include £228,000 of fees associated with the acquisition of Rock & Alluvium on 30 November 2023, a health and safety penalty of £250,000 in relation to the fatality of a third party haulier following the failure of a Van Elle piling rig in April 2021, management restructure costs of £83,000 being the initial costs incurred for a restructure programme which commenced at the end of FY2024, research and development credits of £894,000 relating to FY2022 and FY2023 which are considered one-off in nature, and a credit of £149,000 for interest received on a protracted legal settlement that was concluded after the year end.

Net finance costs

Net finance costs were £227,000 in the current year (2024: £237,000). Finance costs relate to interest on hire purchase agreements and interest on property and vehicle lease liabilities classified under IFRS 16. In FY2025 net finance costs include £186,000 of interest received on cash balances (2024: £102,000).

Taxation

The effective tax rate in the year is 32.0% (2024: 25.7%). The increased effective tax rate in the current financial year is as a result of the deferred contingent consideration charged to the p&l as remuneration which is not tax deductible together with an under provision in the previous year.

Dividends

An interim dividend of 0.4p (2024: 0.4p) was paid on 14 March 2025. The Board is recommending a final dividend of 0.8p (2024: 0.8p) taking the total dividend payable for the year to 1.2p (2024: 1.2p).

Subject to approval at the Annual General Meeting on Thursday 25 September, the recommended final dividend will be paid on 17 October 2025 to shareholders on the share register as at 3 October 2025. The associated ex-dividend date will be 2 October 2025.

Earnings per share

Underlying continuing basic earnings per share was 3.5p (2023: 4.5p), based on an underlying continuing profit before tax of £5,260,000 (2024: £6,662,000). Continuing basic earnings per share was 2.9p (2023: 5.0p).

Underlying continuing diluted earnings per share was 3.5p (2023: 4.5p) following vesting of a grant of options made under the Group's LTIP scheme in 2020 during the previous financial year. Continuing diluted earnings per share was 2.9p (2023: 4.9p).

Balance sheet

Net assets increased by £1.1m to £54.5m (2024: £53.4m). Underlying ROCE decreased in the period to 11.2% at 30 April 2025 (2024: 13.6%) given the reduced profitability in the year and the timing of the acquisition of Albion Drilling which contributed only six months of revenues and profits in the current year.

The Group invested £5.0m in capital over the course of the year, of which £3.6m was funded from cash resources. Investment included the purchase of a rig to support further rigid inclusions growth, a capability which has experienced growing demand in recent years and a rig to replace the aged but highly utilised rigs within the General Piling division to support deep CFA piling. The acquisition of Albion Drilling added £1.5m of fixed assets, net of outstanding lease liabilities, to the Group's balance sheet including 17 rigs.

Overall, the Group's fixed assets have reduced by £5.3m since 30 April 2024. During the year action has been taken to rationalise the Group's asset base in order to improve ROCE. In March 2025 the Group sold its old head office site and adjacent land for a total of £1.6m realising a profit on disposal of £0.4m. Immediately following the year end on 7 May the Group sold its entire heavy haulage fleet and outsourced its transport services function to WS Specialist Logistics Limited for total consideration of £2.9m removing £2.5m of assets from the balance sheet. The transport assets as well as the assets and liabilities of the Canadian operation including £2.3m of fixed assets are classified as held for sale at 30 April 2025.

Working capital (defined as inventories, trade and other receivables, trade and other payables and provisions) increased to £17.0m (2024: £13.6m), of which £0.5m was introduced on the acquisition of Albion Drilling. This increase includes £1.3m of delayed receipts for R&D tax claims, relating to FY2023, which were received after the year end. Aged debtors remain within the normal historical range for the Group with no significant debt collection issues anticipated as at the year end.

During the year a longstanding legal claim with a customer regarding the consequences of failures in piling work was settled at £7.0m. The claim was covered by the Company's professional indemnity insurance and was settled within the insurance cap. The associated liability and insurance recoverable have been released in the current financial year.

Net funds

Net funds have reduced during the year to a net debt position of £4.0m as at 30 April 2025 (2023: net funds of £0.6m). Whilst total cash and cash equivalents increased to £7.2m as at 30 April 2025 (2024: £6.0m) the Group has taken on new debt of £5.9m in the year from a combination of facility drawdown and new hire purchase contracts to support future growth, including £3.4m of consideration paid for acquisitions and capital expenditure of £5.0m.

Hire purchase debt as at 30 April 2025 totals £3.0m (2024: £0.4m) of which £1.4m is disclosed as loans and borrowings and £1.6m is disclosed as lease liabilities. The acquisition of Albion Drilling added £0.6m of lease liabilities to the Group's balance sheet during the year. New hire purchase contracts taken during the year are scheduled to expire in 2028.

The Group's asset backed lending facility, secured against the Group's receivables and certain tangible assets was drawn by £3.0m as at 30 April 2025. Immediately following the sale of the Group's transport fleet in May 2025 £1.5m was repaid and the total facility was reduced from £11m to £8m. There are no financial covenants associated with the facility which is due to expire in September 2026.

The Group's lease liabilities include £5.1m of IFRS 16 property and vehicle lease liabilities (2024: £4.9m). During the year, one of the Group's long lease liabilities (and associated right of use assets) has been restated following a detailed review of the lease terms. The lease liability associated with this agreement has reduced by £1.3m and this has been processed as a prior year adjustment.

Operating cash flows of £7.9m have primarily been used to repay outstanding debt, fund capital expenditure, acquisition consideration payments and dividends. Dividend payments were £1.3m in the year.

Working capital cash flows exclude the impact of working capital introduced on the acquisition of Albion Drilling.

The cashflow impact from the discontinued operation in Canada is an outflow of £2.4m due to revenue growth resulting in working capital investment and reported losses.

The Group paid the final remaining consideration of £2.1m for the acquisition of Rock & Alluvium in November 2024 and paid consideration, net of cash received, of £1.3m for the acquisition of Albion Drilling in October 2024.

Cash flows from investing activities includes £2.4m of disposal proceeds as the Group rationalises its asset base with the sale of excess equipment and property during the year. 

Graeme Campbell

Chief Financial Officer

22 July 2025

Consolidated statement of comprehensive income

For the year ended 30 April 2025

\* The comparatives have been restated due to the classification of a component of the Group as a discontinued operation in the year.

Consolidated statement of financial position

As at 30 April 2025

*Refer to note 8 for details of the prior year restatement

Consolidated statement of cash flows

For the year ended 30 April 2025

*Refer to note 8 for details of the prior year restatement

Consolidated statement of changes in equity

For the year ended 30 April 2025

*Refer to note 8 for details of the prior year restatement

1. Basis of preparation

The unaudited financial information set out below does not constitute the Group's statutory accounts for the periods ended 30 April 2025 or 30 April 2024 but is derived from those unaudited accounts. Statutory accounts for 2024 have been delivered to the Registrar of Companies. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The audited statutory accounts for the year ended 30 April 2025 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

The Group financial statements have been prepared in accordance with UK adopted International Accounting standards in conformity with the requirements of the Companies Act 2006.The Group financial statements have been prepared on the going concern basis and adopting the historical cost convention.

Adoption of new and revised standards

New standards, interpretations and amendments effective from 1 May 2024

During the year, the Group has adopted the following new and revised Standards and Interpretations. Their adoption has not had any significant impact on the accounts or disclosures in these financial statements:

· Amendments to IAS 1 - Classification of Liabilities as Current or Non-current

· Amendment to IFRS 16 Leases - Lease liability in a Sale and Leaseback

· Amendments to IAS 7 and IFRS 7 - Supplier Finance Arrangements

New standards, interpretations and amendments not yet effective

The Group has not early adopted the following new standards, amendments or interpretations that have been issued but are not yet effective:

· IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information

· IFRS S2 Climate-related Disclosures

· IFRS 18 Presentation and Disclosure in Financial Statements

· IFRS 19 Subsidiaries without Public Accountability: Disclosures

· Amendment to IAS 21 - Lack of Exchangeability

· Amendments to the Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS 7

2. Segment information

The Group evaluates segmental performance based on profit or loss from operations calculated in accordance with IFRS but excluding non-recurring items. Inter-segment sales are priced along the same lines as sales to external customers, with an appropriate discount being applied to encourage use of Group resources at a rate acceptable to local tax authorities. Insurances and head office central services costs are allocated to the segments based on levels of turnover. All turnover and operations are based in the UK.

Operating segments - 30 April 2025

Operating segments - 30 April 2024

Restated

The Group had no customers with revenue greater than 10% of Group revenue in the current period (2024: none).

3. Revenue from contracts with customers

Disaggregation of revenue - 30 April 2025

Head office revenue relates to revenue generated from the supply of training services.

Disaggregation of revenue - 30 April 2024

Restated

4. Discontinued operations

At 30 April 2025 Van Elle Canada Inc. was classified as a disposal group held for sale and as a discontinued operation. The results of Van Elle Canada Inc. are presented below:

 5. Income tax expense

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profit/(loss) for the year are as follows:

During the year ended 30 April 2025, corporation tax has been calculated at 25% of estimated assessable profit for the year (2024: 25%).

Deferred tax balances as at 30 April 2025 are measured at the current corporation tax rate of 25%.

 6. Earnings per share

The calculation of basic and diluted earnings per share is based on the following data:

The calculation of basic earnings per share is based on the earnings attributable to ordinary shareholders and on 107,184,400 ordinary shares (2024: 106,703,045), being the weighted average number of ordinary shares in issue during the period.

The dilutive shares of 1,107,000 (2024: 1,209,000) represent share options exercisable under the Group's LTIP scheme that have vested and are yet to be exercised. Share options exercisable under the Group's CSOP scheme are underwater and therefore have not been included in dilutive shares.

7. Analysis of cash and cash equivalents and reconciliation to net debt

Cash flows in respect of lease liabilities include interest paid on leases for continuing operations of £317,000 (2024: £246,000) and discontinued operations of £4,000 (2024: £Nil) totalling £321,000 (2024: £246,000). Cash flows also include continuing operations principal paid of £2,475,000 (2024: £3,537,000) and discontinued operations principal paid of £28,000 (2024: £Nil) totalling £2,503,000 (2024: £3,537,000).

Non-cash flows in respect of lease liabilities include the purchase of £3,672,000 (2024: £1,044,000) of fixed assets on long-term hire, interest expense of £321,000 (2024: £246,000), business combinations of £603,000 (2024: £1,639,000) less liabilities reclassified as held for sale of £408,000 (2024: £Nil).

8. Prior period restatement

During the current financial year, a detailed review of terms of one of the Group's long lease agreements was undertaken resulting in the restatement of the associated IFRS 16 asset and liability. 

A restatement of the FY2024 profit and loss, cashflow statement and balance sheet as at 30 April 2023 and 30 April 2024 has been made.

The total impact on the FY2024 profit and loss is a £93,000 increase in profit after tax, being a reduction in administrative costs of £37,000 and finance expenses of £90,000, with an increased tax charge of £34,000.

The impact on net assets as at 30 April 2024 was an increase of £682,000. The impact on net assets as at 30 April 2023 was an increase of £580,000.

The impact on the FY2024 cash flow statement is a reduction in the net cash generated from operating activities of £106,000, a reduction in principal paid on lease liabilities of £16,000 and a reduction in interest paid on lease liabilities of £90,000. The net impact on cash in FY2024 is nil. A restatement of the cash flow statement is required due to the original cash flow presentation reflecting the accounting entries for the long lease rather than the cash flows.