Ground engineering firm Van Elle is intensifying its focus on London and the South East to expand its market share.
- The company’s acquisition of Rock & Alluvium is seen as a strategic move to enhance growth opportunities in the region.
- A significant five-year trading agreement with Galliford Try is expected to bolster Van Elle’s annual revenue by over £10m from next year.
- Van Elle’s involvement in Network Rail’s Southern region framework signifies a deeper engagement in regional infrastructure projects.
- Despite financial challenges, Van Elle maintains a strong balance sheet with prospects of steady revenue growth.
Van Elle, a prominent ground engineering firm, is directing its efforts toward expanding its operations in London and the South East. The company’s recent stock market update highlighted this strategic shift, underscoring the acquisition of Rock & Alluvium as a pivotal move towards achieving broader growth prospects in this area.
Emphasising the importance of this acquisition, Chief Executive Mike Cutler stated, “The integration of Rock & Alluvium has progressed in line with expectations and the business traded profitably in the final quarter of the year.” This move is not only expected to consolidate Van Elle’s market presence but also to unlock new business opportunities, strengthening its regional foothold.
The acquisition is complemented by a significant five-year trading agreement with construction giant Galliford Try, anticipated to yield more than £10m annually beginning next year. Such a collaboration is pivotal for Van Elle as it navigates through the competitive landscape of ground engineering, particularly in a region bustling with infrastructure projects and development.
Further expanding its footprint, Van Elle has secured a position as a delivery partner on Network Rail’s Southern region framework. This framework, valued at £1.4bn over a decade, involves projects across Kent, Sussex, and Wessex, focusing on earthworks and drainage, among other tasks. Such involvement not only highlights Van Elle’s growing influence in infrastructure but also promises improved workload visibility.
Despite encountering financial hurdles with a revenue drop to £139.5m from £148.7m in the previous year, Van Elle still reports a rise in pre-tax profits to £5.6m. Amid these financial dynamics, the company assures a robust financial position, maintained by an undrawn bank facility amounting to £11m.
In his concluding remarks, Chief Executive Mike Cutler affirmed, “a strong balance sheet [was] maintained,” reflecting confidence in achieving a compound annual revenue growth rate between 5-10% in upcoming years. Van Elle remains optimistic about leveraging its strong financial foundation to fuel further growth and capitalise on upcoming opportunities in the South East.
Van Elle’s strategic initiatives underscore its commitment to expanding its footprint in the South East market, with promising prospects for sustained growth.
