20. Van Elle Holdings Plc
Groundwork Experts
Specialising in geotechnical solutions, Van Elle Holdings Plc provides essential ground engineering services for construction projects across the UK, headquartered in Kirkby-in-Ashfield, Nottinghamshire. Operating in the construction and infrastructure industry, specifically in geotechnical engineering. The company supports everything from housing developments to major rail and road projects, ensuring stable foundations in challenging ground conditions.
Van Elle generates revenue by offering piling, ground improvement, and geotechnical services to clients in sectors like residential, infrastructure, commercial, and industrial. Its core service is piling, where it installs deep foundations, such as steel or concrete piles, to support buildings on unstable soil, charging per project based on the complexity and scale. For example, it might drive piles for a new housing estate or a high-rise tower, with costs varying widely depending on ground conditions and project size. The company also provides ground improvement techniques, like vibro stone columns, to strengthen soil, and specialist services such as rail electrification foundation work for projects like HS2. Additionally, Van Elle designs and manufactures precast concrete products, such as modular foundations, through its subsidiary Smartfloor, which it sells to housebuilders for quick, cost-effective installation. In the year ending April 2024, Van Elle reported revenues of £139.5 million, down 6% from £148.7 million the previous year, reflecting a tough market for UK construction but with improved gross margins at 31.5% due to a focus on higher-value contracts.
Strategically, Van Elle has been diversifying its offerings, expanding into low-carbon solutions like ground source heat pump installations to align with sustainability trends. It employs around 600 people and operates a fleet of over 120 rigs, making it one of the UK’s largest piling contractors. The company has secured spots on major frameworks, such as Network Rail’s CP7 programme, ensuring a pipeline of infrastructure work. However, it faces challenges such as the residential sector, which made up 37% of revenue in 2024, has been hit by high interest rates and a sluggish housing market, while inflation has driven up material and labour costs. Despite this, Van Elle’s focus on infrastructure and rail, alongside a record order book of £39 million in April 2024, provides some stability.
Van Elle’s expertise in complex ground conditions and its push into green technologies position it well, but economic pressures and a competitive market require careful navigation to maintain growth. Ultimately, these sorts of business are rarely stellar investments. Their services, whilst specialised are fairly low economic-add and contracts are usually done a on a lowest priced bidder basis. Additionally, they are exposed to an unquantifiable set of risks associated with cost overruns and mishaps.
Bought at the right time when the shares are very cheap but the backdrop is improving, this could be a fair investment for a while, but it doesn’t have the characteristics Wonder Stocks is looking for.
