Carillion subcontractor Van Elle expects to lose £1.6M after writing off money owed to it by the collapsed construction giant.
The geotechnical engineering firm, which carried out regular work for Carillion including rail improvement and maintenance work, revealed last week that it was owed £1.6M by the contractor. It confirmed today that it expects to write the money off as bad debt.
Overall, half year results for Van Elle were positive with group revenue up 22.1% to £52.6M and underlying pre-tax earnings up 18.7% to £8.4M. Van Elle chief executive Jon Fenton confirmed that the bad debt charge will be reflected in the full year results.
The piling and ground engineering specialist identified a further £2.5M of “anticipated contracts” with Carillion in the second half of the year, although the collapse of the company has made the timing of these contracts uncertain.
Fenton said: “The board believes it is prudent at this stage to recognise that the disruption to the expected order book due to the situation at Carillion will impact the group’s ability to achieve its previous expectations for the year as a whole”.
He said that the half year results were encouraging adding that beyond the Carillion related risks the order book was “substantial”. However, the group’s second half expectation included important contracts that were expected in the fourth quarter of this year, but may slip to the first quarter of the next financial year.