Van Elle profit report warns of shortfall, blames BSA

Van Elle has warned that profits for the current financial year will be materially below prior expectations, citing contract delays and restrained client spending. The ground engineering and piling specialist said projects have been pushed back by approval bottlenecks linked to the Building Safety Act (BSA), with knock-on effects across multiple sectors.

In a trading update, the company reported that revenue in the first four months of the financial year ending 30 April 2026 has remained subdued. Several schemes expected to start in the final quarter of the previous year were deferred and have only recently mobilised, while others are still awaiting approvals. Van Elle noted that an anticipated improvement in its core markets has yet to materialise, primarily due to spending caution and BSA-related gateway delays on high-rise residential work.

Trading update highlights

• Revenue has been weaker than planned in the early part of FY2026, reflecting slower project starts.
• Approval requirements under the Building Safety Act have hindered the timing of high-rise residential projects.
• Spending constraints among clients are contributing to deferrals and longer pre-construction periods.
• Projects slipped from the prior year into the current period, creating gaps in workflow and revenue conversion.

The company reiterated that the challenging trading conditions seen through FY2025 have continued into the new year. While the pipeline remains active, the pace of converting opportunities into live sites has been affected by regulatory approvals and client decision-making timelines.

Wider market pressures

Van Elle’s experience aligns with broader industry signals that the BSA is elongating pre-construction phases and prompting repeat tendering as programmes are reshaped. A slowdown in overall construction output in May and a dip in the sector’s purchasing managers’ index to 44.3—the weakest reading since May 2020—underscore the fragility of demand and scheduling certainty.

Framework intelligence indicates that, although headline market competitiveness and underlying cost stability have persisted, multiple headwinds are shaping a more cautious supply chain. These include regulatory delays, labour availability, regional resource imbalances, funding uncertainty, and rising insolvencies. The combined effect is a more selective approach to bidding and subcontractor engagement, extending timelines and complicating resource planning.

Supply chain and materials trends

Material availability pressures have eased only modestly in recent months, with an average extension of lead times of around 0.3 weeks. Specific trades have seen sharper increases: mechanical and electrical by approximately 0.7 weeks, tower cranes by about 0.67 weeks, and carpentry and joinery by around 0.6 weeks. Large-scale infrastructure schemes—such as those concentrated in the South West—continue to absorb regional capacity, affecting the number and speed of bid returns for other projects.

Envelope packages remain the most challenging from a scheduling standpoint. Roofing, cladding, and windows are still experiencing some of the longest lead times, and delays to these critical path elements can ripple through project sequencing. As a result, clients and contractors are leaning more heavily on early procurement, closer tracking of supplier lead times, and securing key components through framework agreements to protect delivery programmes.

Outlook

Looking ahead, Van Elle’s near-term focus is on converting the deferred workbank into active sites and navigating the BSA gateways more efficiently. The company expects trading to improve as approvals are granted and previously delayed projects progress. However, it cautions that the timing of recoveries remains uncertain while spending is constrained and regulatory processes remain stringent.

For the sector more broadly, proactive engagement with supply chains, robust pre-construction planning, and early material strategies are likely to remain essential to keep programmes on track. Until approval pathways and demand conditions normalise, contractors may continue to encounter uneven workloads and pressure on profit conversion.