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Piling and groundworks contractor Van Elle has said it is preparing to write off 拢1.6m of bad debt following Carillion鈥檚 collapse last week.

And it admitted Carillion going bust now meant the firm might not meet previous market expectations as a result.

It said: 鈥淭he 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鈥檚 ability to achieve its previous expectations for the year as a whole.鈥�

The Nottinghamshire-based firm, which flagged up the likely hit last week, said it was owed the 拢1.6m following its work for Carillion on a series of Network Rail jobs.

Van Elle, which worked for Carillion as a lead subcontractor on rail improvement and maintenance jobs, said Carillion鈥檚 collapse had been 鈥渉ugely disappointing鈥� in a statement accompanying its latest interim results.

It added the debt pile had built up after 31 October and admitted it was now facing up to the likelihood that it wouldn鈥檛 be able to recover the money following talks with liquidator PwC.

鈥淲hilst the Group is continuing to engage with the Official Receiver in respect of this outstanding balance, it is now expected that we may recognise an exceptional bad debt charge of approximately 拢1.6m in its full year results,鈥� it said.

It added that it was in discussions with Network Rail about what would be happening to 拢2.5m of income it had planned from its work on the railway for Carillion.

It said: 鈥淲hilst it is possible that some of the anticipated contracts may be delivered in the current year, the status and timing of specific programmes remains uncertain.鈥�

The news took the gloss of an improved set of interim results with Van Elle reporting that pre-tax profit jumped two thirds to 拢5.3m from 拢3.2m in the six months to the end of October. Revenue was up 22% from 拢43m to 拢53m.

The firm said a key driver of its growth during the period had been down to investing more money in specialist piling rigs.

It said the search to replace outgoing chief executive Jon Fenton has narrowed to an initial shortlist of candidates being drawn up. Van Elle said the interview process began last month with a decision due 鈥渁s quickly as possible鈥�.

Van Elle also said that it would have to wear a 拢150,000 charge in its full year results following a failed proposal by its former chairman and founder Michael Ellis to change the make up of its board. The firm said the cost was mainly down to costs associated with holding a general meeting in London on the issue last month.