RNS Number:7051J
Silverdell PLC
12 December 2007
12 December 2007
Silverdell plc
("Silverdell" or the "Group")
Preliminary Results for the year ended 30 September 2007
Silverdell, a leading UK supplier of asbestos remediation and consultancy
services, today announces its preliminary results for the year to 30 September
2007, being the first full year of trading since its admission to AIM in April
2006.
Financial highlights
Turnover (continuing operations) �38.5m
Operating Profit (continuing operations)
- before goodwill amortisation �4.3m
- after goodwill amortisation �2.9m
Earnings per share (Pence)
- basic 2.4p
- adjusted* 7.9p
* based on profit after tax adjusted for goodwill amortisation, share based
payment charge and finance charges on deferred consideration
Operating highlights
* Acquired Redhill Analysts Limited for a consideration (including
acquisition costs) of �8.7m in December 2006
* Acquired Kitsons Group Limited for a consideration (including
acquisition costs) of �17.8m in August 2007
* Acquired Swift Asbestos (Holdings) Ltd, for a consideration of �1.6m
in October 2007
* Integration of acquisitions on plan with ongoing synergies
continuing to be recognised
* Unique market position in terms of product offering and geographic
scope; the only listed industry consolidator
* Major customer wins in the period include: Shell, Chapelcross,
Thames Water and Marks & Spencer.
* Silverdell (UK) Limited awarded SME Contractor of the Year at the
Contract Journal Awards in October 2007
Danny Spicer, Chief Executive, commented:
"The integration of our four acquisitions continues to go well: we are starting
the see the benefits of the enlarged product offering and nationwide coverage as
well as cost synergies across our various businesses. 2007 has been a
successful year and we look forward with confidence to building on this in the
future".
- Ends -
For further information, please contact:
Chris Sims, Finance Director, Silverdell 020 7004 2744
Chris Howard, Collins Stewart 020 7523 8350
Jonathon Brill, Billy Clegg, Alex Beagley, Financial Dynamics 020 7831 3113
Chairman's statement
It is a pleasure to report our first full year results to 30 September 2007,
which were in line with our forecasts.
In a year of highly satisfactory progress, the group recorded a profit before
tax of �2.2 m on turnover of �38.5m. Earnings before interest, tax,
depreciation, amortisation and share based payment charge were �5.1m.
Basic earnings per ordinary share were 2.4 pence and adjusted basic earnings per
ordinary share (based on profit after tax adjusted for goodwill amortisation,
share based payments and finance charges on deferred consideration) were 7.9
pence per ordinary share.
The directors do not recommend the payment of a dividend.
Following the acquisition of Redhill Analysts Limited, Kitsons Group Limited and
Swift (Asbestos) Holdings Limited, the Company has achieved its initial
strategic goal: the nationwide provision of the full range of asbestos services
under three leading brands.
We are indebted to each and every group employee, all of whom have worked
incredibly hard during our first full year as a listed company. The work ethic
instilled by the senior management has been a major factor in our success, aided
by our ability to grant share options to key staff as an additional incentive.
We have also strengthened the board during the year and welcomed Chris Sims as
Group Finance Director. Chris was previously Finance Director of Brandon Hire
PLC and brings valuable experience in group reporting and integration, investor
relations, and mergers and acquisitions. We are very appreciative of the
efforts of Simon Gunn who had been handling the group finance function until
Chris's appointment; Simon continues as Finance Director of Silverdell (UK)
Limited.
We also appreciate the support shown by our shareholders who have seen our share
price double since the original acquisition , Silverdell (UK) Limited, in July
2006.
Outlook
Trading in the first two months of the current financial year has been
satisfactory and we are confident of our prospects and see plenty of potential
ahead for the further development of our company.
David Williams, Chairman
11 December 2007
Chief Executive's Review
This is the first full year's trading of Silverdell Plc after its admission to
AIM as Bow Lane Capital Plc in April 2006 and the acquisition of Silverdell (UK)
Limited in July 2006.
It has been a year of substantial development in line with our stated strategy
of providing a nationwide "one-stop-shop" for asbestos services.
At 30 September 2006, the group comprised Silverdell (UK) Limited ("Silverdell
(UK)"), one of the largest and best known asbestos remediation businesses, with
a relatively small consulting division. Based in the South East, but with
offices in the Midlands, Yorkshire and South Wales, Silverdell (UK) provided the
platform for future expansion.
Silverdell (UK) has had another record year in its first year as part of the
quoted group. Turnover increased by 42% to �30.5m and operating profit by 369%
to �4.6m, before a share of central costs. This was an excellent performance,
well ahead of expectations and reflects the professionalism and dynamism of the
people in the business. Silverdell (UK) won the Construction News Award for
Asbestos Contractor of the Year for the second year running in May 2007 and the
Contract Journal Award for SME Contractor of the Year in October 2007,
demonstrating the high regard in which the company is held amongst its customers
and peers.
Silverdell (UK) continues to develop long-term relationships with its customer
base. It has built an enviable record of professionalism and service that is
second to none in the industry and continues to win business from new customers
such as Marks & Spencer and Shell.
Silverdell (UK) devotes significant time and resource to health and safety and
training. The company has an exemplary record in respect of Health & Safety
Executive ("HSE") inspections and Silverdell (UK)'s Health & Safety Director has
recently been appointed to a group role in order to extend best practice to all
group companies. During the year, we introduced an industry first - a fully
equipped mobile training suite that can be taken to customers' sites to provide
training with minimum disruption.
Redhill Analysts Limited ("Redhill Analysts") was acquired by Silverdell Plc in
December 2006. Redhill Analysts is an asbestos and environmental consultancy
business whose turnover principally arises from asbestos surveys, on-site air
monitoring of remediation activities and the provision of asbestos management
plans. In the nine month period since its acquisition Redhill Analysts turnover
was �4.5m and its operating profit was �0.7m before a share of central costs.
This was slightly behind expectations, caused by the market being somewhat
slower in the summer months and the requirement to add resource in anticipation
of growth in 2007/08, which is underpinned by the very recent client win of
Thames Water.
Redhill Analysts is a very well known and respected name in asbestos consultancy
and has been a prominent member of the Asbestos Removal Contractors Association
for a number of years. It has UKAS and ISO accreditation.
Since the acquisition, there has been an increasing trend towards joint
tendering and sharing of information between the group companies. Redhill
Analysts is benefiting from such opportunities and some large contracts started
in the autumn.
On 31 July 2007, Silverdell Plc acquired Kitsons Group Limited, the ultimate
owner of Kitsons Environmental Europe Limited ("Kitsons"). Kitsons specialises
in asbestos remediation in the nuclear, industrial and petrochemical sectors;
with a head office in the North West and branch offices in the Midlands, the
North East, and Scotland, it complements the group offering well. The group now
has branch representation throughout the UK.
Kitsons has some very long standing customer relationships, built on reliable
and high quality service delivery, as well as significant visibility of income
by virtue of several long-term preferred supplier relationships. The company has
been successful in recent asbestos remediation related tenders for nuclear power
station decommissioning and has recently commenced work at Chapelcross; it is
well positioned to win further tenders due within the next twelve months.
Additionally, Kitsons carries out corrosion remediation for large blue-chip
clients and has a scaffolding business, principally for in-house purposes.
Trading in the two months that Kitsons has been in the group has been very
satisfactory and in line with expectations, with turnover of �3.7m and operating
profit of �0.3m before a share of central costs.
Kitsons has full ISO accreditation (ISO 9001, ISO 14001 and ISO 18001) and an
excellent track record with the HSE.
On 1 October 2007, Silverdell (UK) acquired Swift Asbestos (Holdings) Limited ("
Swift"), in line with our strategy of acquiring earnings enhancing businesses
that complement our existing offering. Based in Southampton, where Silverdell
(UK) had no market presence, Swift specialises in asbestos remediation in the
hotel sector. Swift has been rebranded "Silverdell" and has been successfully
integrated into Silverdell (UK).
There are substantial opportunities to leverage the benefits of the new group
structure over the forthcoming months. We have already submitted tenders for
work on a group basis and this approach has been well received in the market
place. Work is underway on cost synergies with some early gains already in the
areas of equipment hire and insurance.
The asbestos services market continues to look favourable and the group is
uniquely placed to take advantage of this in terms of both organic growth and
further acquisitions, if and when the right opportunities arise.
Danny Spicer, Chief Executive
11 December 2007
Consolidated Profit and Loss Account for the year ended 30 September 2007
Year ended 30 September 27 weeks
ended
2007
30 September
(Un-audited) 2006
Existing Acquisitions Total Total
Operations
NOTE �000 �000 �000 �000
Turnover - continuing operations 30,198 8,300 38,498 6,046
Cost of Sales (19,952) (4,856) (24,808) (4,318)
Gross profit 10,246 3,444 13,690 1,728
Administrative expenses (7,600) (3,150) (10,750) (1,553)
Operating profit before goodwill 3,632 699 4,331 366
amortisation
Goodwill amortisation (986) (405) (1,391) (191)
Operating profit - continuing operations 2,646 294 2,940 175
Net interest and finance charges payable 1 (774) (82)
Profit on ordinary activities before 2,166 93
taxation
Tax on profit on ordinary activities 2 (1,294) (133)
Profit/(loss) for the period 872 (40)
PENCE PENCE
Earnings per share 3
Basic earnings/(loss) per share 2.39 (0.27)
Diluted earnings/(loss) per share 2.25 (0.27)
There is no difference between the profit on ordinary activities before taxation
and the retained profit/(loss) for the financial periods stated above, and their
historical equivalents.
Consolidated statement of total recognised gains and losses for the year ended
30 September 2007
There are no recognised gains or losses in the period other than the profit/
(loss) for the period.
Consolidated balance sheet as at 30 September 2007
Group
As at As at
NOTE 30 September 30 September
2007 2006
�000 �000
(Un-audited)
Fixed Assets
Goodwill 40,523 19,539
Tangible fixed assets 2,480 1,014
Total non-current assets 43,003 20,553
Current Assets
Stocks and work in progress 2,516 1,445
Debtors 15,897 7,336
Cash at bank and in hand 1,418 3,300
Total current assets 19,831 12,081
Creditors: amounts falling due within one year (17,794) (5,092)
Net current assets 2,037 6,989
Total assets less current liabilities 45,040 27,542
Creditors: amounts falling due after more than one year (7,379) (336)
Provisions for liabilities (3,680) (6,268)
Net assets 33,981 20,938
Capital and reserves
Called up share capital 4,068 3,220
Share premium account 13,649 13,649
Equity reserve 199 28
Other reserves 15,233 4,081
Profit and loss account 832 (40)
Equity shareholders' funds 5 33,981 20,938
Consolidated cash flow statement for the year ended 30 September 2007
NOTE Year ended 30 27 weeks ended 30
September 2007 September 2006
�000 �000 �000 �000
(Un-audited)
Operating profit 2,940 175
Amortisation of goodwill 1,391 191
Depreciation of tangible fixed assets 556 30
Share-based payment charge 171 28
(Profit)/loss on sale of fixed assets (7) 3
Decrease/(increase) in stocks and work in 352 (880)
progress
Increase in debtors (3,620) (1,225)
Increase in creditors 1,260 568
Net cash inflow/(outflow) from operating 3,043 (1,110)
activities
Returns on investments and servicing of finance
Interest received 72 27
Interest paid on overdrafts and bank borrowings (324) (18)
Interest paid on finance leases & hire purchase (79) (7)
agreements
(331) 2
Taxation
UK corporation tax paid (734) -
Capital expenditure and financial investment
Purchase of tangible fixed assets (438) (42)
Sale of tangible fixed assets 98 3
(340) (39)
Acquisitions
Purchases of subsidiary undertakings (12,633) (7,349)
Net cash acquired with subsidiary undertakings 1,356 172
(11,277) (7,177)
Cash outflow before management of liquid (9,639) (8,324)
resources and financing
Management of liquid resources and financing
Issue of ordinary share capital - 17,013
New bank loans raised 9,000 -
Repayment of loan notes - (6,235)
Capital element of finance lease repayment (357) (40)
8,643 10,738
(Decrease)/increase in cash in the period 4 (996) 2,414
Reconciliation of net cash flow to movement in
net debt
(Decrease)/increase in cash in the period (996) 2,414
Increase in term loans (9,000) -
Increase in finance leases (536) (476)
Movement in net (debt)/cash (10,532) 1,938
Opening net cash 1,938 -
Closing net (debt)/cash 4 (8,594) 1,938
Notes to the preliminary announcement
Accounting policies
The preliminary announcement has been prepared using policies which have been
applied consistently throughout the year and the preceding year.
1. Net interest and finance charges payable
27 weeks ended
2007 30 September 2006
�000 �000
Interest and finance charges payable:
Bank loans and overdraft 324 18
Interest on finance leases and hire purchase agreements 79 7
Finance charges on deferred consideration 443 84
846 109
Interest receivable:
Interest receivable on bank deposits (72) (27)
774 82
2. Tax on profit on ordinary activities
Analysis of charge in period:
27 weeks ended 30
2007 September 2006
�000 �000 �000 �000
Current Tax
UK Corporation tax on profits for the year 1,357 120
Deferred Tax
Origination and reversal of timing differences (63) 13
Tax on profit on ordinary activities 1,294 133
Reconciliation of current tax charge
Profit on ordinary activities before tax 2,166 93
Tax on profit on ordinary activities at standard rate 650 28
of tax (30%)
Effects of:
- Share based payments charge 51 8
- Depreciation in excess of capital allowances 7 (20)
- Goodwill amortisation 417 57
- Finance charges on deferred consideration 133 25
- Other 91 22
699 92
Adjustment in respect of prior year 8 -
Tax on profit on ordinary activities 1,357 120
The tax charge in future periods may be affected by changes in the UK tax
legislation.
The Group earns its profits primarily in the UK. Therefore the tax rate used
for tax on profit on ordinary activities is the standard rate for UK corporation
tax, currently 30 per cent.
The Group's planned level of capital investment is expected to remain at similar
levels of investment. Therefore, it expects to be able to claim capital
allowances in excess of depreciation in future years, at a similar level to the
current year
3. Earnings per share
Basic earnings/(loss) per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average number of ordinary
shares in existence during the period.
Diluted earnings/(loss) per share is calculated as basic earnings per share
adjusted to include dilutive potential ordinary shares where fair value price
exceeds option price, relating firstly to shares allotted under employee share
schemes and secondly to a warrant to Marwyn Neptune Fund LP.
Adjusted earnings per share is based on the earnings attributable to ordinary
shareholders, the share based payment charge, amortisation of intangible assets,
and finance charges on deferred consideration.
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below:
Earnings
2007 27 weeks ended 30 September
2006
earnings per share earnings/(loss) per
share
basic diluted basic diluted
�000 pence pence �000 pence pence
Earnings/(loss) attributable to ordinary 872 2.4 2.2 (48) (0.2) (0.2)
shareholders
Share based payment charge 171 0.5 0.4 8 - -
Goodwill amortisation 1,391 3.8 3.6 57 0.3 0.3
Finance charges on deferred consideration 443 1.2 1.2 84 0.5 0.5
Profit for adjusted earnings per share 2,877 7.9 7.4 101 0.6 0.6
The adjusted numbers have been reported in order that the impact of the above
charges against reported profit can be fully appreciated.
Number of shares
27 weeks ended
2007 30 September 2006
Weighted average number of ordinary shares used in
calculation of basic earnings per share 36,479,265 17,805,000
Effect of dilutive potential ordinary shares:
Share options and warrant 2,361,897 -
Weighted average number of ordinary shares used in
calculation of diluted earnings per share 38,841,162 17,805,000
4. Analysis of net debt
Leasing &
Hire Purchase
Cash in hand Overdraft Sub-total Bank loans Agreements Total
�000 �000 �000 �000 �000 �000
At 1 October 2006 3,300 (886) 2,414 - (476) 1,938
Cash flow (1,882) 886 (996) - 357 (639)
Acquisition - - - - (310) (310)
New agreements - - - (9,000) (583) (9,583)
At 30 September 2007 1,418 - 1,418 (9,000) (1,012) (8,594)
5. Reconciliation of movement in shareholders' funds
2007 2006
�000 �000
Profit/(loss) for the financial period 872 (40)
Share based payment charge credited to equity reserve 171 28
Proceeds on issue of shares 12,000 21,637
Costs of issue of shares - (687)
13,043 20,938
Opening equity shareholders' funds 20,938 -
Closing equity shareholders' funds 33,981 20,938
The financial information set out above (which has been approved by the board on
11 December 2007) does not constitute the Company's statutory accounts for the
year ended 30 September 2007 for the purpose of Section 240 of the Companies Act
1985, which comply with UK GAAP, but is extracted from those accounts. The
Company's statutory accounts for the year ended 30 September 2006 has been filed
with the Registrar of Companies. The independent auditors report on those
accounts was unqualified and did not contain any statement under Section 237 (2)
or (3) of the Companies Act 1985. The audit of the statutory accounts for the
year ended 30 September 2007 is not yet complete. These accounts will be
finalised on the basis of financial information presented by the directors in
this preliminary announcement and will be delivered to the Registrar of
Companies following the Annual General Meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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