TIDMSID
RNS Number : 8800H
Silverdell PLC
06 June 2011
Silverdell Group PLC
("Silverdell" or the "Group")
Interim results for the half year ended 31 March 2011
Silverdell, the industrial support services group, reports
interim results for the half year ended 31 March 2011.
Financial highlights
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
31 March 31 March 30 September
2011 2010 2010
GBPm GBPm GBPm
Continuing operations:
Turnover 27.9 29.6 56.7
Operating profit 1.3 0.9 2.5
Adjusted pre-tax profit * 1.2 1.2 2.6
Adjusted operating margin
* 5.1% 5.2% 5.7%
Pence Pence Pence
Adjusted earnings per
share *
Adjusted basic 0.6 0.4 0.9
Basic 0.5 0.1 0.5
Diluted 0.5 0.1 0.5
*Before intangible assets amortisation and share-based
payments
Financial Highlights
-- Strong second quarter revenues of GBP15.5m
-- Gross margin of 27.6% (2010: 25.0%)
-- Gross profit up 4% at GBP7.7m (2010: GBP7.4m)
-- Operating profit up 42% at GBP1.3m (2010:GBP0.9m)
-- Profit before tax up 87% at GBP1.1m (2010:GBP0.6m)
-- Net debt GBP1.9m lower at GBP3.9m (2010: GBP5.8m)
Operational Highlights
-- Strong order book GBP67m (2010: GBP60m)
-- Three year national framework contract with major high street
retailer likely to be worth in excess of GBP1m per year won in
Q3
-- Shortlisted for several multi-million pound contracts in the
nuclear, petrochemical, utility and retail sectors
-- First contract won in Canada with scope for further Canadian
business wins
-- Extension of a national framework contract with a leading
broadcaster for a further three years, worth GBP2.5m
-- GBP600k of asbestos remediation contracts for Local Education
Authorities
-- GBP2.1m of refurbishment contracts with major retailers
-- Strong performance from Consulting division with gross
revenues for the first half up 32% compared to the same period last
year
-- Acquisition of asbestos consultancy AH Allen after period
end, for an initial consideration of GBP550k in cash, with further
deferred consideration of up to GBP350k
Commenting on the results, Chairman Stuart Doughty, said:
"As we previously advised, the first quarter performance was
below expectations, as a result of bad weather and some customers
deferring spending plans. We saw a recovery in the second quarter
and this has carried through into the second half of our financial
year. Overall, therefore, this is a pleasing set of interim results
which demonstrate the strength and the increasing relevance of
Silverdell's business model to our target markets.
We have strengthened our balance sheet, increased gross margins
and free cash flow generation whilst at the same time keeping a
tight control of costs and working capital. We are tendering, and
expect to be shortlisted for significantly larger, multi-year
contracts with multinational companies in the nuclear,
petrochemical, utility and retail sectors.
Silverdell is now perfectly positioned for its next phase of
growth and, reflecting our confidence in the Group's prospects, the
Board is giving consideration to the possibility of the Group
initiating a progressive dividend policy in due course."
ENQUIRIES:
Silverdell Group PLC Tel: 020 7004 2741
Sean Nutley, Chief Executive
Ian Johnson, Finance Director
College Hill (Public Relations) Tel: 020 7457 2020
Helen Tarbet
Mark Garraway
Chairman's Statement
I am pleased to report encouraging first half results for
Silverdell Plc. As we announced earlier in the year, although the
first quarter of the year was affected by some of our customers,
particularly in the public sector, deferring spending plans and
also by adverse weather conditions, the second quarter saw a
significant improvement in trading. Second quarter revenues were
over GBP15m which gives us confidence in our outlook for the
future.
Moreover, we are currently tendering, and expect to be
shortlisted for, a number of long term, multi- million pound
frameworks with multi-national companies in the nuclear,
petrochemical, utility and retail sectors. We believe this marks a
new phase of capital and revenue growth for Silverdell, and as a
mark of this confidence, the Board is giving consideration to the
possibility of initiating a progressive dividend policy, at the
time of the full year results announcement in December 2011.
Group revenues for the six months ended 31 March 2011 were
GBP27.9m (2010: 29.6m), slightly down 5.6% on the same period last
year but GBP0.8m higher than the second half of last year. We have
improved gross margins to 27.6% (2010: 25.0%) and profit before tax
was up 87% at GBP1.1m (2010: GBP0.6m).
The Group has had another good period of cash generation, with
net debt down GBP0.3m compared to 30 September 2010 and GBP1.9m
lower than the same time last year.
The Group's performance also benefitted from decisive management
actions taken to control costs, reduce working capital and maximise
free cash flow.
During the period the Group has continued to advance its
strategy of moving the business from being a leading asbestos
removal contractor and remediation business to providing high
quality specialist industrial support services and regeneration,
delivering innovative solutions which meet our clients'
requirements safely and cost effectively. An important aspect of
this is our focus on tendering for ever larger, framework
contracts, and it is gratifying to see the progress we are making,
with Silverdell being placed on shortlists for several of these
contracts with multinational companies, after the period end.
The outlook for the second half is encouraging. Q2 revenues were
up 24% on Q1 and the run rate turnover achieved at the period end
has continued strongly into Q3. Our order book is growing, standing
at GBP67m at 31 March 2011 (2010: GBP60m), with new orders
continuing to come in strongly after the period end. The Group
enjoys a strong balance sheet and gearing is now at 20% (2010:
32%).
We are confident that we are well positioned to benefit from
compelling regulatory and legislative drivers in our marketplace,
and that decisive management actions have created a robust business
which is perfectly placed to grow as we win larger and longer term
contracts. Our confidence is due in no small part to the talent and
commitment of our staff, and the support of our customers. I would
like to thank them all for their continuing support.
Stuart Doughty
Chairman
Chief Executive's Statement
Overview
I am pleased to report interim results which are in line with
Board expectations in spite of a challenging trading environment
and a particularly difficult first quarter. Following the deferral
of some public and private sector maintenance expenditure and
adverse weather conditions in the first quarter, revenues recovered
strongly in the second quarter, recording our highest quarterly
revenues for a year. This improved performance has continued beyond
the period end, with exciting opportunities emerging for large
contracts in the nuclear, petrochemical, utility and retail
sectors, which demonstrate Silverdell's rapidly growing reputation
as a key player in the industrial and environmental support
services sector.
Redhills, the Group's primary consulting business, performed
particularly well during the period, reporting gross revenues for
the first half up 32% compared to last year. On 1 April 2011
Silverdell completed the acquisition of AH Allen Limited, a
well-established asbestos consultancy based in Hull. AH Allen
Limited will be integrated with Redhills, providing both additional
capacity and access to a wider client base, particularly in the
North of England and Scotland. AH Allen has an excellent reputation
and customer lists and we are already seeing synergies, cost
savings and new business opportunities as a result of this
acquisition. At 31 March 2011, Consulting made up 13.6% of group
gross revenues (2010: 9.7%).
Silverdell also successfully achieved a number of objectives set
by the Board to deliver growth in line with the Group's medium-term
strategy. During the first half we launched SAFE Training, an
asbestos awareness training provider, and are already seeing
encouraging demand for our services. Our remediation business won
its first contract in Canada worth around C$500k, and we see
considerable scope to win further contracts here, as Canadian
legislation on asbestos removal has recently been tightened
considerably.
The remediation businesses were strong at the period end and we
are confident of continuing success in the future.
Our Marketplace and Business Drivers
We operate in a market which demands high standards of legal and
regulatory compliance as well as reputational protection and risk
management. Recent rulings by the Supreme Court in the UK and the
EU have reinforced this trend, with our customers coming under ever
more onerous legal obligations to make asbestos management and
related property maintenance spending a priority. We continue to
win new, high-quality business with blue-chip and public sector
clients, with a continued movement away from fixed price contracts
towards long-term maintenance relationships. Silverdell has a
strong competitive advantage compared to smaller companies in the
industry. We provide a full service offering, from on-site
consulting to removal and remediation. Clients are increasingly
seeking these "one stop shop" solutions as a way of controlling
costs. We operate in a market which is fragmented, with high
barriers to entry due to the strict compliance and health and
safety requirements of companies which operate within it.
The Group has a good balance of business across a wide variety
of sectors and this diversity has stood us in good stead during
challenging economic times. Our client mix is approximately 65%
private sector to 35% public sector and we continue to rebalance
the business towards international blue chip clients and public
sector clients whose spending plans have already been committed by
Government or are driven by regulatory obligations. We are also
investing in our sales forces, equipping them to win large, complex
framework contracts and will also be implementing an Oracle-based
Customer Relationship Management ("CRM") system over the next 6
months to provide additional sales support.
Strategic Review
During the period we continued to make significant progress
towards achieving our medium term targets, which were set by the
Board in June 2010. These targets were as follows:
1. To grow our order book ahead of organic revenue growth;
2. To drive revenue growth year on year ahead of market
growth;
3. To grow the EBITDA margin to 10%;
4. To maintain working capital at not more than one month's
revenue; and
5. To grow the Consulting business to 15% of Group revenues.
We remain on track to meet all of these targets, recording order
book and top line growth through the first half of 2011. Gross
margins continue to improve and working capital is tightly
controlled. We have also completed a Consulting acquisition which
will augment the organic growth already achieved by this
segment.
Business Review
Remediation Consulting
2011 2010 2011 2010
% % % %
Public Sector
Local Government 11 10 15 23
Defence 22 14 9 11
Health & Education 8 11 17 22
Sub-total - public
sector 41 35 41 56
Private Sector
Power, Utilities,
Industrial 29 29 10 4
Construction 6 17 3 4
Retail, Rail, Commercial 24 19 46 36
Total 100 100 100 100
Public Sector: Local Government works
For Silverdell, the public sector comprises 41% (2010: 35%) of
our Remediation revenues and 41% (2010: 56%) of our Consulting
revenues. The nature of this spend is safety critical maintenance
and while it can be deferred for a short while, the public estate
requires more than GBP25 billion in maintenance spending each year.
Our relationships with local councils and Housing Authorities
continue to be strong. Local Government revenues were 11% of our
Remediation revenues (2010: 10%) as we continue to support local
councils in remediating their infrastructure and property stock,
with works ranging from council houses to significant
infrastructure items such as bridges and tunnels.
In our Consulting businesses, Local Government and Housing
Authority revenues fell to 15% of total revenues (2010: 23%),
although in absolute terms the decline is much less marked. We
continue to win contracts with local and national government
authorities including some national heritage sites as they seek to
manage their asbestos and hazardous materials risk. Looking
forwards, AH Allen, our Consulting acquisition completed in April
2011, brings a number of local council contracts from the North
East and London and the South East.
Public Sector: Defence
Silverdell has been appointed to carry out additional capital
works in a secure nuclear facility, a specific area where we have
built up very strong credentials working within the constraints of
high security and rigid adherence to protocols and processes.
Remediation revenues increased as a share of total revenues to 22%
(2010: 14%). Our nuclear expertise has assisted in adding value to
our reputation and credentials as we continue to raise our profile
in this sector.
Consulting services to the defence industry were 9% of the H1
2010 Consulting revenues (2010: 11%).
Public Sector: Health& Education
The Health & Education proportion of Remediation revenues
was 8% (2010: 11%). This was partly due to the scaling back of the
Building Schools for Tomorrow programme as well as the deferral of
some summer shut down maintenance with items such as boiler repairs
deferred as a result of the uncertainty around the Comprehensive
Spending Review. We have won a three year framework with a
prestigious Russell Group university to maintain the campus fabric
as well as a GBP250k refurbishment contract for a large hospital in
South Wales.
Health & Education continues to be a significant sector for
our Consulting division, representing 17% of total revenues (2010:
22%).
Private Sector: Power Generation, Utilities and Industrial
Power Generation
The Power Generation, Utilities and Industrial sector share of
Remediation revenues was 29% (2010: 29%). We remained focussed on
the decommissioning of nuclear plants with a significant asbestos
legacy such as Chapelcross as well as the thermal insulation of
newbuild power stations like Pembroke. Our performance on site at
Chapelcross and the experience gained in this highly regulated
environment should see us well positioned as we bid for the next
round of decommissioning works.
For Consulting, Power Generation revenues rose to 10% of the
total (2010: 4%) as we develop our offering to work in tandem with
our Remediation clients.
Utilities
Silverdell has been negotiating increased work packages with a
number of utility companies, saving costs and improving performance
and as part of ongoing maintenance frameworks. We are also bidding
for significant nationwide framework contracts for a large utility
network provider. Looking forwards, the acquisition of AH Allen
will bring additional Consulting penetration into utilities in the
North East of England.
Industrial
During the period, works have been carried out at an animal feed
plant in the North West of England worth nearly GBP0.5m and a
further GBP250k of works with a nuclear waste management company
and one of the world's largest manufacturers of healthcare
equipment. AH Allen also brings a strong industrial customer list
from its operations based in the North East.
Private Sector: Construction
The Construction market share of remediation revenues declined
to 6% (2010: 17%), largely because the first half of last year
included a significant one-off construction project for Shell for
which there was no equivalent in the first half of this year.
Overall the Construction sector continues to remain weak in the UK
which justifies our strategic decision to focus on winning more
framework style contracts in more resilient sectors to provide more
predictable and more resilient revenues and margins. We have
recently won contracts with Galliford Try and Laing O'Rourke worth
over GBP0.6m and the Group remains well placed to benefit from any
upturn in the sector. For Consulting, the share of total revenue
from Construction fell slightly to 3% (2010: 4%).
Private Sector: Retail, Rail and Commercial
The Retail, Rail and Commercial sector performed well as we won
new contracts with retailers and banks as well as Crossrail. During
the first six months of this year we secured a long-term contract
with Crawfords, the UK's biggest loss adjusting company. Overall,
Retail, Rail and Commercial revenues increased as a share of
overall Remediation revenues to 24% (2010: 19%) but represented 46%
of Consulting revenues (2010: 36%).
Retail
We have maintained a strong position in the market, securing
projects with a number of leading high street brands. The early
months of 2011 saw a number of retailers announce major
refurbishment plans which have already resulted in more than GBP1m
of orders so far. Just after the period end we won a three year
nationwide framework contract with a national retailer expected to
be worth more than GBP1m per year. We have also improved our
position with regard to the banking sector such that we are the
leading provider of Remediation and Consulting services to this key
real estate portfolio holder.
Rail
We announced a contract for Crossrail worth over GBP0.8m during
the first half of 2011 which has progressed well. For both
Remediation and Consulting, this remains a significant opportunity
for us as we have developed service skillsets in both overground
and underground rail services.
Commercial
A three year framework renewal has been negotiated with a
national primary insurance provider to remove asbestos from
properties following accidental damage. An ability to react
responsively and consistently with large and small scale solutions
was key to our successful renewal of this contract. Within
Consulting we have also secured a 3 year management contract for
the property estate of a major national broadcaster.
Summary and Outlook
During the period under review, management have taken actions to
win important new contracts, generate cash, control costs and gain
market share.
For the year ahead, we intend to further strengthen the
Silverdell business and create shareholder value through:
-- The continued rollout of our 'Protecting Lives, Creating
Value' strategy internally and externally
-- Developing our product and geographic capability through new
service offerings and through bolt-on acquisitions where there
exists a clear strategic rationale and identifiable cost
savings
-- Improving existing client relationships by offering bundled
services with unmatched quality
-- Continuing to improve cost efficiencies and cash management
across the Group
Our strength lies in our knowledge and expertise in operating in
highly regulated environments where compliance to specific
regulations is vital to success. We are confident that we have a
strong business which will not only continue to gain market share
during the current economic conditions but which is perfectly
placed to grow as economic conditions improve, both in the UK and
overseas.
Sean Nutley
Group Chief Executive
Silverdell Plc
Condensed consolidated income statement
For the six months ended 31 March 2011
Financial Review
Revenue for the six months ended 31 March 2011 was GBP27.9m
(2010: GBP29.6m), down 5.6%. Second quarter remediation revenues
showed a marked improvement on the first quarter which was affected
by poor weather as well as sluggish public sector orders at the
beginning of the financial year. Gross margin was up 2.6 ppts on
last year at 27.6% (2010: 25.0%) largely as a result of a change in
business mix arising from the success of Redhills, the Group's main
Consulting business, which comprised 13.6% of the Group's gross
revenues during the first half (2010: 9.7%). Underlying Remediation
gross margin was broadly constant.
Administrative costs, excluding share-based payments, were
GBP6.3m (2010: GBP5.9m), up 7% due to our strategic investment in
the external positioning of the business as well as overseas
business development. Administrative costs as a share of net
revenue was 22.5% (2010: 19.9%), due to a combination of the higher
administrative costs and the lower revenue in the first
quarter.
Adjusted EBITDA (before intangibles amortisation and share-based
payment charges) was GBP1.7m (2010: GBP1.9m). Reported profit
before tax was GBP1.1m (2010: GBP0.6m) up 87%, because there was no
intangible asset amortisation in the first half (2010: GBP0.6m),
these assets having been fully written down last year.
Cash generated from operations for the six months ended 31 March
2010 was GBP1.1m (2010: GBP(0.5)m). Net debt at 31 March 2011 was
GBP3.9m (2010: GBP5.8m), GBP1.9m lower than at 31 March 2010 and
GBP0.3m lower than at 30 September 2010. This cash performance was
achieved by working to reduce the working capital tied up in a
number of significant contracts, although this was offset partly by
higher levels of trade debtors as we ended the half year at a
higher sales run-rate. Gearing at 31 March 2011 was 20% (2010:
32%).
Basic earnings per share was 0.5 pence (2010: 0.1 pence).
During the first half of the year we completed the capital
reduction exercise which created additional retained earnings of
GBP34.1m, thereby eliminating the brought forward retained losses
and enabling the Group to consider paying a dividend in due course.
This was achieved by the cancellation of the share premium account
and capital reserve and the issuance and immediate cancellation of
deferred shares out of the Company's other reserve.
On 1 April 2011, immediately after the half year end, the Group
completed the acquisition of A H Allen Limited, an asbestos
consultancy business based in Hull for a total consideration of
GBP900k including a deferred element of GBP350k, which is dependent
on the achievement of performance targets for the next two years.
The integration of AH Allen into Redhills is progressing well.
Ian Johnson
Chief Financial Officer
Silverdell Plc
Condensed consolidated income statement
For the six months ended 31 March 2011
Unaudited Unaudited Audited
6 months 6 months
ended ended Year ended
31 March 31 March 30 September
2011 2010 2010
Note GBP'000 GBP'000 GBP'000
Revenue 2 27,928 29,598 56,674
Cost of sales (20,216) (22,189) (41,974)
Gross profit 7,712 7,409 14,700
Administrative expenses (6,404) (5,890) (11,595)
Amortisation of intangible
assets - (601) (601)
Total administrative
expenses (6,404) (6,491) (12,196)
Operating profit 1,308 918 2,504
Finance costs 3 (243) (349) (672)
Profit before tax 1,065 569 1,832
T axation 5 (239) (400) (1,095)
Profit for the period 826 169 737
Earnings per share
(Pence)
Basic earnings per
ordinary share 6 0.5 0.1 0.5
Diluted earnings per
ordinary share 6 0.5 0.1 0.5
Silverdell Plc
Condensed consolidated statement of comprehensive income
For the six months ended 31 March 2011
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
31 March 31 March 30 September
2011 2010 2010
GBP'000 GBP'000 GBP'000
Profit for the period 826 169 737
Other comprehensive income Cash
flow hedges: - gain arising
during the period 125 42 86
- related tax charge taken
direct to equity (34) (12) (24)
91 30 62
Total comprehensive income 917 199 799
Condensed consolidated statement of changes in equity
For the six months ended 31 March 2011
6 months ended 31 March 2011
Share Share Other Equity Capital Hedging Retained
capital premium reserve reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October
2010 1,516 17,813 16,635 464 3,749 (52) (21,172) 18,953
Net profit for
the period - - - - - - 826 826
Other
comprehensive
income - - - - - 91 - 91
Total
comprehensive
income for
the period - - - - - 91 826 917
Share-based
payments
including
tax - - - 151 - - - 151
Capital
cancellation* - (17,813) (12,500) - (3,749) - 34,062 -
At 31 March
2011 1,516 - 4,135 615 - 39 13,716 20,021
*During the period the Company cancelled the share premium
account and capital reserve and issued then immediately cancelled
GBP12.5m of deferred shares out of the other reserve.
Silverdell Plc
Condensed consolidated statement of changes in equity
(continued)
For the six months ended 31 March 2011
6 months ended 31 March 2010
Share Share Other Equity Capital Hedging Retained
capital premium reserve reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October
2009 5,265 17,813 16,635 334 - (114) (21,909) 18,024
Net profit for
the period - - - - - - 169 169
Other
comprehensive
income - - - - - 30 - 30
Total
comprehensive
income for
the period - - - - - 30 169 199
Share-based
payments
including
tax - - - 13 - - - 13
At 31 March
2010 5,265 17,813 16,635 347 - (84) (21,740) 18,236
Year ended 30 September 2010
Share Share Other Equity Capital Hedging Retained
capital premium reserve reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October
2009 5,265 17,813 16,635 334 - (114) (21,909) 18,024
Net profit for
the year - - - - - - 737 737
Other
comprehensive
income - - - - - 62 - 62
Total
comprehensive
income for
the year - - - - - 62 737 799
Shares
cancelled (3,749) - - - 3,749 - - -
Share-based
payments
including
tax - - - 130 - - - 130
At 30
September
2010 1,516 17,813 16,635 464 3,749 (52) (21,172) 18,953
Silverdell Plc
Condensed consolidated balance sheet
At 31 March 2011
Unaudited Unaudited Audited
31 March 31March 30 September
2011 2010 2010
Note GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 4 16,156 16,156 16,156
Property, plant and
equipment 1,948 2,165 1,999
Trade and other receivables 1,001 1,001 1,001
Deferred tax asset - 132 -
19,105 19,454 19,156
---------- ---------- -------------
Current assets
Inventories and
work-in-progress 1,495 1,550 998
Other financial assets 1 1 -
Trade and other receivables 14,561 13,802 12,774
Cash and cash equivalents 3,264 2,042 3,626
19,321 17,395 17,398
---------- ---------- -------------
Total assets 38,426 36,849 36,554
---------- ---------- -------------
Non-current liabilities
Borrowings (4,713) (3,989) (4,777)
Deferred tax liabilities (23) - (15)
Trade and other payables (1,001) (1,001) (1,001)
(5,737) (4,990) (5,793)
---------- ---------- -------------
Current liabilities
Borrowings (2,494) (3,850) (3,117)
Trade and other payables (9,780) (9,437) (8,114)
Other financial liabilities (33) (115) (71)
Current taxation liabilities (361) (221) (506)
(12,668) (13,623) (11,808)
---------- ---------- -------------
Total liabilities (18,405) (18,613) (17,601)
---------- ---------- -------------
Net assets 20,021 18,236 18,953
---------- ---------- -------------
Equity
Share capital 1,516 5,265 1,516
Share premium account - 17,813 17,813
Equity reserve 615 347 464
Hedging reserve 39 (84) (52)
Capital reserve - - 3,749
Other reserve 4,135 16,635 16,635
Retained earnings 13,716 (21,740) (21,172)
---------- ---------- -------------
Total equity 20,021 18,236 18,953
---------- ---------- -------------
Silverdell Plc
Condensed consolidated cash flow statement
For the six months ended 31 March 2011
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
31 March 31 March 30 September
2011 2010 2010
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit for the period 826 169 737
Income tax charge 239 400 1,095
Finance costs 243 349 672
Amortisation of intangibles - 601 601
Profit on the sale of property,
plant and equipment (28) (11) (34)
Depreciation of property, plant
and equipment 256 343 701
Share-based payments 125 13 130
Movements in working capital:
(Increase) /decrease in inventories
and work-in-progress (497) 74 626
Increase in trade and other receivables (1,722) (1,111) -
Increase / (decrease) in trade
and other payables 1,666 (1,288) (2,591)
Cash generated from operations 1,108 (461) 1,937
Income tax paid (384) - (269)
Net cash inflow / (outflow) from
operating activities 724 (461) 1,668
Cash flows from investing activities
Payments for property, plant and
equipment (156) (195) (363)
Proceeds from sale of property,
plant and equipment 31 40 75
Net cash outflow from investing
activities (125) (155) (288)
Cash flows from financing activities
Interest paid (215) (246) (744)
Interest paid on finance leases (6) (6) (1)
Payments for hire purchase principals (10) (101) (124)
Proceeds from bank loans - - 5,500
Repayments of bank loans (400) (1,428) (6,450)
Net cash outflow from financing
activities (631) (1,781) (1,819)
Net decrease in cash and cash
equivalents (32) (2,397) (439)
Cash and cash equivalents at beginning
of the period 1,286 1,725 1,725
Cash and cash equivalents at end
of the period 1,254 (672) 1,286
Silverdell Plc
Notes to the condensed consolidated interim financial
statements
1. Basis of preparation
Silverdell Plc is a public limited company incorporated and
domiciled in the United Kingdom. The Company's ordinary shares are
traded on the AIM market of the London Stock Exchange.
The condensed interim financial statements for the six months
ended 31 March 2011 have been prepared in accordance with the
accounting policies expected to be applied to the full year
financial statements for the year ending 30 September 2011, which
are consistent with International Financial Reporting Standards
("IFRS") as adopted for use in the European Union (EU). The
directors have elected not to apply International Accounting
Standard 34, Interim Financial Reporting, which is not mandatory
for AIM-listed companies.
The interim financial statements are unaudited and do not
constitute statutory accounts within the meaning of section 434 of
the Companies Act 2006. The financial information for the year
ended 30 September 2010 has been extracted from the audited annual
report and accounts which have been filed with the Registrar of
Companies. The auditors' report on the statutory accounts for the
year ended 30 September 2010 was unqualified and did not contain a
statement under section 498 of the Companies Act 2006.
The interim financial statements do not include all of the
information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's
annual financial statements for the year ended 30 September 2010.
The figures for the six months ended 31 March 2010 have been
extracted from the interim results for that period.
Going concern
After making enquiries, the directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly they
continue to adopt the Going Concern basis in preparing the interim
financial statements.
Silverdell Plc
Notes to the condensed consolidated interim financial statements
(continued)
2. Segmental reporting
Management consider that the Group comprises two segments -
Remediation and Consulting- within the meaning of IFRS8, "Operating
segments".
6 months ended 31 March 2011
Remediation Consulting Unallocated Group
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Total revenue 24,476 3,869 - 28,345
Less: between segments (189) (228) - (417)
External revenue 24,287 3,641 - 27,928
Result
Operating
profit/(loss) before
amortisation 1,436 635 (763) 1,308
Finance costs (10) (4) (229) (243)
Profit/(loss) before
tax 1,426 631 (992) 1,065
Taxation (320) (142) 223 (239)
Profit/(loss) for the
period 1,106 489 (769) 826
Balance sheet
Total assets 28,983 9,168 275 38,426
Total liabilities (13,064) (1,537) (3,804) (18,405)
Other information
Capital expenditure 138 65 5 208
Depreciation 212 35 9 256
Silverdell Plc
Notes to the condensed consolidated interim financial statements
(continued)
2. Segmental reporting (continued)
6 months ended 31 March 2010
Remediation Consulting Unallocated Group
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Total revenue 27,069 2,922 - 29,991
Less: between segments (391) (2) - (393)
External revenue 26,678 2,920 - 29,598
Result
Operating profit/(loss)
before amortisation 1,974 281 (736) 1,519
Intangible assets
amortisation (515) (86) - (601)
Finance costs (6) (5) (338) (349)
Profit / (loss) before tax 1,453 190 (1,074) 569
Taxation (1,035) (122) 757 (400)
Profit / (loss) for the
period 418 68 (317) 169
Balance sheet
Total assets 28,971 7,637 241 36,849
Total liabilities (10,719) (871) (7,023) (18,613)
Other information
Capital expenditure 136 9 50 195
Depreciation 281 54 8 343
Silverdell Plc
Notes to the condensed consolidated interim financial statements
(continued)
2. Segmental reporting (continued)
Year ended 30 September 2010
Remediation Consulting Unallocated Group
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Total revenue 50,562 6,404 - 56,966
Less: between segments (221) (71) - (292)
External revenue 50,341 6,333 - 56,674
Result
Operating
profit/(loss) before
amortisation 3,643 897 (1,435) 3,105
Intangible assets
amortisation (515) (86) - (601)
Finance costs 10 (13) (669) (672)
Profit / (loss) before
tax 3,138 798 (2,104) 1,832
Taxation (1,329) (262) 496 (1,095)
Profit / (loss) for
the year 1,809 536 (1,608) 737
Balance sheet
Total assets 28,040 8,129 385 36,554
Total liabilities (9,551) (850) (7,200) (17,601)
Other information
Capital expenditure 293 52 52 397
Depreciation 573 111 17 701
Silverdell Plc
Notes to the condensed consolidated interim financial statements
(continued)
3. Finance costs
Year ended
6 months ended 6 months ended 30 September
31 March2011 31 March 2010 2010
GBP'000 GBP'000 GBP'000
Interest on bank loans
and overdrafts (237) (335) (662)
Interest on finance
leases (6) (6) (1)
Change in fair value of
derivative financial
instruments - (8) (9)
(243) (349) (672)
4. Goodwill
The Group tests goodwill annually for impairment or more
frequently if there are indications that goodwill might be
impaired. Goodwill is allocated for impairment testing to Cash
Generating Units ("CGUs") which reflects how it is monitored for
internal management purposes. Value in use is calculated using
pre-tax cash flow projections based on the financial budgets and
business plans covering a three year period, which take into
account historical trends and market conditions, and which have
been approved by the Board. The key assumptions are those regarding
the discount rates and growth rates for the period. Management
estimates discount rates using pre-tax rates that reflect current
market assessments of the time value of money and the risks
specific to the CGU's, equivalent to a real pre-tax discount rate
which averages 12%. The growth rates are based on industry growth
forecasts and long-term growth in gross domestic product.
The Group prepares cashflow forecasts derived from the most
recent financial budgets approved by management for the next three
years and extrapolates cash flows for the following years based on
an estimated annual growth rate of 2.4%. The rates do not exceed
the average long-term growth rate for the relevant markets. The
rates used to discount the cash flows for all CGUs have been based
on the Group's weighted average cost of capital.
The Group's impairment review is sensitive to changes in the key
assumptions used. The major assumptions that result in significant
sensitivities are the revenue growth and the discount rate. Given
the Group's sensitivity analysis, a reasonably possible change in a
single assumption will not result in further impairments. The
carrying amounts of goodwill relating to the Group's two business
segments are as follows:
31 March 2011 31 March 2010 30 September 2010
GBP'000 GBP'000 GBP'000
Remediation 10,869 10,869 10,869
Consulting 5,287 5,287 5,287
16,156 16,156 16,156
Silverdell Plc
Notes to the condensed consolidated interim financial statements
(continued)
5. Taxation
Year ended
6 months ended 6 months ended 30 September
31 March 2011 31 March2010 2010
GBP'000 GBP'000 GBP'000
Current tax
Corporation tax on profits
for the period (328) (345) (915)
Adjustment in respect of
prior periods 89 (233) (226)
Total current tax (239) (578) (1,141)
Deferred tax
Origination and reversal of
temporary differences - 178 239
Adjustment in respect of
prior periods - - (193)
Total deferred tax - 178 46
Total tax charge (239) (400) (1,095)
The taxation charge for the six months ended 31 March 2011
comprises corporation tax on profits of the period based on the
expected effective tax rate for the full financial year, together
with an adjustment of the corporation tax liability in respect of
previous periods.
6. Earnings per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares during the period, determined in
accordance with the provisions of IAS 33 "Earnings per share".
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares in issue on the
assumption of conversion of all dilutive potential ordinary shares.
The Group has only one category of dilutive potential ordinary
shares, being share options granted where the exercise price is
less than the average price of the Company's ordinary shares during
the period.
Adjusted basic earnings per share is calculated by dividing the
earnings attributed to ordinary shareholders, before intangible
assets amortisation and share-based payment charges, by the
weighted average number of ordinary shares during the period.
Silverdell Plc
Notes to the condensed consolidated interim financial statements
(continued)
6. Earnings per share (continued)
6
months Year
to 31 6 months ended 30
March to 31 September
2011 Basic Diluted March2010 Basic Diluted 2010 Basic Diluted
GBP'000 p p GBP'000 p p GBP'000 p p
Profit
attributable
to ordinary
shareholders 826 0.5 0.5 169 0.1 0.1 737 0.5 0.5
Amortisation
of
intangible
assets - - - 601 0.4 0.4 601 0.4 0.4
Related tax
credits - - - (171) (0.1) (0.1) (157) (0.1) (0.1)
Share-based
payments 125 0.1 0.1 13 - - 130 0.1 0.1
Profit for
adjusted
earnings per
share 951 0.6 0.6 612 0.4 0.4 1,311 0.9 0.9
The adjusted numbers have been reported in order that the impact
of the above charges against profit can be fully appreciated.
6 months Year
6 months ended ended ended
31 March 31 March 30 September
2011 2010 2010
Number Number Number
Number of shares
Weighted average number of
ordinary shares used in
calculation of basic earnings
per share 151,654,717 151,654,717 151,654,717
Effect of dilutive potential
ordinary shares: Share options 5,834,160 27,256 353,309
Weighted average number of
ordinary shares used in
calculation of diluted earnings
per share 157,488,877 151,681,973 152,008,026
Silverdell Plc
Notes to the condensed consolidated interim financial statements
(continued)
7. Net debt
6 months 6 months Year
ended ended ended
31 March 31 March 30 September
2011 2010 2010
GBP'000 GBP'000 GBP'000
Bank overdraft (2,010) (2,714) (2,340)
Cash at bank 3,264 2,042 3,626
Cash and cash equivalents 1,254 (672) 1,286
Bank loans (5,113) (5,094) (5,513)
Obligations under finance leases (84) (31) (41)
Net debt (3,943) (5,797) (4,268)
The Directors are responsible for the maintenance and integrity
of financial information on the Company's website. Legislation in
the United Kingdom governing the preparation and dissemination of
financial information differs from legislation in other
jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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