RNS Number : 3635V
Silverdell PLC
28 May 2008
28 May 2008
Silverdell Plc
("Silverdell" or the "Group")
Interim Results for the half year ended 31 March 2008
Silverdell, the UK's leading supplier of asbestos removal and consultancy services, today announces its second set of interim results
since its successful flotation on AIM in April 2006.
Highlights
* Turnover of £27.3m (2007: £15.6m)
* Operating profit before intangible asset amortisation of £0.6m (2007: £1.8m)
* Operating loss of £0.6m (2007: profit £0.8m)
* Adjusted earnings per share of 1.1p* (2007: 4.3p)
* Group financial performance held back by late commencement of two major contracts and lower margin work within Silverdell (UK) Limited
* H2 financial performance commenced in line with expectations
*based on profit after taxation before intangible asset amortisation and share-based payment charge
David Williams, Chairman of Silverdell, commented:
"The outlook generally, and for the second half specifically, is encouraging. The Group's broad service offering and expertise remain
key differentiators within the asbestos services market. As a leading provider in the industry, we remain in a strong position to continue
to benefit from the growth opportunities we believe the market continues to hold."
- ENDS -
For further information, please contact:
Silverdell
Chris Sims, Group Finance Director 020 7004 2744
Collins Stewart
Hugh Field, Piers Coombs 020 7523 8350
Financial Dynamics
Jonathon Brill, Billy Clegg, Alex Beagley 020 7831 3113
Chairman's statement
This is our second interim report as a listed company and includes results from all three of the Group's subsidiaries for the entire
period, being Silverdell (UK) Limited ("Silverdell (UK)"), Redhill Analysts Limited ("Redhill Analysts") and Kitsons Group Limited
("Kitsons"). In the comparable period to 31 March 2007, Redhill Analysts was included for only three months and Kitsons was not part of the
Group.
The 2008 interim report has been prepared in accordance with International Financial Reporting Standards (IFRS), which have been adopted
from 1 October 2006. On 28 March 2008, the Company published restated consolidated financial information for the year ended 30 September
2007 (the "IFRS report"), which include reconciliations showing the changes between UK GAAP and IFRS disclosure format and the changes
arising from the adoption of IFRS. The accounting policies used in the interim report are consistent with those which the directors intend
to use in the annual financial statements. The accounting policies are set out in section 3 of the IFRS report and are available on our
website (www.silverdell.plc.uk).
Financial overview
Turnover for the six months ended 31 March 2008 was £27.3m (2007: £15.6m) and operating profit before intangible asset amortisation
was £0.6m (2007: £1.8 m). The adjusted basic earnings per share (as defined in note 5) were 1.1p (2007: 4.3p).
Operational review
The integration of Redhill Analysts and Kitsons has progressed well and the financial performance of both of these subsidiaries in the
first half has been as expected. Redhill Analysts gained significant contract wins from EDF and Thames Water and has benefited from other
workflow as a result of being part of the Group. At Kitsons, work has commenced at the Chapelcross nuclear site and the company also
completed a large insulation project during the period.
The Group's first half results have however been held back by performance at Silverdell (UK), specifically:
(i) work on two large contracts, the Shell Tower and the Regent Palace Hotel, commenced later than expected, eventually starting in
March; and
(ii) in order to help grow and diversify the client base, Silverdell (UK) undertook some lower margin work.
Consequently, Group turnover was slightly behind expectations and gross and operating margin further so. Prospects for the second half
are good; in addition to work at the Shell Tower and Regent Palace Hotel, contracts with several major retailers are also commencing.
Outlook
The Group's broad service offering and expertise remain key differentiators within the asbestos services market. As a leading provider
in the industry, we remain in a strong position to continue to benefit from the growth opportunities we believe the market continues to
hold.
With the two major contracts now underway and a high level of enquiries across all Group companies, we anticipate a significantly
improved performance in the second half of the year. We do not however anticipate recovering the shortfall we have experienced in the first
half. For 2009 and beyond our prospects for growth remain strong.
David Williams, Chairman
28 May 2008
Financial highlights for the six months ended 31 March 2008
Unaudited Unaudited
Six months to Six months to Twelve months to
31 March 31 March 30 September
2008 2007 2007
(restated) (restated)
£m £m £m
Continuing operations:
Turnover 27.3 15.6 38.5
Operating profit before 0.6 1.8 4.3
intangible asset amortisation
Operating (loss)/profit (0.6) 0.8 2.2
(Loss)/profit before tax (1.1) 0.4 1.4
Pence Pence Pence
(Loss)/earnings per share:
Adjusted basic (see note 5) 1.1 4.3 9.6
Basic (2.0) 0.6 2.1
Diluted (2.0) 0.6 1.9
Consolidated income statement for the six months ended 31 March 2008
Unaudited
Six months to Six months to Twelve months to
31 March 2008 31 March 30 September
2007* 2007*
Notes £000 £000 £000
Revenue - continuing 27,332 15,580 38,498
operations
Cost of Sales (20,090) (10,070) (24,808)
7,242 5,510 13,690
Administrative expenses (7,891) (4,743) (11,489)
Operating profit before 611 1,756 4,331
intangible asset amortisation
Intangible asset amortisation (1,260) (989) (2,130)
Operating (loss)/profit - (649) 767 2,201
continuing operations
Net finance costs 3 (478) (333) (774)
(Loss)/profit on ordinary (1,127) 434 1,427
activities before taxation
Income tax expense 4 224 (223) (670)
(Loss)/profit for the period (903) 211 757
attributable to the equity
shareholders of the parent
Pence Pence Pence
Earnings per share
Basic earnings per share (2.0) 0.6 2.1
Diluted earnings per share (2.0) 0.6 1.9
*Restated under IFRS (see note
9)
Consolidated statement of recognised income and expanse for the six months ended 31 March 2008
Unaudited
Six months to Six months to Twelve months to
31 March 31 March 30 September
2008 2008* 2007*
£000 £000 £000
Changes in the fair value of (152) (19) 86
interest rate swaps
Taxation on above taken 42 5 (24)
directly to equity
Net (losses)/gains recognised (110) (14) 62
directly in equity
Profit for the period (903) 211 757
Total recognised income (1,013) 197 819
attributable to equity
shareholders
*Restated under IFRS (see note
9)
Consolidated balance sheet as at 31 March 2008
Unaudited
As at As at As at
31 31 March 30
March 2007 September
2008 2007
(restated) (restated)
£000 £000 £000
Assets
Non-current assets
Goodwill 35,395 25,146 37,127
Intangible assets 3,632 3,849 4,494
Property, plant and equipment 2,821 2,152 2,480
41,848 31,147 44,101
Current assets
Inventories 3,042 1,848 1,278
Trade and other receivables 13,015 9,506 17,135
Other financial assets - - 86
Cash and cash equivalents 6 1,097 1,418
16,063 12,451 19,917
Total assets 57,911 43,598 64,018
Liabilities
Current liabilities
Bank overdrafts and borrowings 974 - -
Bank loans 1,950 - 2,150
Obligations under finance leases 455 293 483
Other financial liabilities 66 19 -
Trade and other payables 6,152 5,023 10,229
Current tax liabilities 366 729 1,932
Deferred consideration - 3,820 3,000
9,963 9,884 17,794
Net current assets 6,100 2,567 2,123
Non-current liabilities
Bank loans 11,050 4,250 6,850
Obligations under finance leases 333 857 529
Trade and other payables 1,001 1,001 1,001
Deferred tax liabilities 850 1,052 1,110
Deferred consideration - 3,000 2,649
13,234 10,160 12,139
Total liabilities 23,197 20,044 29,933
Net assets 34,714 23,554 34,085
Equity
Called up share capital 4,165 3,402 4,068
Share premium reserve 13,649 13,649 13,649
Other reserve 16,635 6,115 15,233
Hedging reserve (48) (14) 62
Equity reserve 511 243 368
Retained earnings (198) 159 705
Total shareholders' equity 34,714 23,554 34,085
Consolidated cash flow statement for the six months ended 31 March 2008
Unaudited Unaudited
Six months to Six months to Twelve months
31 March 31 March to
2008 2007 30 September
2007
(restated) (restated)
£000 £000 £000 £000 £000 £000
Cash flows from operating
activities
Operating profit (649) 767 2,201
Depreciation charges 395 203 556
Amortisation of intangible 1,260 989 2,130
assets
(Profit) on sale of tangible (4) (4) (7)
fixed assets
Share-based payment charge 128 80 171
(Increase)/decrease in (1,736) 461 1,590
inventories
Decrease/(increase) in trade 4,295 (34) (4,858)
and other receivables
(Decrease)/increase in trade (2,725) (1,517) 1,260
and other payables
Cash generated from operations 964 945 3,043
Interest received 33 47 72
Bank and loan interest paid (485) (92) (324)
Interest element of finance (26) (38) (79)
lease rentals
(478) (83) (331)
Tax paid (1,695) - (734)
Net cash from operating (1,209) 862 1,978
activities
Cash flows from investing
activities
Purchase of property, plant (208) (165) (438)
and equipment
Proceeds from sale of plant 25 2 98
and equipment
Purchase of businesses:
Acquisitions (3,603) (6,627) (12,633)
Deferred consideration (1,500) - -
Cash/(borrowings) acquired 372 (258) 1,356
with subsidiary undertakings
Net cash used in investing (4,914) (7,048) (11,617)
activities
Cash flows from financing
activities
Net proceeds from issue of new 4,750 5,000 9,000
loans
Repayment of borrowings (750) - -
Finance lease principal (263) (131) (357)
repayments
Net cash raised in financing 3,737 4,869 8,643
activities
Net decrease in cash and cash (2,386) (1,317) (996)
equivalents
Cash and cash equivalents at 1,418 2,414 2,414
beginning of period
Cash and cash equivalents at (968) 1,097 1,418
end of period
Cash and cash equivalents
consist of:
Cash at bank and in hand 6 1,097 1,418
Bank overdraft (974) - -
(968) 1,097 1,418
Notes to the interim financial statements for the six months ended 31 March 2008
1. Basis of preparation
Silverdell plc has been required to adopt International Financial Reporting Standards ('IFRS') with effect from 1 October 2007. The
results for the six months ended 31 March 2008 represent the Group's first interim financial statements prepared in accordance with its
accounting policies under IFRS. The Group's first IFRS Annual Report and Accounts will be for the year ending 30 September 2008. Previously
the Group reported under UK generally accepted accounting principles ('UK GAAP'). A statement ('the IFRS report') was issued on 26 March
2008 incorporating: detailed IFRS accounting policies; UK GAAP to IFRS reconciliations of equity as at 1 October 2006 (the date of
transition) and as at 30 September 2007; reconciliations of profit and change in equity for the year ended 30 September 2007; and
explanations of the main adjustments. The statement is available on the Group's website, www.silverdell.plc.uk. Reconciliations of equity as
at 31 March 2007 (the date of the last Interim report under UK GAAP) and of income for the six months then ended are set out in note 8.
These interim financial statements have been prepared by the Group using those standards it expects to be endorsed and applicable when
the IFRS accounts are prepared for the year ending 30 September 2008 and are set out in section 3 of the IFRS report. The directors have
elected not to apply International Accounting Standard 34 "Interim financial reporting" and consequently the interim financial statements
are not fully compliant with IFRS.
The interim results are unaudited. The financial information herein does not amount to full statutory accounts within the meaning of
Section 240 of the Companies Act 1985. The figures for the year to 30 September 2007 have been extracted from the IFRS restatements issued
on 26 March 2008 and were based on the Annual Report and Accounts 2007 which has been filed with the Registrar of Companies and the Interim
Report 2007. The auditors have made a report under Section 235 of the Companies Act 1985 on the statutory accounts for the year ended 30
September 2007 which was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985.
2. Segmental reporting
Principally, all turnover and profits derive from asbestos remediation and consulting and associated activities within the UK, and
consequently no segmental or geographical analysis is presented.
3. Net interest and finance charges payable
Six months ended Six months ended Year ended
31 March 2008 31 March 2007 30 September 2007
£000 £000 £000
Bank loans and overdraft 485 92 324
Interest on finance leases 26 38 79
Finance charges on deferred - 250 443
consideration
511 380 846
Interest receivable on bank (33) (47) (72)
deposits
478 333 774
4. Taxation
The taxation charge for the six months to 31 March 2008 has been calculated using the estimated effective tax rate for the year to 30
September 2008.
5. Earnings per share
Basic (loss)/earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the aggregate of the
weighted average number of ordinary shares in existence during the period and the warrant to Marwyn Neptune Fund LP, in respect of which all
conditions precedent had been met by 1 October 2007.
Diluted (loss)/earnings/ per share is calculated as basic earnings per share adjusted to include dilutive potential ordinary shares
where fair value price exceeds option price, relating to shares allotted under employee share schemes.
Adjusted earnings per share is based on the earnings attributable to ordinary shareholders as adjusted for the share based payment
charge, amortisation of intangible assets, and finance charges on deferred consideration.
Earnings
Six months ended Six months ended Year ended
31 March 2008 31 March 2007 30 September 2007
earnings per share earnings per share earnings/(loss) per share
£000 basic pence diluted pence £000 basic pence diluted pence £000 basic pence diluted pence
(Loss)/earnings attributable (903) (2.0) (2.0) 211 0.6 0.6 757 2.1 1.9
to ordinary shareholders
Share-based payment charge 128 0.3 0.3 80 0.2 0.2 171 0.5 0.4
Intangible asset amortisation 1,260 2.8 2.8 989 2.8 2.7 2,130 5.8 5.6
Finance charges on deferred - - - 250 0.7 0.7 443 1.2 1.1
consideration
Profit for adjusted earnings 485 1.1 1.1 1,530 4.3 4.2 3,501 9.6 9.0
per share
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
Six months ended 31 Six months ended 31 March Year ended
March 2008 2007 30
September
2007
Weighted average number of
ordinary shares used in
calculation of basic earnings 44,296,308 35,717,489 36,479,265
per share
Effect of dilutive potential
ordinary shares:
Share options and warrant 1,246,445 505,391 2,361,897
Weighted average number of
ordinary shares used in
calculation of diluted 45,542,753 36,222,880 38,841,162
earnings per share
6. Net debt
As at As at As at
31 March 31 March 30
2008 2007 September
2007
£000 £000 £000
(Bank overdraft)/cash at bank (974) 1,097 1,418
Cash in hand 6 - -
Bank loans (13,000) (5,000) (9,000)
Finance leases (788) (1,150) (1,011)
(14,756) (5,053) (8,593)
7. Business combination
On 1 October 2007 Silverdell (UK) Limited acquired the entire issued share capital of Swift Asbestos Holdings Limited for a
consideration of £1,776,000 in cash including costs. A further £167,000 is due to vendors. Acquisition of net assets of £889,000
(including property to the value of £400,000 and cash of £372,000) gave rise to goodwill £768,000 and intangible assets £286,000 after
tax of £111,000.
8. Movement in equity
Share Capital £000 Share Premium £000 Other Reserve £000 Hedging Reserve £000 Equity Reserve £000
Retained Earnings Total £000
£000
At 1 October 2007 4,068 13,649 15,233 62 368
705 34,085
Net (loss) for the period - - - - -
(903) (903)
Change in the fair value of - - - (152) -
- (152)
interest rate swaps
Taxation on items taken - - - 42 -
- 42
directly to equity
Total recognised (loss) for - - - (110) -
(903) (1,013)
the period
Shares issued 97 - 1,402 - -
- 1,499
Share-based payment charge - - - - 143
- 143
including tax
At 31 March 2008 4,165 13,649 16,635 (48) 511
(198) 34,714
Share Capital Share Premium Other Reserve Hedging Reserve Equity Reserve
Retained Earnings Total
£000 £000 £000 £000 £000
£000 £000
At 1 October 2006 3,220 13,649 4,081 - 33
(52) 20,931
Net profit for the period - - - - -
211 211
Change in the fair value of - - - (19) -
- (19)
interest rate swaps
Taxation on items taken - - - 5 -
- 5
directly to equity
Total recognised profit for - - - (14) -
211 197
the period
Shares issued 182 - 2,034 - -
- 2,216
Share-based payment charge - - - - 210
- 210
including tax
At 31 March 2007 3,402 13,649 6,115 (14) 243
159 23,554
Share Capital Share Premium Other Reserve Hedging Reserve Equity Reserve
Retained Earnings Total
£000 £000 £000 £000 £000
£000 £000
At 1 October 2006 3,220 13,649 4,081 - 33
(52) 20,931
Net profit for the period - - - - -
757 757
Change in the fair value of - - - 86 -
- 86
interest rate swaps
Taxation on items taken - - - (24) -
- (24)
directly to equity
Total recognised profit for - - - 62 -
757 819
the period
Shares issued 848 - 11,152 - -
- 12,000
Share-based payment charge - - - - 335
- 335
including tax
At 30 September 2007 4,068 13,649 15,233 62 368
705 34,085
9. Transition to IFRS
As explained in note 1, the year ending 30 September 2008 is the first year that the Group is presenting financial statements under
IFRS. The last annual financial statements presented under UK GAAP were for the year ended 30 September 2007. Reconciliations of equity at 1
October 2006, 30 September 2007 and profit for the year to 30 September 2007 as reported under UK GAAP to those reported under IFRS were
published on 26 March 2008 and are available on the company's website. Reconciliations between previously reported interim and full year
figures under UK GAAP and restated figures under IFRS are set out below.
IFRS 1 ('First time Adoption of International Financial Reporting Standards') requires an explanation of major adjustments to cash flows
under IFRS. Whilst the format of the cash flow statement is different from UK GAAP, there are no material changes to cash flows from
operations, investing or financing.
Reconciliation of equity previously reported under UK GAAP to equity under IFRS
Unaudited
31 March 2007 30 September 2007
£000 £000
Equity shareholders' funds under UK GAAP 23,524 33,981
IFRS adjustments:
IAS38 Intangible assets amortisation (net (883) (1,709)
of taxation)
IFRS3 Goodwill not charged 796 1,582
IFRS2/IAS12 Taxation on share-based payment 123 169
charge
IAS39 Derivative financial instruments (14) 62
Equity shareholders' funds under IFRS 23,546 34,085
Reconciliation of profit previously reported under UK GAAP to equity under IFRS
Unaudited
31 March 2007 30 September 2007
£000 £000
Profit for the period under UK GAAP 298 872
IFRS adjustments:
IAS38 Intangible assets amortisation (net (692) (1,506)
of taxation)
IFRS3 Goodwill not charged 605 1,391
211 757
This information is provided by RNS
The company news service from the London Stock Exchange
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