TIDMSID
RNS Number : 7480S
Silverdell PLC
05 December 2012
Silverdell Group PLC
("Silverdell" or the "Group")
Preliminary results for the year ended 30 September 2012
Silverdell plc (AIM: SID), the Specialist Environmental Support
Services group reports preliminary results for the full year ended
30 September 2012.
Financial Highlights
-- Revenue up 38% to GBP82.5m (2011: GBP59.7m)
-- Gross profit up 27% at GBP20.4m (2011: GBP16.1m**)
-- Adjusted EBITDA* up 51% to GBP6.2m (2011: GBP4.1m)
-- Adjusted pre-tax profit* up 43% at GBP4.3m (2011: GBP3.0m)
-- Adjusted EPS* up 7% at 1.5p (2011: 1.4p)
-- Net senior debt (excluding lease finance) down GBP0.5m to GBP4.5m (2011: GBP5.0m)
-- Recommendation of maiden dividend of 0.175 pence per share to be paid in March 2013
* Before non-recurring items, impairment charges, amortisation and share based payments.
** As restated for the reclassification of certain depreciation
charges previously classified as administrative expenses
Operational Highlights
-- Transformational acquisition of EDS and associated equity fundraising of GBP8.5m
-- Group is now a provider of end-to-end decommissioning services with world-wide reach
-- Contracts secured during the period include:
o Decommissioning / disinvestment contract worth approx.
GBP10.7m in Ontario, Canada
o Dismantling contract worth approx. GBP2.2m in Quebec
o GBP0.5m of major retail infrastructure works in the UK
-- Commencement of the Magnox framework contract with an initial order for works worth GBP3.2m
-- Streamlined Group structure, delivering operational
efficiencies and savings of GBP1.2m per annum
-- Order book up 105% to GBP219m at 31(st) October 2012 (31(st)
October 2011: GBP107m), GBP97m of which is scheduled to fall in
2013.
-- Current trading is in line with the Board's expectations and
current level of tendering activity is high
-- Q4 trading particularly strong with combined August and
September revenues of GBP24.8m (August and September 2011:
GBP11.6m).
Commenting on the results, Chairman Stuart Doughty said:
"This has been a transformational year for Silverdell. We have
acquired and are in the process of integrating EDS, secured
significant new contracts, and streamlined and strengthened our
management structure to give us an international platform for the
future.
"We have in place a sound strategy for growth supported by clear
and achievable KPIs. Our belief in the excellent long term
prospects for the Group is underlined by our recommendation of a
maiden dividend. Current trading is encouraging and our focus now
is on delivery. Mindful always of challenging global economic
conditions, we look forward to the future with confidence."
ENQUIRIES:
Silverdell Group PLC Tel: 020 7004 2741
Sean Nutley, Chief Executive
Ian Johnson, Finance Director
College Hill (Public Relations) Tel: 020 7457 2020
Mark Garraway
Helen Tarbet
finnCap (Broker & Nominated Advisor) Tel. 020 7220 0500
Marc Young/ Ben Thompson (Corporate
finance)
Simon Johnson/Victoria Bates (Corporate
broking)
CHAIRMAN'S STATEMENT
Overview
I am pleased to report a positive set of results for the year
ended 30th September 2012; a year which has seen Silverdell become
a specialist environmental support services group with global
reach. On 18th June 2012 we acquired decommissioning and
dismantling provider EDS Group Holdings Ltd ("EDS") for an initial
consideration of GBP15m funded by the issue of shares and a
successful share placing of GBP8.5m. At the same time we negotiated
new, extended banking facilities with HSBC. The acquisition of EDS
has given Silverdell immediate scale, global reach and a platform
from which to leverage significant future growth. The acquisition
has proved immediately earnings enhancing and the enlarged group
has already secured significant international contract wins with a
healthy pipeline of further opportunities.
Strategy
Alongside its traditional environmental services offering,
Silverdell is now a unique provider of end-to-end decommissioning,
dismantling and remediation services, with global reach, and a
particularly strong presence in the UK, Canada and Australia. These
markets have stringent legislation and regulation governing the
management and disposal of hazardous materials in both the heavy
industrial and the built environment, and this is the key driver
for our business. Our customers are predominantly blue-chip,
multinational groups operating in the power generation, chemical,
oil & gas, pharmaceutical, petrochemical and fuel industries as
well as large retailers and public sector organisations. They need
safe, compliant and highly specialised solutions for the
decommissioning of their industrial legacy, and Silverdell is one
of the few companies worldwide offering our particular suite of
services to deal with these often complex and dangerous legacy
assets.
As well as maximising the opportunities we have to offer a
broader range of services to our enhanced blue chip customer base,
we see further opportunities to expand our presence organically
further into Canada and Australia, and to develop new services such
as a discrete Consulting business in Canada. In the UK, in addition
to our asbestos remediation services, we are growing our capability
as a supplier of high hazard industrial maintenance and support
services to our existing client base within a number of framework
contracts. We also see exciting opportunities in Continental Europe
as various governments outline plans to decommission first and
second generation nuclear power stations and replace them with
conventional energy generation facilities. Further detail on our
growth plans is set out in the Chief Executive's Strategic
Review.
Economic conditions are challenging and are expected to remain
so, as clients increasingly seek more value for money from their
suppliers. Despite this, we are confident that our reputation for
excellence, coupled with the increasingly stringent regulatory and
legislative imperatives regarding the management and disposal of
hazardous materials, will continue to drive our business and
provide us with opportunities for growth.
Results
Revenues for the year ended 30 September 2012 were GBP82.5m
(2011: GBP59.7m) with adjusted EBITDA* of GBP6.2m (2011: GBP4.1m).
Operating profit was GBP1.3m and adjusted pre-tax profit** was
GBP4.3m (2011: GBP3.0m), impacted in part by the deferral of
certain shutdown and refurbishment works and by some lower margin
work undertaken in our Consulting division. As at 31st October 2012
the order book was GBP219m (31st October 2011: GBP107m), with
GBP97m scheduled to fall in 2013. Adjusted basic earnings per share
were 1.5 pence (2011: 1.4 pence). At the year end, the Company's
net senior debt was GBP4.5m (2011: GBP5.0m) with an additional
GBP6m (2011: GBP0.2m) of asset-backed finance. During the period we
re-financed the Group with a new, more competitive, three-year term
with HSBC, affording the Group reduced overall financing costs,
improved covenant terms and a global banking relationship.
Dividend
We are today recommending a maiden dividend of 0.175 pence per
share, which will be paid on 22 March 2013 to shareholders on the
register at the close of business on 13 March 2013 and is subject
to approval by shareholders at the Company's Annual General Meeting
which will be held on 7 March 2013. The Corresponding record date
for the dividend will be 15 March 2013.
Board & People
During the period under review we enhanced our Group structure
and management team to reflect the new size and scale of the
business and position it for further growth.
The Group structure now comprises three divisions: Remediation,
Decommissioning, including the EDS operations, and Consulting,
which we aim to grow into a global operation.
As a result of combining our two UK asbestos Remediation
businesses (Silverdell UK and Kitsons Environmental Europe) we now
have a single Remediation division, Silverdell, under a single
management team, delivering significant operational efficiencies
and savings of GBP1.2m per year.
Darren Palin, Managing Director of EDS Group, is now Managing
Director of our Decommissioning division and John Potts, who was
appointed in November 2011, is Managing Director of Silverdell,
whilst our Consulting division Redhills is led by Matt Griggs. All
three Managing Directors have an impressive depth and breadth of
knowledge and experience in their sectors and we are confident that
under their leadership, our divisions will continue to thrive.
We remain a direct employer of our workforce, ensuring that
their specialist skills are maintained and developed within the
business providing an excellent basis for the training and
development of future management, and enabling us to maintain our
licenses to operate. This helps the Group maintain its high
standards of quality and safety, protecting its own operating
license and the interests and reputation of its customers.
On behalf of the Board, I would like to express our gratitude to
everyone in the Group for their hard work, dedication and
commitment during the past year, without which our success would
not have been possible.
Summary
This has been a transformational year for Silverdell. We have
acquired and are in the process of integrating EDS, secured
significant new contracts, and streamlined and strengthened our
management structure to give us a platform for the future. We have
in place a sound strategy for growth supported by clear and
achievable KPIs. Our belief in the excellent long term prospects
for the Group is underlined by our recommendation of a maiden
dividend. Current trading is encouraging and our focus now is on
delivery. Mindful always of challenging global economic conditions,
we look forward to the future with confidence.
Stuart Doughty
Non-Executive Chairman
*Earnings before interest, tax, depreciation and amortisation
and also before impairment charges, share-based payments and
non-recurring items
** Adjusted to exclude intangibles amortisation, impairment
charges, non-recurring items and share-based payments
CHIEF EXECUTIVE'S STATEMENT
Overview
Silverdell operates in two distinct markets worldwide: the
general domestic refurbishment and construction related market and
the larger industrial support services market predominantly
involved in the power generation, chemical, oil & gas,
pharmaceutical, petrochemical and fuel sectors. All of these
require a high degree of regulatory control. The skills, processes
and, importantly, the highly complementary cultures that our
operating teams have developed in both our traditional and our
newly acquired businesses are well suited to the handling and
management of all types of hazardous materials and assets in a safe
and compliant manner.
Due to our proven track record of delivering services in
hazardous environments, we are a trusted and long-standing supplier
to multinational blue chip customers in these sectors, and now as
an enlarged Group we are able to provide a fully comprehensive
suite of decommissioning, dismantling and remediation services to
these customers around the world. Our focus is on growing the
business organically in our targeted global markets.
Performance against historic Strategic KPIs
30(th) September 2012 marked the end of our previous strategic
period. We have set out below the actual performance over that
period in relation to the key strategic objectives we set
ourselves.
Strategic KPI Achievement
-------------------------------- ----------------------------------------------
Grow order book ahead of 2009-12 non-acquired order book has grown
organic growth by GBP99m or 173%
-------------------------------- ----------------------------------------------
To drive organic revenue Underlying Remediation and Consulting
growth year on year ahead revenues have been held broadly flat
of market growth 2009-12. UK Construction industry declined
by 11.6% in 12 months to August 2012
(Source: ONS)
-------------------------------- ----------------------------------------------
To grow the EBITDA margin Achieved as a run-rate in Q4 2012 and
to 10% per 2013 consensus
-------------------------------- ----------------------------------------------
To maintain working capital Generally operated at over 4 weeks through
at not more than 1 month's the period due to customers demanding
revenue extended terms. As predicted, the beneficial
impact of the EDS acquisition meant that
at September 2012 group working capital
had fallen to 1 month's run-rate revenues.
-------------------------------- ----------------------------------------------
To grow the Consulting business Achieved prior to EDS acquisition. Consulting
to 15% of Group revenues revenues as a percentage of Group total
revenues in 2012 is 17%
-------------------------------- ----------------------------------------------
Strategic Review
Our strategic focus is on achieving organic growth in our
targeted global markets, underpinned by driving step changes in our
industry expertise and our culture. Specifically, we aim to grow
organically in the UK, Australia and Canada, by expanding further
into markets in which we have a strong presence or a foothold, and
by exporting proven business streams and services from one
geography into another.
Our strategy is called "Changing the Landscape", reflecting both
the transformation that Silverdell is undergoing as well as the
beneficial impact that our activities have on the built and natural
environments.
Our three particular areas of focus can be summarised as
follows:
1. Increasing our Capability: Growing our geographic and product
footprint organically, particularly in Canada and Australia,
through enhancing our management teams and operational scope to
drive commercial excellence and enable us to harness opportunities.
As a part of this we will focus on expanding our Consulting
offering in the UK, and aim to build organically a Consulting
offering in Canada.
2. Expanding our Knowledge: Continuing to improve our industry
knowledge and market intelligence both to enhance our competitive
edge and to anticipate and respond to the changing demands of our
customers. As part of this we are enhancing our business
identification systems and our tendering processes.
3. Enhancing our Culture: Through training, development and
enabling effective leadership, to develop a culture which fosters
innovation and initiative combined with the responsible, safe and
compliant approach for which we are known. We will continue to
streamline our businesses under a more unified brand structure to
establish a coherent position in the market place, ensuring minimal
operational overlap and maximising operational efficiency.
To help us demonstrate progress, we have set the following
medium term KPIs:
1. Achieve 15% year on year revenue growth
2. Achieve and maintain a robust and highly visible order book
totalling two years or more of revenues
3. Achieve sustainable 10% adjusted EBITDA margins
4. Achieve and maintain a progressive dividend policy
We will continue to update investors on our progress in meeting
our strategic goals and achieving our stated KPIs.
Operational Review
Divisional Revenue Split
Following the acquisition of EDS the Group now reports its
results in three strategic segments, Remediation, Consulting and
Decommissioning, with the latter comprising the EDS Group.
Remediation Decommissioning Consulting
2012 2011 2012 2011 2012 2011
Public Sector
Local Authorities
& Housing 17% 12% 0% 0% 13% 14%
Defence 18% 21% 0% 0% 6% 9%
Health & Education 12% 11% 0% 0% 14% 15%
47% 44% 0% 0% 33% 38%
Private Sector
Utilities, Power
& Industrial 29% 27% 100% 100% 14% 18%
Construction 8% 8% 0% 0% 2% 1%
Retail, Commercial
& Rail 16% 21% 0% 0% 51% 43%
53% 56% 100% 100% 67% 62%
100% 100% 100% 100% 100% 100%
In 2012 external Remediation revenues were GBP49.4m (2011:
GBP51.5m). Adjusted operating profit* margins in this segment were
5.7% (2011: 6.9%). Decommissioning activities (undertaken by EDS)
amounted to GBP18.9m in revenues in 2012 (2011: GBPnil) at
operating profit* margins of 11.4% (2011: nil).
Consulting has had a strong year, with the two acquisitions
completed in the second half of 2011 performing ahead of
expectations. External Consulting revenues were GBP14.3m (2011:
GBP8.2m), however included in this is GBP3m of sub-contract
revenues relating to managed refurbishment projects which are
typically lower margin and have served to dilute operating margins
overall. Accordingly, the operating profit* margin fell to 10.8%
(2011: 15.3%); stripping out sub-contract revenues, margins were
broadly maintained.
* Excluding amortisation, impairment charges, share-based
payments and non-recurring items.
Public Sector
There is a substantial asbestos legacy across the whole range of
the public sector property portfolio, including local government
buildings and social housing, schools, colleges and hospitals as
well as defence establishments. The public sector spend on
maintenance and refurbishment projects exceeds GBP20bn per year and
this is driven by regulatory requirements.
Total revenues from the Public Sector rose in the year by
GBP1.5m to GBP24.5m (2011: GBP23.0m) although as a percentage of
total revenues the proportion fell due to the much greater increase
in industrial revenues. The share of total Remediation revenues
generated by public sector work were 47% in 2012 (2011: 44%) whilst
the share of Consulting revenues was 33% (2011: 38%). Underlying
public sector revenues in Consulting increased by GBP1.4m in
absolute terms year on year despite comprising a lower percentage
of total Consulting revenues due to the additional volume of retail
work delivered through RDS, the specialist retail consultancy
acquired in August 2011.
Local Authorities and Housing
Local Authorities and Housing revenues comprised 17% of
Remediation revenues in 2012 (2011:12%). We work with a number of
Housing Authorities and Registered Social Landlords across the
United Kingdom to remove the asbestos legacy within their estate
portfolio.
However, with more significant revenue growth in other areas,
Local Authority revenues fell to 13% of our total Consulting
revenues (2011: 14%) despite an increase in absolute revenues of
GBP0.7m as we continued to win a number of large housing framework
contracts across the UK.
Defence
The Defence share of revenues for Remediation for the year was
18% (2011: 21%). During 2012 the Group undertook a lower volume of
work under the Regional Prime Contracts relationship for MoD
housing. This has been a long-standing relationship which has seen
the Group upgrade more than 190 MoD properties and over 7km of
insulated pipework in the last five years. We continue to develop
our relationship with the Atomic Weapons Establishment to whom we
now offer a number of services, in addition to asbestos
removal.
Consulting defence revenues represented 6% (2011: 9%) of the
total as revenues were flat year on year.
Health and Education
Health and Education comprised 12% (2011: 11%) of our total
Remediation revenues, with an absolute increase of GBP0.7m in
revenues in this sector. We have worked successfully with a number
of PCTs and Russell Group universities as they upgrade and
refurbish their campuses to meet the needs of today's patient and
student populations.
Health and Education work made up 14% of Consulting revenues
(2011: 15%) reflecting an additional GBP0.7m of revenues compared
to 2011. The Group won several projects with Russell Group
universities to provide survey and management services across their
entire university estates.
Private Sector
Utilities, Power and Industrial
EDS operates exclusively in this sector, working with a number
of multinational industrial customers in the oil and gas,
pharmaceutical and textile manufacturing, mining and commodities
sectors as well as in power generation and brewing. EDS has an
enviable track record in all of these sectors: it is the world's
leading refinery decommissioning specialist and is frequently
invited to new territories to undertake pioneering works in the
field of high hazard industrial decommissioning. During the year
EDS has commenced work in Adelaide, Australia on that country's
first oil refinery decommissioning project. We also commenced the
decommissioning of an ore production plant in Canada: this project
involves the decontamination of mercury, asbestos and hydrocarbon
hazards on a 380,000 sq ft site which will see over 50,000 tonnes
of steel recycled.
Utilities, Power and Industrial customers represented 29% of
Remediation segment revenues in 2012 (2011: 27%). Within our
traditional service offerings of asbestos, insulation and
scaffolding, we have secured a number of additional contracts this
year, including the provision of scaffolding support and thermal
insulation works at a gas terminal in the North West of England; a
significant shut-down contract at an oil refinery in South Wales
and the provision of specialist scaffolding support to a cement
manufacturer in the Midlands. The late starting contracts referred
to above, which impacted our Remediation revenues, included the
GBP304 million Magnox Framework Contract for nuclear
decommissioning, which Silverdell announced in November 2011 and
for which works were expected to commence during the Group's
financial year 2012. The Group is pleased to announce that it has
now received a GBP3.2m order for works to commence immediately at
the Magnox site at Chapelcross, with further works expected to
commence in 2013.
In our Consulting business, Utilities, Power and Industrial
customers contributed 14% (2011:18%) of total revenues, which
represents an increase in revenues in this sector of GBP0.6m year
on year. Our long-standing framework contract with a large water
utility in the North East is the mainstay of our industrial and
utilities work and our Utilities relationships during the year have
delivered resilient revenue streams. We continue to win a
significant amount of new business from Remediation customers in
this sector as a result of our strong relationships with customers
such as National Grid and Magnox.
Construction
Construction's share of total Remediation revenues in 2012 was
8% (2011:8%), with absolute revenues rising by GBP0.5m. The most
significant contract secured in this segment during the period was
a ground remediation contract for a large development site in
Staffordshire, which saw us dig out and remove over 3,500 tonnes of
contaminated soil. However, the outlook for the Construction sector
remains weak over the medium term.
Consulting's Construction share of total revenues was 2% (2011:
1%).
Retail, Commercial and Rail
This sector comprised 16% (2011: 21%) of Remediation revenues
and 51% of Consulting revenues (2011: 43%).
The Remediation business saw a number of retail contracts
deferred into FY 2013, as well as fewer rail infrastructure works.
The volume of insurance-related work has also declined as the
industry has altered the way it responds to household asbestos
claims. Nevertheless, Silverdell continues to have strong
relationships with all the major retailers and is considered a
market leader in the sector.
The retail, rail and commercial sector comprised 51% (2011: 43%)
of Consulting's total revenues which represents a year-on-year
increase in sales of GBP3.6m. We are now the leading provider of
asbestos consulting services to the retail sector with a customer
list that includes many household names and in addition, we are
performing increasing numbers of full service project management
contracts in which we oversee the entire asbestos element of store
refurbishment projects.
Current Trading and Outlook
This is a positive set of results which demonstrates the
robustness of our business model and our market leading positions.
Thanks to the dedication of its people and the support of its
shareholders, the Group has delivered significant growth, both
organically and by acquisition, and encouragingly, has ended the
year particularly strongly with combined August and September
revenues of GBP24.8m (August and September 2011: GBP11.6m). Current
trading is encouraging and in line with management's expectations
and we are in the process of tendering for several large contracts
in Australia, Canada, the UK and mainland Europe. Whilst remaining
mindful of challenging economic conditions, we believe we have the
scale, the momentum and the opportunity to grow strongly over the
next twelve months, and we look forward to the future with
confidence.
Sean Nutley
Chief Executive Officer
FINANCIAL REVIEW
Group turnover increased by 38% to GBP82.5m (2011: GBP59.7m),
primarily as a result of the acquisition of EDS Group Holdings Ltd
("EDS") at the end of the third quarter. EDS contributed GBP18.9m
in revenues while RDS, the Consulting acquisition completed in
early September 2011, recorded revenues of GBP4.7m. Overall the
incremental revenue effect of acquisitions in the year was
GBP23.6m. Gross profit was increased to GBP20.4m (2011: GBP16.0m**)
at a gross margin percentage of 24.7% (2011: 26.9%**). EDS gross
profit was GBP3.5m at a gross margin of 16.4%, which is the key
driver of the margin dilution experienced at the consolidated group
level. It should be noted that gross profit is now quoted including
plant and equipment depreciation, whereas previously depreciation
was wholly charged as an administrative cost. The incremental
effect of the Consulting acquisitions on 2011 gross profit was
GBP1.5m at an average gross margin of 31%.
Administrative expenses increased to GBP15.8m (2011:
GBP12.7m**). Administrative expenses as a percentage of revenue
were 19.1% (2011: 21.3%). Of the overall increase in administrative
costs of GBP3.1m, the incremental impact of the acquisition of EDS
was GBP0.9m. Adjusted operating profit* increased by GBP1.7m to
GBP4.8m (2011: GBP3.6m).
As a result of the EDS acquisitions, integration costs related
to the Consulting acquisitions and the integration of Silverdell UK
and Kitsons Environment Europe Limited into one operating entity,
we incurred additional non-recurring administrative expenses of
GBP2.2m (2011:GBP0.3m).
Finance charges were GBP0.8m (2011: GBP0.5m): the increase is
due to GBP0.3m of non-recurring finance costs relating to the legal
and break costs associated with the refinancing carried out in June
2012. Adjusted profit before tax* was up GBP1.3m at GBP4.3m (2011:
GBP3.0m). Statutory profit before tax decreased to GBP0.5m (2011:
GBP2.5m) as a result of the non-recurring charges and amortisation
of intangible assets arising from the EDS acquisition. The tax
charge for the year was GBP0.4m (2011: GBP0.8m). The effective
corporation tax rate is 81% (2011: 32%), the high rate reflecting
non-recurring disallowable expenses related to the EDS acquisition.
Adjusted profit after tax* was GBP3.2m (2011: GBP2.1m) and adjusted
earnings per share* was 1.5 pence (2011: 1.4 pence). Statutory
profit after tax was GBP0.1m (2011: GBP1.7m). The Directors are
recommending the payment of a maiden dividend of 0.175 pence per
share in March 2013. Net senior debt at 30 September 2012 was
GBP4.5m (2011: GBP5.0m). In addition, obligations under finance
leases amounted to GBP6.0m (2011:GBP0.2m) with gearing (including
finance leases) at 29% (2011: 22%). The net working capital cash
outflow was GBP3.0m (2011: GBP3.6m outflow). This arose as a result
of the volume growth, particularly during Q4 2012, which resulted
in trade receivables being disproportionately higher than at the
same point last year. We also have, included in receivables,
amounts recoverable under contracts of GBP3.2m which we expect to
recover during the first half of 2013. After the year-end, the
Group's term loan facility was extended by GBP2.5m to GBP5.5m, to
be used as additional working capital to support the recent
divestment contract win in Canada.
The order book grew substantially as a result of the EDS
acquisition and at 31 October 2012 stands at GBP219m (31 October
2011: GBP107m). Of this, GBP97m (2011: GBP36m) is scheduled to fall
in the next financial year.
We completed the acquisition of EDS in June 2012 for a total
consideration of GBP18.6m, which included GBP3.6m (before
discounting) of estimated contingent consideration. This
acquisition also included issuing a total of 132.4 m shares, which
comprised 80.1m shares to investors participating in the Placing in
June 2012 and 52.3m to the vendors of RDS as part of the total
consideration. As a result the number of issued, allotted and fully
paid up shares increased to end the year at 313.2m (2011:
180.8m).
* Adjusted to exclude intangibles amortisation, impairment
charges, non-recurring items and share-based payments
** As restated for the reclassification of certain depreciation
charges previously classified as administrative expenses
Ian Johnson
Chief Financial Officer
Consolidated Income Statement
For the year ended 30 September 2012
Before
non-recurring Non-recurring
items and items and
amortisation amortisation
(see Note (see Note
10) 10)
--------------- -------------- --------
2011
2012 2012 2012 (Restated)*
Notes GBP'000 GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 5 82,521 - 82,521 59,696
Cost of sales (62,138) - (62,138) (43,644)
Gross profit 20,383 - 20,383 16,052
Administrative expenses (15,815) - (15,815) (12,748)
----------------------------------------- ----- --------------- -------------- -------- ------------
* amortisation of intangible assets - (1,073) (1,073) (30)
* non-recurring expenses - (2,176) (2,176) (298)
Total administrative expenses (15,815) (3,249) (19,064) (13,076)
Operating profit 6 4,568 (3,249) 1,319 2,976
Finance costs 8 (504) (283) (787) (514)
Profit before tax 4,064 (3,532) 532 2,462
Income taxation charge 9 (1,138) 709 (429) (779)
Profit for the year 2,926 (2,823) 103 1,683
Earnings per share (Pence)
Basic earnings per ordinary
share 11 0.0 1.1
Diluted earnings per ordinary
share 11 0.0 1.0
* During 2012 the Directors decided to classify depreciation
charges on plant and machinery as Cost of Sales rather than
Administrative Expenses. The comparative figures for 2011 have been
reclassified to ensure consistency, with Cost of Sales for 2011
increasing and Administrative Expenses decreasing by
GBP280,000.
Consolidated statement of comprehensive
income 2012 2011
For the year ended 30th September 2012 GBP'000 GBP'000
Profit for the year 103 1,683
Other comprehensive income
Cash flow hedges:
* gain arising during the year - 40
* related tax charge - (10)
- 30
Foreign currency translation gain 6 -
Total comprehensive income for the year 109 1,713
Consolidated balance sheet
At 30 September 2012
2012 2011
Notes GBP'000 GBP'000
Assets
Non-current assets
Goodwill 12 26,420 17,761
Other intangible assets 13 7,216 453
Deferred tax asset 9 713 -
Property, plant and equipment 15 11,350 2,652
Trade and other receivables 18 1,724 1,001
47,423 21,867
Current assets
Inventories and work in progress 16 4,903 3,064
Trade and other receivables 18 34,646 17,305
Cash and cash equivalents 4,456 2,567
44,005 22,936
Total assets 91,428 44,803
Non-current liabilities
Borrowings 20 11,386 4,038
Trade and other payables 23 1,724 1,001
Contingent consideration 21 1,704 109
Deferred tax liabilities 9 1,884 221
16,698 5,369
Liabilities
Current liabilities
Borrowings 20 4,296 3,793
Trade and other payables 23 29,083 10,864
Other financial liabilities 17 - 31
Contingent consideration 21 1,643 326
Current tax liabilities 1,510 749
36,532 15,763
Total liabilities 53,230 21,132
Net assets 38,198 23,671
Equity
Share capital 24 3,132 1,808
Share premium account 15,283 2,456
Equity reserve 788 721
Hedging reserve - (22)
Foreign currency translation
reserve 6 -
Other reserve 4,135 4,135
Retained earnings 14,854 14,573
Total equity 38,198 23,671
These financial statements were approved by the Board of
Directors on 4 December 2012.
Signed on behalf of the Board of Directors:
Ian Johnson
Director
Consolidated statement of changes in equity
At 30 September 2011
Foreign
Share Share Other Equity Hedging Capital exchange Retained
capital premium reserve reserve reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1st October
2010 1,516 17,813 16,635 464 (52) 3,749 - (21,172) 18,953
Net profit
for year - - - - - - - 1,683 1,683
Other comprehensive
income - - - - 30 - - - 30
Total comprehensive
income for
the year - - - - 30 - - 1,683 1,713
Shares issued 292 2,456 - - - - - - 2,748
Capital cancellation* - (17,813) (12,500) - - (3,749) - 34,062 -
Share based
payment charge - - - 257 - - - - 257
At 1(st) October
2011 1,808 2,456 4,135 721 (22) - - 14,573 23,671
Net profit
for year - - - - - - - 103 103
Other comprehensive
income - - - - - - 6 - 6
Total comprehensive
income for
the year - - - - - - 6 103 109
Shares issued 1,324 13,236 - - - - - - 14,560
Expenses of
share issue - (409) - - - - - - (409)
Share based
payment charge - - - 267 - - - - 267
Transfers - - - (200) 22 - - 178 -
At 30th September
2012 3,132 15,283 4,135 788 - - 6 14,854 38,198
* Following special resolutions of the Company which were
confirmed by the High Court on 16(th) February 2011, the Company
cancelled the share premium account and capital reserve and also
cancelled GBP12.5m of deferred shares from the other reserve, which
increased retained earnings by a total of GBP34.1m.
The Other Reserve is non-distributable and represents the
remaining balance of the premiums arising on the issuance of
certain warrants and of shares issued in order to acquire Group
companies.
2012 2011
Notes GBP'000 GBP'000
Cash flows from operating activities
Profit for the year 103 1,683
Income taxation charge 9 429 779
Finance costs (net) 8 787 514
Amortisation of intangibles 13 1,073 30
Depreciation on property, plant
and equipment 15 1,364 525
Profit on disposal of property,
plant and equipment (73) (2)
Share based payments 26 267 257
Movements in working capital:
- Increase in inventories (1,219) (2,066)
- Increase in trade and other receivables (8,031) (3,599)
- Increase in trade and other payables 6,254 2,114
Cash generated from operations 954 235
Income tax paid (555) (628)
Net cash inflow / (outflow) from
operating activities 399 (393)
Cash flows from investing activities
Purchase of property, plant and
equipment (138) (656)
Proceeds from sale of property,
plant and equipment 375 17
Acquisition of subsidiaries (net
of cash acquired) (6,784) (1,348)
Net cash outflow from investing
activities (6,547) (1,987)
Cash flows from financing activities
Interest paid (630) (433)
Interest paid on finance leases (92) (6)
Payments for hire purchase contracts
principals (990) (53)
Proceeds from bank loans 3,737 -
Repayments of bank loans - (930)
Proceeds from issue of equity shares
(net) 8,401 2,198
Net cash inflow from financing activities 10,426 776
Net increase / (decrease) in cash
and cash equivalents 4,278 (1,604)
Cash and cash equivalents at the
beginning of the year (318) 1,286
Cash and cash equivalents at the
end of the year 3,960 (318)
Cash and cash equivalents comprises:
Cash at bank and in hand 19 4,456 2,567
Bank overdrafts 19 (496) (2,885)
3,960 (318)
Note to the financial statements
1. General information
Silverdell PLC is a company incorporated in Great Britain under
the Companies Act 2006. The address of the registered office is 20
Buckingham Street, London WC2N 6EF. The nature of the Group's
operations and its principal activities are set out in the
Directors' Report on pages 26 to 31.
2. Basis of preparation
The annual consolidated financial statements of the Group have
been prepared in accordance with International Reporting Standards
(IFRS) as adopted by the European Union (EU) (IFRS as adopted by
the EU).
Going Concern
As at 30(th) September 2012, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operation for the foreseeable future. Accordingly, they have
adopted the going concern basis in preparing these financial
statements.
3.1 Adoption of new and revised IFRS
The Group has adopted all new and amended standards and
interpretations effective for these financial statements. Their
adoption did not have a material impact on the amounts reported in
the financial statements, but could impact the accounting for
future transactions and arrangements. For those standards in issue
but not yet effective at the date of approval of these financial
statements, the Directors do not consider these will have a
material impact on the Group's future financial statements.
3.2 Accounting policies
Basis of accounting
The consolidated financial information has been prepared in
accordance with IFRSs adopted by the European Union and therefore
the Group financial statements comply with Article 4 of the EU IAS
Regulation.
The consolidated financial information has been prepared on the
historical cost basis except for the revaluation of certain
financial instruments measured at fair value. The principal
accounting policies adopted are set out below.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 30th September each year. Control is
achieved where the Company has the power to govern the financial
and operating policies of an investee entity so as to obtain
benefits from its activities.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used in
line with those used by the Group.
All intra-Group transactions, balances, income and expenses are
eliminated on consolidation.
Business combinations
The acquisition of subsidiaries is accounted for using the
purchase method. The cost of the acquisition is measured at the
aggregate of the fair values, at the date of exchange, of assets
given, liabilities incurred or assumed, and equity instruments
issued by the Group in exchange for control of the acquiree. The
acquiree's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3
are recognised at their fair value at the acquisition date.
Goodwill arising on acquisition is recognised as an asset and
initially measured at cost, being the excess of the cost of the
business combination over the Group's interest in the net fair
value of the identifiable assets, liabilities and contingent
liabilities recognised. If, after reassessment, the Group's
interest in the net fair value of the acquiree's identifiable
assets, liabilities and contingent liabilities exceeds the cost of
the business combination, the excess is recognised immediately in
profit or loss.
Separately identifiable intangible assets are recognised on
acquisition where appropriate and amortised over their useful
economic life.
Goodwill
Goodwill arising on consolidation represents the excess of the
cost of acquisition over the Group's interest in the fair value of
the identifiable assets and liabilities of a subsidiary at the date
of acquisition. Goodwill is initially recognised as an asset at
cost and is subsequently measured at cost less any accumulated
impairment losses. Goodwill which is recognised as an asset is
reviewed for impairment at least annually. Any impairment is
recognised immediately in profit or loss.
For the purpose of impairment testing, goodwill is allocated to
each of the Group's cash-generating units expected to benefit from
the synergies of the combination. Cash-generating units to which
goodwill has been allocated are tested for impairment annually, or
more frequently when there is an indication that the unit may be
impaired. If the recoverable amount of the cash-generating unit is
less than the carrying amount of the unit, the impairment loss is
allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit
pro-rata on the basis of the carrying amount of each asset in the
unit. An impairment loss recognised for goodwill is not reversed in
a subsequent period.
Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable and represents amounts receivable for
services provided in the normal course of business, net of
discounts, VAT and other sales-related taxes.
Profit is recognised on long-term contracts if the final outcome
can be assessed with reasonable certainty by including in the
income statement revenue and related costs as contract activity
progresses. Revenue is calculated by reference to the value of work
performed to date as a proportion of total contract value.
An accrued revenue asset is recognised where contract revenues
are expected to be recovered through the sale of metals or
production assets which have been made available for re-sale.
Leasing
Leases are classified as finance leases whenever the terms of
the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as
operating leases.
Assets held under finance leases are recognised as assets of the
Group at their fair value or, if lower, at the present value of the
minimum lease payments, each determined at the inception of the
lease.
The corresponding liability to the lessor is included in the
balance sheet as a finance lease obligation. Lease payments are
apportioned between finance charges and reduction of the lease
obligation so as to achieve a constant rate of interest on the
remaining balance of the liability. Finance charges are charged
directly against income.
Rentals payable under operating leases are charged to income on
a straight-line basis over the term of the relevant lease.
Benefits received and receivable as an incentive to enter into
an operating lease are also spread on a straight-line basis over
the lease term.
Borrowing costs
Borrowing costs are recognised in profit or loss in the period
in which they are incurred.
Retirement benefit costs
Payments to defined contribution retirement benefit schemes are
charged as an expense as they fall due.
Foreign currency
Transactions in foreign currencies are translated to the
respective functional currencies of Group entities at the foreign
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
balance sheet date are retranslated to the functional currency at
the foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognised in the income
statement. Non-monetary assets and liabilities that are measured in
terms of historical cost in a foreign currency are translated using
the exchange rate at the date of the transaction.
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on onsolidation, are
translated to the Group's presentational currency, Sterling, at
foreign exchange rates ruling at the balance sheet date. The
revenues and expenses of foreign operations are translated at an
average rate for the year where this rate approximates to the
foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from this translation of foreign
operations are reported as an item of other comprehensive income
and accumulated in the translation reserve.
Taxation
The tax expense represents the sum of the tax currently payable
and the movements in deferred tax.
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Group's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet
date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the tax
profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries, except where
the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will
not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised. Deferred tax is charged or credited in the income
statement, except when it relates to items charged or credited to
other comprehensive income, in which case the deferred tax is also
dealt with in other comprehensive income.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated
depreciation and any recognised impairment loss.
Depreciation is charged so as to write off the cost or valuation
of assets, other than land and assets under construction, over
their estimated useful lives, on the following bases:
Freehold property 4% on cost
Leasehold property 10% on cost
Plant and machinery 10% on cost
Office equipment 16.6%-25% on cost
Motor vehicles 25% on reducing balance
Assets held under finance leases are depreciated over their
expected useful lives on the same basis as owned assets or, where
shorter, over the term of the relevant lease.
The gain or loss arising on the disposal or retirement of an
asset is determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognised in
income.
Impairment of tangible and intangible assets excluding
goodwill
At each balance sheet date, the Group reviews the carrying
amounts of its tangible and intangible assets to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs. Recoverable amount is the higher of fair
value less costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows
have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately. Where an impairment loss subsequently reverses, the
carrying amount of the asset (cash-generating unit) is increased to
the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years. A reversal of
an impairment loss is recognised as income immediately.
Inventories and work in progress
Inventories are stated at the lower of cost and net realisable
value. Cost comprises direct materials and, where applicable direct
labour costs and those overheads that have been incurred in
bringing the inventories to their present location and condition.
Cost is calculated using the weighted average method. Net
realisable value represents the estimated selling price less all
estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
Work in progress on service contracts is stated at cost plus,
where the outcome can be assessed with reasonable certainty,
estimated profits attributable to the stage of completion less
provision for any expected losses and progress payments received on
account. Bid expenses on successful tenders are capitalised as work
in progress and written down over the contract term. Amounts
recoverable on long term service contracts, which are included in
trade and other receivables, are stated at the net sales value of
the work done less progress payments received on account. Excess
progress payments are included on trade and other payables.
Cumulative costs incurred, less amounts transferred to cost of
sales, less provision for contingencies and expected future losses
on service contracts, are included as long-term service contract
balances in inventories.
Financial instruments
Financial assets and financial liabilities are recognised in the
Group's balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
Financial instruments are classified into the following
categories: financial assets at fair value through profit and loss
"FVTPL" (held for trading), 'loans and receivables' at amortised
cost, financial liabilities - derivatives designated as cash flow
hedges, and financial liabilities at amortised cost.
The classification depends on the nature and purpose of the
financial instruments.
Trade and other receivables
Trade and other receivables are measured at initial recognition
at fair value. Appropriate allowances for estimated irrecoverable
amounts are recognised in profit or loss when there is objective
evidence that the asset is impaired. Also included in trade and
other receivables are accrued revenues arising on decommissioning
and divestment contracts where contract revenues are expected to be
realised in the form of metal or other second-hand assets made
available for re-sale.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value.
Financial liabilities and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the Group after deducting all of
its liabilities.
Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the
proceeds received, net of direct issue costs. Finance charges,
including premiums payable on settlement or redemption and direct
issue costs, are accounted for on an accrual basis in profit or
loss using the effective interest rate method and are added to the
carrying amount of the instrument to the extent that they are not
settled in the period in which they arise.
Trade payables
Trade payables are initially measured at fair value.
Derivative financial instruments and hedge accounting
The Group's activities expose it primarily to the financial risk
of changes in interest rates and foreign exchange rates. The Group
has used interest rate swap contracts to hedge its interest rate
exposure. The Group does not use derivative financial instruments
for speculative purposes.
The use of financial derivatives is governed by the Group's
policies approved by the Board of directors, which provide written
principles on the use of financial derivatives.
Changes in the fair value of derivative financial instruments
that are designated and effective as hedges of future cash flows
are recognised in other comprehensive income and the ineffective
portion is recognised immediately in the income statement. If the
cash flow hedge of a firm commitment or forecasted transaction
results in the recognition of an asset or a liability, then, at the
time the asset or liability is recognised, the associated gains or
losses on the derivative that had previously been recognised in
other comprehensive income are included in the initial measurement
of the asset or liability. For hedges that do not result in the
recognition of an asset or a liability, amounts deferred in other
comprehensive income are recognised in the income statement in the
same period in which the hedged item affects net profit or
loss.
Changes in the fair value of derivative financial instruments
that do not qualify for hedge accounting are classified as FVTPL
(held for trading), and the gains and losses are recognised in the
income statement as they arise. These are classified as held for
trading as they have not been hedge accounted, and have not been
"designated" as FVTPL.
Hedge accounting is discontinued when the hedging instrument
expires or is sold, terminated, or exercised, or no longer
qualifies for hedge accounting. At that time, any cumulative gain
or loss on the hedging instrument recognised in other comprehensive
income is retained there until the forecasted transaction occurs.
If a hedged transaction is no longer expected to occur, the net
cumulative gain or loss recognised in other comprehensive income is
transferred to the income statement for the period.
Investments
Investments in subsidiaries are stated at cost, less provision
for any impairment.
Provisions
Provisions are recognised when the Group has a present
obligation as a result of a past event, and it is probable that the
Group will be required to settle that obligation. Provisions are
measured at the Directors' best estimate of the expenditure
required to settle the obligation at the balance sheet date, and
are discounted to present value where the effect is material.
Share-based payments
The Group issues equity-settled share-based payments to certain
employees. Equity-settled share-based payments are measured at fair
value (excluding the effect of non market-based vesting conditions)
at the date of grant. The fair value determined at the grant date
of the equity-settled share-based payments is expensed on a
straight-line basis over the vesting period and is recognised as an
employee expense with a corresponding increase in equity, based on
the Group's estimate of shares that will eventually vest and
adjusted for the effect of non market-based vesting conditions.
Fair value is measured by use of the Black-Scholes model or the
binomial method as appropriate. The expected life used in the model
has been adjusted, based on management's best estimate, for the
effects of non-transferability, exercise restrictions, and
behavioural considerations.
Intangible assets
Customer relationships
Customer relationships are measured as the present value of cash
flows attributable to the relationship after deduction of
appropriate contributory assets charged. The relationship is
amortised over its expected useful life, typically three years.
Order book
Order book is the value of confirmed orders on the date of
acquisition after appropriate costs have been deducted. The order
book is amortised over the period in which it is expected to
unwind.
4. Critical accounting judgements and key sources of estimation uncertainty
The preparation of consolidated financial statements in
conformity with IFRS requires management to make judgements,
estimates and assumptions about the carrying amount of assets and
liabilities and the amount of income and revenue recognised in the
period. Actual results may differ from these estimates.
The key assumptions concerning the future, and other key sources
of estimation uncertainty at the balance sheet date, that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year,
are discussed below.
Revenue and profit/margin recognition
The Group's revenue recognition, turnover and long term
contracts policies are set out in the notes above. Management
exercises judgement to estimate the total expected contract costs
and determine the percentage of completion in order to recognise
the appropriate revenue and profit in the period. The assessment of
profitability and recognition is assessed on an ongoing basis,
which ensures adequate controls are in place that appropriate
amounts are calculated.
Recognition and measurement of intangible assets under IFRS 3
'Business Combinations'
In order to determine the value of the separately identifiable
intangible assets on the acquisition of a business combination,
management are required to make estimates on secured customer
contracts, other contracts and customer relationships and goodwill.
The Group engaged outside independent parties to perform these
calculations and determine the fair value and estimated useful
lives of these assets.
Impairment of goodwill and other intangible assets
There are a number of assumptions management have considered in
performing impairment reviews of goodwill and intangible assets.
Determining whether goodwill is impaired requires an estimation of
the value in use of the cash-generating units to which goodwill has
been allocated. The value in use calculation requires the Directors
to estimate the future cash flows expected to arise from the
cash-generating unit and a suitable discount rate in order to
calculate present value. Note 12 details the assumptions that have
been applied for goodwill.
5. Segmental information
Strategic segments
The Group has three reportable segments, as described below,
which are the Group's strategic divisions. The strategic divisions
offer different services and are managed separately because they
have some differences in their operational risks and business
models. For each of the strategic divisions, the Group's CEO (the
chief operating decision maker) reviews internal management reports
on at least a monthly basis. The following summary describes the
operations in each of the Group's reportable segments;
Remediation - provides services related to the direct
remediation and removal of environmental risks, the principal two
group companies in this segment being Silverdell UK and
Kitsons.
Decommissioning - provides decommissioning solutions, asset
recovery, demolition and dismantling services, the principal group
companies in this segment being Euro Dismantling Services Ltd and
its related companies in Canada and Australia.
Consulting - provides environmental survey, monitoring and
project management services, the principal company in this segment
being Redhill Analysts and its subsidiary RDS.
Information regarding the results of each reportable segment is
included below. Performance is measured based on segment profit
before tax as included in the internal management reports that are
reviewed by the Group's CEO. Segment profit is used to measure
performance as management believes such information is the most
relevant in evaluating the results of certain segments relative
to other entities that operate within these industries.
Remediation Decommissioning Consulting Unallocated Group
2012 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
For the year ended
30th September 2012
Revenue
Total revenue 51,243 18,852 14,594 - 84,689
Inter-segment revenue (1,833) - (335) - (2,168)
External revenue 49,410 18,852 14,259 - 82,521
Inter-segment revenue is charged at prevailing market
prices.
Remediation Decommissioning Consulting Unallocated Group
2012 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
For the year ended
30 September 2012
Result
Operating profit
before amortisation
and non-recurring
items 2,792 2,151 1,535 (1,910) 4,568
Intangible assets
amortisation - (912) (161) - (1,073)
Non-recurring administrative
expenses (699) (83) (190) (1,204) (2,176)
Non-recurring finance
costs - - (13) (270) (283)
Finance costs (net) (68) (73) (10) (353) (504)
Profit / (loss) before
tax 2,025 1,083 1,161 (3,737) 532
Taxation (353) (297) (94) 315 (429)
Profit / (loss)for
the year 1,672 786 1,067 (3,422) 103
At 30th September
2012
Balance sheet
Total assets 32,895 43,539 14,542 452 91,428
Total liabilities 12,557 24,177 3,146 13,350 53,230
Other information
Capital expenditure 967 2,131 229 39 3,366
Depreciation 554 599 180 31 1,364
Remediation Consulting Unallocated Group
2011 GBP'000 GBP'000 GBP'000 GBP'000
For the year ended 30th September
2011
Revenue
Total revenue 53,889 8,805 - 62,694
Inter-segment revenue (2,399) (599) - (2,998)
External revenue 51,490 8,206 - 59,696
Inter-segment revenue is charged at prevailing market
prices.
Remediation Consulting Unallocated Group
2011 GBP'000 GBP'000 GBP'000 GBP'000
For the year ended 30th September
2011
Result
Operating profit before amortisation
and non-recurring items 3,554 1,252 (1,502) 3,304
Intangible assets amortisation - (30) - (30)
Non-recurring expenses (24) (50) (224) (298)
Finance costs (17) (5) (492) (514)
Profit / (loss) before tax 3,513 1,167 (2,218) 2,462
Taxation (1,111) (369) 701 (779)
Profit / (loss) for the year 2,402 798 (1,517) 1,683
At 30th September 2011
Balance sheet
Total assets 32,206 12,446 151 44,803
Total liabilities 13,605 2,643 4,884 21,132
Other information
Capital expenditure 656 197 28 881
Depreciation 440 68 17 525
Unallocated costs relate principally to head office costs and
interest charges on bank borrowings of the Group's holding company.
Unallocated assets and liabilities represent the assets and
liabilities of the holding company, including bank borrowings.
Geographical segments
An analysis of the Group's 2012 results by geographical segment
is presented below. Substantially all the activities outside the
United Kingdom related to the Decommissioning strategic segment. In
2011 substantially all the Group's results arose in the United
Kingdom, so no geographical analysis was required.
United Kingdom Canada Australia Other Group
2012 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
For the year ended 30th
September 2012
Revenue
Total revenue 69,700 10,050 2,771 - 82,521
Inter-segment revenue - - - - -
External revenue 69,700 10,050 2,771 - 82,521
For the year ended 30th
September 2012
Result
Operating profit before
amortisation and non-recurring
items 2,764 1,657 147 - 4,568
Intangible assets amortisation (1,073) - - - (1,073)
Non-recurring administrative
expenses (2,149) (26) (1) - (2,176)
Non-recurring finance
costs (283) - - - (283)
Finance costs (net) (449) (31) (24) - (504)
(Loss) / profit before
tax (1,190) 1,600 122 - 532
Taxation 83 (473) (39) (429)
(Loss) / profit for the
year (1,107) 1,127 83 - 103
At 30th September
2012
Balance sheet
Total assets 82,835 7,050 1,396 147 91,428
Total liabilities 49,900 3,013 (184) 501 53,230
Other information
Capital expenditure 2,372 44 950 - 3,366
Depreciation 1,051 261 52 - 1,364
6. Operating profit
2012 2011
GBP'000 GBP'000
Operating profit is stated after charging/ (crediting):
Share based payment charge (see Note 26) 267 257
Amortisation of intangible assets (see Note 13) 1,073 30
Depreciation of:
- owned assets 889 450
- assets held under finance leases 475 75
Auditors' remuneration (see below) 145 87
Hire of plant and machinery 3,052 1,422
Operating lease rentals - land and buildings 640 574
Profit on disposal of fixed assets (73) (2)
2012 2011
Analysis of auditors' remuneration GBP'000 GBP'000
Audit services
- audit of Company's annual accounts 22 17
- audit of Company's subsidiaries, pursuant to
legislation 103 57
125 74
Other services
- other services relating to tax compliance 20 13
Auditors' remuneration 145 87
7. Staff costs including directors' remuneration
Directors' remuneration and transactions
Salary Benefits Performance Total emoluments Pension contributions Total Total
and fees GBP'000 bonus GBP'000 GBP'000 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000
Non-Executive
Directors:
Stuart Doughty 75 - 117 192 - 192 75
Mark Watts 30 - - 30 - 30 30
Executive
Directors:
Sean Nutley 242 3 - 245 81 326 262
Ian Johnson 208 3 - 211 61 272 221
Total 555 6 117 678 142 820 588
The whole of the bonus paid to Stuart Doughty in 2012, GBP70,000
(2011: GBPnil) of the pension contributions for Sean Nutley and
GBP42,000 (2011: GBPnil) of the pension contributions for Ian
Johnson were exclusively related to the successful completion of
the EDS acquisition and were wholly used to buy shares in the
Company in the associated placing. The Directors did not receive
any bonus in either year in respect of the Group's financial
performance.
The pension contributions disclosed above were all in respect of
money purchase arrangements.
Options over ordinary shares
The Directors' interests in share options are disclosed in the
Directors' report on pages 26 to 31.
Staff costs
2012 2011
Employees Number Number
Average number of persons (including Directors)
employed by the Group in the year:
Operational, sales and other 764 693
Administrative 225 167
989 860
The payroll costs in respect of the employees included in the
table above were:
2012 2011
GBP'000 GBP'000
Salaries and wages 37,300 29,944
Social security costs 3,671 3,167
Pension costs 458 284
Share based payment charge (Note
26) 267 257
41,696 33,652
Certain subsidiary undertakings of the Group operate defined
contribution pension schemes. The assets of the schemes are held
separately from those of the Group by independently administered
funds.
Remuneration of key management personnel
In accordance with IAS 24 Related Party Disclosures, key
management personnel are those persons having authority and
responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including any
Director (Executive and Non-Executive) of the Group.
The remuneration of these key personnel is set out below.
2012 2011
GBP'000 GBP'000
Short-term employee benefits 989 917
Post-employment benefits 166 77
Key management personnel comprise the members of the Board and
the Managing Directors of each of the Group's strategic segment
8. Finance costs (net)
2012 2011
GBP'000 GBP'000
Interest on bank overdrafts and loans 432 502
Bank interest receivable (20) -
Interest on obligations under finance leases 92 6
Non-recurring finance costs (see Note 10) 198 -
Finance charge on contingent consideration (see
Note 10) 85 6
Total finance costs (net) 787 514
9. Tax on profit on ordinary activities
Income tax recognised in profit or loss
2012 2011
GBP'000 GBP'000
Tax charge comprises:
United Kingdom corporation tax based on
the profit for the year 436 795
Overseas corporation tax 508 -
Adjustment in respect of previous years (146) (89)
Total current tax expense 798 706
Deferred tax income relating to the origination
and reversal of temporary differences (369) (24)
Adjustment in respect of previous years - 97
Total deferred tax (credit) / expense (369) 73
Total tax expense 429 779
The charge for the year can be reconciled to the profit per the
income statement as follows:
2012 2012 2011 2011
GBP'000 % GBP'000 %
Profit before tax 532 2,462
Income tax expense calculated at
the standard rate of 25% (2011:
27%) 133 25 665 27
Share based payment charge 67 13 25 1
Non-deductible expenses 288 54 81 4
Impact of overseas profits subject
to higher tax rates 87 16 - -
Prior year adjustment (146) (27) 8 -
Income tax charge recognised in
profit or loss 429 81 779 32
The Group's planned level of capital investment
is expected to remain at similar levels.
Therefore, it expects to be able to claim
allowances in excess of depreciation in
future years, at a similar level to the
current year.
The movement in deferred tax was as follows: Asset Liability
GBP'000 GBP'000
At 1st October 2010 - (15)
Charged to income statement - (73)
Charged to hedging reserve - (10)
Acquired with subsidiary undertakings - (123)
At 30th September 2011 - (221)
(Charged) / credited to income statement (3) 372
Acquired with subsidiary undertaking (see
Note 14) 716 (2,035)
At 30th September 2012 713 (1,884)
2012 2011
The deferred tax asset comprises: GBP'000 GBP'000
Unrelieved trading losses 477 -
Share-based payments 56 -
Other short-term timing differences 180 -
713 -
The deferred tax liability comprises:
Accelerated tax depreciation (3) (132)
Intangible assets (1,881) (123)
Other - 34
(1,884) (221)
There was a potential deferred tax asset of GBP550,000 (2011:
GBPnil) relating to tax losses carried forward. Management have
assessed the future recovery of the losses and do not consider
there to be sufficient probability of utilisation.
10. Non-recurring expenses and amortisation
Non-recurring items, impairments and amortisation are shown
separately on the face of the income statement in order to reflect
the Group's underlying financial performance. The items comprise
the following:
2012 2011
GBP'000 GBP'000
Amortisation of intangible assets (see Note
13) 1,073 30
Non-recurring expenses - administrative
expenses 2,176 298
Non-recurring expenses - finance costs 283 6
3,532 334
Related income tax credit (709) (89)
2,823 245
Administrative expenses
The non-recurring administrative expenses of GBP2,176,000 (2011:
GBP298,000) can be analysed further as follows.
Business acquisition costs of GBP1,275,000 (2011: GBP70,000)
comprise costs of the acquisition and subsequent integration of
subsidiary undertakings.
Internal restructuring costs of GBP832,000 (2011: GBP52,000)
represent severance, property and other costs incurred principally
in the reorganisation of the Group's Remediation segment.
Other non-recurring costs of GBP69,000 (2011: GBP68,000) were
incurred on overseas business development. In 2011 there were
additional non-recurring costs of GBP57,000 for corporate
rebranding and GBP51,000 of fees arising on the capital
restructuring.
Finance costs
Non-recurring finance costs of GBP198,000 (2011: GBPNil) arose
from the renegotiation of the Group's banking facilities during the
year. The finance charge arising on contingent consideration of
GBP85,000 (2011: GBP6,000) is also included here as it is an
acquisition-related cost.
11. 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 year, 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.
Adjusted basic earnings per share is calculated by dividing the
earnings attributed to ordinary shareholders, before intangible
assets amortisation, share-based payment charges, non-recurring
expenses and finance charges on deferred consideration, by the
weighted average number of ordinary shares during the year.
2012 2011
earnings Earnings
per share per share
basic diluted basic diluted
-------- ----------- ------- -------- ---------- -------
Earnings GBP'000 pence pence GBP'000 pence pence
Profit attributable to
ordinary shareholders 103 0.0 0.0 1,683 1.1 1.0
Non-recurring items,
impairments, amortisation
and share based payments 3,090 1.5 1.3 453 0.3 0.3
Profit for adjusted earnings
per share 3,193 1.5 1.3 2,136 1.4 1.3
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
2012 2011
No. No.
Weighted average number of ordinary shares
used in calculation of basic earnings per
share 218,557,295 155,663,646
Effect of dilutive potential ordinary shares:
Share options 14,310,730 2,087,492
Warrants held by Barclays Bank PLC 11,374,179 11,374,179
Weighted average number of ordinary shares
used in calculation of diluted earnings
per share 244,242,204 169,125,317
The weighted average number of ordinary shares for the basic
earnings per share differs from the closing number of shares at 30
September 2012 as a result of the issue of 132,374,193 new shares
on 18(th) June 2012 (see Note 24).
Details of all warrants are disclosed in Note 24. Only the
warrants held by Barclays Bank PLC are considered to be
anti-dilutive.
12. Goodwill
GBP'000
Cost
At 30th September 2010 35,611
Acquisition of A H Allen 478
Acquisition of RDS 1,127
At 30th September 2011 37,216
Acquisition of EDS (see Note 14) 8,659
At 30th September 2012 45,875
GBP'000
Accumulated impairment losses
At 30th September 2010, 30th September 2011 and
30th September 2012 (19,455)
Carrying amount
At 30th September 2012 26,420
At 30th September 2011 17,761
The carrying amount of goodwill relates to the Group's three
strategic business segments as follows:
2012 2011
GBP'000 GBP'000
Remediation 10,869 10,869
Decommissioning 8,659 -
Consulting 6,892 6,892
26,420 17,761
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 (CGU) which reflects how it is monitored for
internal management purposes. The recoverable amounts of the CGUs
are determined from value in use calculations. Value in use is
calculated using pre-tax cashflow projections based on the
financial budgets and business plans covering a three year period,
which take into account historical trends and market conditions,
which have been approved by the Board. The key assumptions for the
value in use calculations 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 CGUs,
equivalent to a real pre-tax discount rate which average 12% (2011:
12%). The growth rates are based on industry growth forecasts and
long-term growth in gross domestic product.
The Group prepares cash flow 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 1%. The rates do not exceed the
average long-term growth rate for the relevant markets. The rates
used to discount the cash flows in both 2012 and 2011 for all CGUs
have been based on the Group's adjusted weighted average cost of
capital, because the CGUs do not have significantly differing risk
profiles.
The Group's assumptions disclosed above in respect of the key
sensitive areas of future revenue growth and discount rate, are
considered to be sufficiently prudent to address any risk of
material mis-statement.
At 30th September 2012, goodwill was allocated to the
Remediation CGU (comprising Kitsons and Silverdell UK, the
Consulting CGU (comprising Redhills and RDS) and the
Decommissioning CGU (comprising the EDS Group).
As a result of impairment reviews in previous years, the
goodwill relating to these CGUs was reduced to its recoverable
amount by recognising accumulated impairment losses as follows:
GBP'000
Remediation 18,356
Consulting 1,099
19,455
13. Other intangible assets
Order Customer
Backlog Contracts Total
Cost
At 30th September 2010 1,480 5,434 6,914
Acquisition of A H Allen - 122 122
Acquisition of RDS - 361 361
At 30th September 2011 1,480 5,917 7,397
Acquisition of EDS (see Note 14) 6,184 1,652 7,836
At 30th September 2012 7,664 7,569 15,233
Accumulated amortisation
At 30th September 2010 1,480 5,434 6,914
Amortisation charge - 30 30
At 30th September 2011 1,480 5,464 6,944
Amortisation charge 802 271 1,073
At 30th September 2012 2,282 5,735 8,017
Carrying amount
At 30th September 2012 5,382 1,834 7,216
At 30th September 2011 - 453 453
All amortisation charges in the year have been included in
administrative expenses.
14. Acquisition
The Group acquired 100% of the issued share capital of EDS Group
Holdings Ltd ("EDS") on 18th June 2012. The fair values of the
assets and liabilities acquired are set out in the table below.
Fair value
Book value adjustments Fair value
GBP'000 GBP'000 GBP'000
Intangible assets - 7,836 7,836
Property, plant and equipment 7,144 - 7,144
Deferred tax asset 1,496 (780) 716
Inventories and work in progress 620 - 620
Trade and other receivables 9,214 725 9,939
Cash and cash equivalents 3,118 - 3,118
Trade and other payables (11,919) (759) (12,678)
Bank overdraft (1,189) - (1,189)
Current tax liabilities - (578) (578)
Finance lease obligations (3,512) - (3,512)
Deferred tax liabilities - (2,035) (2,035)
Net assets acquired 4,972 4,409 9,381
Consideration paid:
Cash payable 8,500
Shares issued to vendors 5,750
Contingent consideration - nominal amount 3,600
Consideration - discounting (560)
Loan note payable 750
Fair value of consideration 18,040
Goodwill arising 8,659
The fair value adjustments related to the recognition of
intangible assets on acquisition in respect of the order backlog
and key customer relationships, together with the related deferred
tax liabilities. Adjustments were also made to deferred taxation on
unrelieved trading losses, based on expected recoverability against
future profits. Further provision was made in other payables for
liabilities which are covered by indemnities from the vendors, with
a corresponding asset recognised in other receivables.
Details of the contingent consideration are provided in Note
21.
EDS contributed revenue of GBP18,852,000 and operating profit
before amortisation and non-recurring items of GBP2,151,000 to the
Group results in the year ended 30th September 2012. The results of
the EDS group represent the Decommissioning division in the
segmental analysis in Note 5.
If the acquisition has occurred on 1(st) October 2011,
management estimate that consolidated revenues would have been
GBP114.8m and consolidated losses would have been GBP1.5m. In
determining these amounts, management have assumed that the fair
value adjustments determined provisionally that arose on the
acquisition date would have been the same if the acquisition had
occurred on 1(st) October 2011.
15. Property, plant and equipment
Freehold
and leasehold Plant and
property Motor vehicles Office equipment machinery Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1st October 2010 689 784 932 2,989 5,394
Additions 19 156 107 599 881
Acquisitions 219 18 - 77 314
Disposals - (281) - - (281)
At 30 September2011 927 677 1,039 3,665 6,308
Additions 1 88 187 3,090 3,366
Acquisitions (see Note 14) - 448 32 6,664 7,144
Disposals - (19) (47) (941) (1,007)
At 30th September 2012 928 1,194 1,211 12,478 15,811
Accumulated depreciation
At 1st October 2010 146 615 746 1,888 3,395
Depreciation charge for the
year 21 99 56 349 525
Disposals - (264) - - (264)
At 30th September 2011 167 450 802 2,237 3,656
Depreciation charge for the
year 31 182 152 999 1,364
Disposals - (19) (45) (495) (559)
At 30th September 2012 198 613 909 2,741 4,461
Carrying amount
At 30th September 2012 730 581 302 9,737 11,350
At 30th September 2011 760 227 237 1,428 2,652
The net book value of assets held under finance leases is
GBP6,457,000 (2011: GBP372,000).
The book value of freehold land not depreciated is GBP269,000
(2011: GBP269,000).
16. Inventories
2012 2011
GBP'000 GBP'000
Raw materials and consumables 152 220
Work in progress 4,239 2,844
Finished goods 512 -
4,903 3,064
The cost of inventories recognised as an expense and included in
'cost of sales' amounted to GBP3,912,000 (2011: GBP4,300,000),
which represents the purchase of materials used in the delivery of
services to customers. The Directors consider that the carrying
amount of inventories approximates to their fair value.
17. Derivative financial liabilities
2012 2011
GBP'000 GBP'000
Interest rate swaps - 31
The interest rate swap was terminated during 2012. The notional
principal amount of the outstanding interest rate swap contracts at
30th September 2011 was GBP2,250,000. At 30th September 2011,
GBP1,500,000 was subject to a fixed interest rate of 2.1% and
GBP750,000 was subject to a fixed interest rate of 5.8%. The main
floating rates were GBP LIBOR.
18. Trade and other receivables
2012 2011
GBP'000 GBP'000
Non-current
Other receivables (see Note 23) 1,724 1,001
Total Non-Current 1,724 1,001
Current
Trade receivables 17,445 13,401
Less: provision for impairment (see
Note 22c ) (543) (226)
Trade receivables net 16,902 13,175
Prepayments and accrued income 17,340 1,482
Due from customers for contract
work 404 2,648
Total Current 34,646 17,305
Total 36,370 18,306
The average credit period taken on sales is 40 days (2011: 67
days). The Group has different provision policies for its various
divisions which have been determined by reference to past default
experience and specific provisions are raised after taking an
individual view to the debtor's recoverability.
Due to the nature of the Group's operations, it is common
practice for customers to hold retentions in respect of contracts
completed. Retentions held by customers as at 30th September 2012
were GBP682,000 (2011: GBP646,000).The Group's exposure to credit
risk and impairment losses related to trade and other receivables
are disclosed in Note 22.
Under the normal course of the business, the Group does not
charge interest on its overdue receivables. The Directors consider
that the carrying amount of trade and other receivables
approximates to their fair value.
Included in trade and other receivables are costs incurred in
respect of a significant customer contract totalling GBP3.2m (2011:
GBP2.9m). The Group is in the process of validating and negotiating
its final account with the main contractor. The opinion of the
Directors is that as negotiations are at an advanced stage no
provision is required against this debtor.
19. Analysis of net debt position
2011 Cash flow Other non-cash changes 2012
GBP'000 GBP'000 GBP'000 GBP'000
Cash at bank and in hand 2,567 (1,229) 3,118 4,456
Bank loans (4,713) (3,737) - (8,450)
Bank overdraft (2,885) 3,578 (1,189) (496)
Obligations under finance lease contracts (233) 990 (6,743) (5,986)
Loan notes - - (750) (750)
(5,264) (398) (5,564) (11,226)
The Group's exposure to interest rate risks and foreign exchange
risk and a sensitivity analysis for financial assets and
liabilities is disclosed in Note 22.
20. Borrowings
2012 2011
GBP'000 GBP'000
Non-current
Bank loans 7,550 3,913
Obligations under finance lease
contracts 3,086 125
Loan notes 750 -
11,386 4,038
Current
Bank loans and overdrafts 1,396 3,685
Obligations under finance lease
contracts 2,900 108
4,296 3,793
Total 15,682 7,831
Further information on the maturity of the Group's borrowings is
set out in Note 22.
The Group's bank overdraft and loan facilities are secured by
debentures over the assets of the Group. The debenture agreement
includes a fixed and floating charge over the assets of the Group.
Finance lease liabilities are secured on the assets to which the
contracts relate.
The bank loans at 30th September 2012 comprise a term loan of
GBP3,000,000 and a revolving credit facility of GBP5,450,000. The
term loan is repayable by regular quarterly instalments of
GBP225,000 with the final quarterly instalment plus a terminal
payment of GBP750,000 payable in June 2015. Both the term loan and
the revolving facility expire in June 2015. The bank loans are at
variable rates of interest based on LIBOR. In the prior year, the
Group's bank borrowings were partially covered by hedging, with
GBP750,000 subject to an interest rate swap and GBP1,477,500
subject to an interest rate cap. These hedging arrangements were
discontinued during the year when the Group refinanced its
borrowings as the new variable rates of interest were substantially
lower and the new facilities have no requirement for interest rate
hedging. The net overdraft facility available as at 30th September
2012 was GBP1,000,000 (2011: GBP2,750,000) and the headroom
available at the year-end was GBP3,927,000 (2011: GBP2,432,000).
There were no other unutilised borrowing facilities.
The loan notes were issued to the vendors of EDS as part of the
consideration for the acquisition of that company. They bear
interest at a fixed rate of 8.5% per annum and are repayable in
full in 2015.
The non-current obligations under finance leases are all
repayable between one and five years. The present value of future
minimum lease payments is not materially different from the
carrying amounts of the obligations under finance leases.
21. Contingent consideration
2012 2011
GBP'000 GBP'000
Non-current 1,704 109
Current 1,643 326
Total 3,347 435
The contingent consideration relates to the acquisitions of AH
Allen and RDS in 2011 and EDS in 2012 (see Note 14). These
acquisitions provide for contingent consideration to become payable
based on the performance of the businesses in the two years
immediately following acquisition by the Group, with Gross Profit
and Earnings Before Interest Tax Depreciation and Amortisation
being the key target measures. These amount have been discounted
from the respective acquisition dates. Since the dates of
acquisition the discounts have unwound and will continue to unwind
for the following two years.
22. Financial instruments
(a) Financial risk management
All companies are exposed to capital and market risk, but the
Board considers the Group's key elements of financial risk to
be:
-- Credit risk
-- Liquidity risk
-- Interest rate risk
-- Foreign currency risk
This note presents information about the Group's exposure to
each of the above risks, the Group's management of capital, and the
Group's objectives, policies and procedures for measuring and
managing risk.
Capital risk management
The Board is responsible for overall Group strategy, acquisition
and divestment policy, approval of major capital expenditure
projects and consideration of significant financing matters. The
Board manages its capital to ensure that entities in the Group will
be able to continue as a going concern while maximising the return
to stakeholders as well as sustaining the future development of the
business. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to
reduce debt.
The capital structure of the Group consists of debt, which
includes the borrowings disclosed in Note 20, cash and cash
equivalents and equity attributable to equity holders of the
parent, comprising issued capital, reserves and retained earnings
as set out in the Statement of Changes in Equity.
Market risk
Market risk is the risk that changes in the market prices, such
as foreign exchange rates and interest rates, will affect the
Group's income or the value of its holdings of financial
instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters,
while optimising the return on risk.
The Group's activities expose it mainly to the financial risks
of changes in interest rates. The Board reviews and agrees the
policy for managing interest rate risk and foreign currency risk
and the potential impact of any significant economic changes are
discussed at monthly Board meetings.
The Group reviews its treasury position daily, placing any
surplus cash on short-term deposits.
(b) Categories of financial instruments
Details of the significant accounting policies and methods
adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are
recognised in respect of each class of financial asset, financial
liability and equity instrument are disclosed in Note 3 to the
financial statements.
2012 2011
GBP'000 GBP'000
Financial assets(1)
At amortised cost:
Loans and receivables 16,902 13,175
Cash and cash equivalents 4,456 2,567
Total financial assets 21,358 15,742
(1) Financial assets exclude prepayments, amounts due under
long-term contracts, other receivables and other non-current
receivables.
2012 2011
GBP'000 GBP'000
Financial liabilities(2)
At amortised cost:
Trade and other payables 21,685 8,766
Obligations under finance leases 5,986 233
Other borrowings and overdrafts 9,696 7,598
Contingent consideration 3,347 435
Derivatives - designated as cash
flow hedges - 31
Total financial liabilities 40,714 17,063
(2) Financial liabilities exclude tax and social security,
deferred income and other non-current payables.
(c) Credit risk
The Group's principal financial assets are cash and cash
equivalents and trade receivables, which represent the Group's
maximum exposure to credit risk in relation to financial
assets.
The Group's credit risk is primarily attributable to its trade
receivables. The amounts presented in the consolidated balance
sheet are net of allowances for doubtful receivables, estimated by
the Group's management based on prior experience and their
assessment of the current economic environment.
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Group. The Group has adopted a policy of only dealing with
creditworthy counterparties as a means of mitigating the risk of
financial loss from defaults.
The carrying amount of financial assets recorded in the
financial statements, which is net of impairment losses, represents
the Group's maximum exposure to credit risk.
The Group's exposure and the credit ratings of its
counterparties are continuously monitored and the aggregate value
of transactions concluded is spread amongst approved financial
institutions.
Trade receivables
Trade receivables consist of a large number of customers, spread
across diverse areas within the UK and the Group's exposure to
credit risk is influenced mainly by the individual characteristics
of each customer. The demographics of the Group's customer base,
including default risk of the industry and country, in which the
customers operate, has less of an influence on credit risk.
The Directors consider that the carrying amount of trade
receivables, which are non-interest bearing, approximates to their
fair value.
The Group does not have any significant credit risk exposure to
any single counterparty or any Group of counterparties having
similar characteristics. The Group defines counterparties as
having
similar characteristics if they are related entities.
Before accepting any new customer, the Group runs credit checks
to assess the potential customer's credit quality. The Group
monitors exposure to individual clients and all customers are
subject to standard terms of payment for each division which are,
on average, 30 days.
The analysis of trade receivables in excess of 30 days old but
not impaired is as follows:
2012 2011
GBP'000 GBP'000
31 - 60 days 5,855 3,084
61 - 90 days 1,229 1,176
91-120 days 603 517
More than 120 days 646 1,200
8,333 5,977
=========
======== ============
The above analysis split by business segment is set out
below:
At 30th September 2012
Remediation Decommissioning Consulting Total
2012 2012 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
31 - 60 days 2,895 1,038 1,922 5,855
61 - 90 days 767 39 423 1,229
91-120 days 244 188 171 603
More than 120 days 472 66 108 646
4,378 1,331 2,624 8,333
At 30th September 2011
Remediation Decommissioning Consulting Total
2011 2011 2011 2011
GBP'000 GBP'000 GBP'000 GBP'000
31 - 60 days 2,135 - 949 3,084
61 - 90 days 843 - 333 1,176
91-120 days 390 - 127 517
More than 120 days 772 - 428 1,200
4,140 - 1,837 5,977
The analysis split by geographical segment is set out below.
At 30th September 2012
United Kingdom Canada Australia Total
2012 2012 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
31 - 60 days 4,661 965 229 5,855
61 - 90 days 1,176 53 - 1,229
91-120 days 577 26 - 603
More than 120 days 594 52 - 646
7,008 1,096 229 8,333
At 30th September 2011
United Kingdom Canada Australia Total
2012 2012 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
31 - 60 days 3,084 - - 3,084
61 - 90 days 1,176 - - 1,176
91-120 days 517 - - 517
More than 120 days 1,200 - - 1,200
5,977 - - 5,977
The Group establishes an allowance for impairment that
represents its estimate of incurred losses in respect of trade and
other receivables and investments when there is objective evidence
that the asset is impaired. The main components of this allowance
are a specific loss component that relates to individually
significant exposures, and a collective loss component established
for groups of similar assets in respect of losses that have been
incurred but not yet identified. The collective loss allowance is
determined by references to past default experience and historical
data of payment statistics for similar financial assets.
Movement in the provision for impairment:
2012 2011
GBP'000 GBP'000
Balance at beginning of the year 226 243
Increase / (decrease) in impairment provision
recognised 93 (11)
Acquired with subsidiary undertakings 336 135
Receivables written back (112) (141)
543 226
The creation and release of provisions for impaired receivables
has been included in 'administrative expenses' in the income
statement.
In determining the recoverability of a trade receivable, the
Group considers any change in the credit quality of the trade
receivable from the date credit was initially granted up to the
reporting date. The concentration of credit risk is limited due to
the customer base being large and unrelated. Accordingly, the
Directors believe that there is no further credit provision
required in excess of the above amount.
(d) Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. Responsibility for
liquidity risk management rests with the Board of Directors. The
Group manages liquidity risk by maintaining adequate reserves,
banking facilities and reserve borrowing facilities, by
continuously monitoring bank covenant compliance, forecast and
actual cash flows and matching the maturity profiles of financial
assets and liabilities. Details of additional undrawn facilities
that the Group has at its disposal to further reduce liquidity risk
are disclosed in Note 20.
Liquidity and interest risk tables
The following tables detail the Group's expected maturity for
its financial assets and liabilities. The tables below have been
drawn up based on the undiscounted contractual maturities of the
financial assets and liabilities. No material interest is expected
to accrue on the interest bearing assets, which represent cash
deposits.
Book Undiscounted Cashflows
Value
--------- -------------------------------------------------------------------------
30th September 2012 Less 1 - 3 3 months 1-5 years 5 + Total
than monthsGBP'000 to 1 year GBP'000 years GBP'000
GBP'000 1 month GBP'000 GBP'000
GBP'000
Financial assets
Non-interest bearing 16,902 16,902 - - - - 16,902
Variable interest
rate instruments 4,456 4,456 - - - - 4,456
21,358 21,358 - - - - 21,358
Financial liabilities
Non-interest bearing 25,032 21,749 - 1,579 1,704 - 25,032
Variable interest
rate instruments 15,682 738 950 2,608 11,386 - 15,682
40,714 22,487 950 4,187 13,090 - 40,714
Less 1 - 3 3 months 1 - 5 5 + Total
30th September 2011 GBP'000 than monthsGBP'000 to 1 year years years GBP'000
1 month GBP'000 GBP'000 GBP'000
GBP'000
Financial assets
Non-interest bearing 13,175 13,175 - - - - 13,175
Variable interest
rate instruments 2,567 2,567 - - - - 2,567
_____
--------- --------- --------------- ----------- ---------- --------- ---------
15,742 15,742 - - - - 15,742
_____
--------- --------- --------------- ----------- ---------- --------- ---------
Financial liabilities
Non-interest bearing 9,232 8,797 - 326 109 - 9,232
Variable interest
rate instruments 7,831 2,894 227 672 4,038 - 7,831
17,063 11,691 227 998 4,147 - 17,063
(e) Interest rate risk
Interest rate risk is the risk that the value of a financial
instrument or cash flows associated with the instrument, will
fluctuate due to changes in market interest rates. As the Group has
no significant interest-bearing assets, the Group's income and
operating cash flows are substantially independent of changes in
market interest rates.
The Group is exposed to interest rate risk primarily though
borrowing funds at floating interest rates. Borrowings issued at
variable rates expose the Group to cash flow interest rate risk.
The Group manages interest rate risk on borrowings by ensuring
access to diverse funding and through monitoring interest rate
movements with weekly reports.
Interest rate risk is reviewed on a regular basis and if
considered necessary a strategy to minimise any potential risk
through interest rate swaps will be discussed and implemented.
The Group's exposures to interest rates on financial assets and
financial liabilities are detailed below.
Interest rate sensitivity analysis
If interest rates had been 100 basis points higher or lower and
all other variables were held constant, the Group's profit for the
year would increase or decrease by GBP157,000 (2011: GBP45,000) in
respect to exposure to the Group's borrowings and cash and cash
equivalents. For floating rate liabilities the analysis is prepared
assuming the amount of the liability at the balance sheet date was
outstanding for the whole period.
(f) Foreign currency risk
The Group's exposure to foreign currency risk at 30(th)
September 2012 is as follows. This is based on the carrying amount
for monetary financial instruments.
Canadian Australian US Argentine
Dollar Dollar Dollar Peso Sterling Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Trade receivables 1,530 229 - - 15,143 16,902
Cash and cash equivalents 1,337 116 67 62 2,874 4,456
Obligations under
finance lease contracts (2,844) (853) - - (2,289) (5,986)
Trade and other payables (4,198) (1,833) - - (15,654) (21,685)
Other borrowings
and overdrafts - - - - (9,696) (9,696)
Contingent consideration - - - - (3,347) (3,347)
Net exposure (4,175) (2,341) 67 62 (12,969) (19,356)
All exposures detailed above relate to EDS which was acquired
during 2012. There was no significant foreign currency risk
exposure at 30(th) September 2011.
The following significant exchange rates were applied during the
year ended 30th September 2012:
Reporting
date
Average rate spot rate
Canadian Dollar 1.59 1.59
Australian Dollar 1.54 1.55
US Dollar - 1.62
Argentine Peso - 7.58
A strengthening / (weakening) of the Canadian Dollar, Australian
Dollar, US Dollar and Argentinian Peso against all other currencies
at 30th September 2012 would have affected the measurement of
financial instruments denominated in foreign currency and increased
/ (decreased) equity and profit or loss by the amounts shown below.
This analysis is based on foreign currency exchange rate variances
that the Group considered to be reasonably possible at the end of
the reporting period. The analysis assumes that all other
variables, in particular interest rates, remains constant and
ignores any impact of forecast sales and purchases.
Profit or
Equity loss
Strengthening Weakening Strengthening Weakening
At 30th September 2012 GBP'000 GBP'000 GBP'000 GBP'000
Canadian Dollar (10%
movement) (837) 837 110 (110)
Australian Dollar (10%
movement) (440) 440 9 (9)
US Dollar (10% movement) 7 (7) - -
Argentine Peso (10%
movement) 6 (6) - -
(g) Fair value of financial instruments
The fair value of interest rate swaps is calculated at the
present value of the estimated future cash flows.
The Directors consider that the carrying amounts of financial
assets and financial liabilities recorded at amortised cost in the
financial statements approximate to their fair values due to the
short maturity of the instruments or because they bear interest at
rates approximate to the market.
23. Trade and other payables
2012 2011
GBP'000 GBP'000
Non-current
Other payables 1,724 1,001
In 2006, the Group recorded a provision of GBP1.0m in respect of
a liability arising on the acquisition of Silverdell UK. The Group
has a corresponding asset relating to the indemnities from the
vendors of Silverdell UK in respect of this provision. A similar
potential liability of GBP0.7m was recorded in 2012 arising on the
acquisition of EDS, with the corresponding indemnification asset
included within non-current trade and other receivables. These
non-current other payables relate to pre-acquisition taxation
matters.
2012 2011
GBP'000 GBP'000
Current
Trade payables 14,189 6,031
Other taxation and social security 6,066 2,098
Other payables 7,496 2,735
Payments received in account 1,332 -
29,083 10,864
An analysis of the maturity of debt is given in Note 22(d).
The Directors consider that the carrying amount of trade
payables approximates to their fair value.
The Group's policy is to fix payment terms when agreeing the
terms of each transaction. It is the Group's general policy to pay
suppliers according to the agreed terms and conditions, provided
that the supplier has complied with those terms.
Trade creditors and accruals principally comprise amounts
outstanding for trade purchases and ongoing cost and they include
retention amounts held over defect liability periods. The average
credit period taken for trade purchases is 67 days (2011: 69 days)
for the Group. The Group has financial risk management policies in
place to ensure that all payables are paid within the credit
timeframe.
There are no suppliers who represent more than 10% of the total
balance of trade creditors in either 2012 or 2011.
The Group has financial risk management policies in place to
ensure that all payables are paid within the credit timeframe.
Therefore, under the normal course of business, the Group is not
charged interest on overdue payables.
24. Share capital
2012 2011
No. GBP'000 No. GBP'000
Allotted, called up and fully
paid
Ordinary shares of 1p each 313,213,910 3,132 180,839,717 1,808
Movement in issued share capital
At 1st October - 1p ordinary
shares 180,839,717 1,808 151,654,717 1,516
Shares issued in the year 132,374,193 1,324 29,185,000 292
At 30th September 313,213,910 3,132 180,839,717 1,808
On 18 June 2012 the Company issued 52,272,727 new shares to the
vendors of EDS as part of the consideration for that acquisition.
The price paid was 11.0p per share, providing consideration of
GBP5,750,000 and giving rise to a share premium of GBP5,227,000. On
the same date and at the same price 80,101,466 new shares were
issued as part of placing. The placing yielded consideration of
GBP8,811,000 and gave rise to a share premium of GBP8,010,000
before expenses.
Barclays Bank PLC holds 11,374,179 (2011: 11,374,179) warrants
valid until 2017 to subscribe for ordinary shares in the Company at
5p (2011: 5p) per ordinary share. Marwyn Neptune Fund LP holds
warrants valid until 2013 to acquire up to 3,220,105 (2011:
3,220,105) ordinary shares in the Company at 75p (2011: 75p) per
ordinary share. Details of options over the Company's share capital
are disclosed in Note 26.
25. Other financial commitments
Capital commitments
At 30th September 2012, the Group had capital commitments for
capital expenditure contracted for but not provided totalling
GBP2,671,000 (2011:GBPNil).
Operating lease commitments
The Group had outstanding total commitments under
non-cancellable operating leases at 30th September which fall due
as follows:
2012 2011
Land and Land and
buildings Other buildings Other
GBP'000 GBP'000 GBP'000 GBP'000
Within one year 914 956 331 715
Within two to five years 1,970 500 730 734
After five years 322 - 159 2
3,206 1,456 1,220 1,451
26. Employee share schemes
The Group has adopted share incentive arrangement plans as set
out below.
Equity-settled share option scheme
The Group has a share option scheme for certain employees of the
Group. Options are exercisable at a price equal to the average
quoted market price of the Company's shares on the date of grant.
The vesting period is three years. If the options remain
unexercised after a period of five years from the date of grant,
the options expire. Options are forfeited if the employee leaves
the Group before the options vest.
Details of the share options outstanding during the year are as
follows:
2012 2011
Weighted Weighted
average average
exercise Number exercise
Number of price of share price
share options GBP options GBP
Outstanding at beginning of year 15,056,266 0.090 13,225,247 0.087
Granted during the year 10,000,000 0.120 2,190,190 0.115
Forfeited during the year (1,283,854) (0.090) (359,171) (0.090)
Lapsed during the year (4,800,000) (0.090) - -
Outstanding at the end of the
year 18,972,412 0.100 15,056,266 0.090
Exercisable at the end of the
year 6,782,221 0.090 - -
The options outstanding at 30th September 2012 had a weighted
average remaining contractual life of 9.0 years (2011: 8 years). In
2012, options over 10,000,000 shares were granted on 30th September
2012. The aggregate of the estimated fair values of the options
granted on that date is GBP724,000.
All the options outstanding at 30th September 2012 have non
market-based performance conditions, being dependent on the
Company's future adjusted earnings per share.
The inputs into the valuation models used for options granted
each year are as follows:
2012 2011
Weighted average share price GBP0.131 GBP0.105
Weighted average exercise price GBP0.120 GBP0.115
Expected volatility 70% 77%
Expected life 6 years 6.5 years
Risk-free rate 0.94% 3.50%
Expected dividend yield 2% 0%
Expected volatility was determined by calculating the historical
volatility of the Group's share price over the previous 1.5 years.
The expected life used in the model has been adjusted, based on
management's best estimate, for the effects of non-transferability,
exercise restrictions, and behavioural considerations. The risk
free rate of return is the yield on zero coupon UK government bonds
with a term similar to the expected life of the option.
The charge in the income statement relating to the above
share-based payments was GBP267,000 (2011: GBP257,000).
27. Contingent liabilities
There are Group cross guarantees from the Company for all monies
due to certain of the Group's banks and surety lenders. The total
potential exposure to the Group's banks under such guarantees was
GBP5,523,000 (2011: GBP5,031,000). No monies were outstanding at
30th September 2012 (2011: GBPnil). In the normal course of
business there are contingent liabilities including the provision
of bonds in respect of completed and uncompleted contracts.
28. Related party transactions
During the year to 30th September 2012, the Group paid GBP30,000
(2011: GBP30,000) to Marwyn Capital LLP for Directors' fees and
GBP112,000 (2011: GBP90,000) to Marwyn Partners Ltd for rent and
other office services. At the end of that year GBP31,000 (2011:
GBPNil) remained outstanding.
Mark Watts is a partner in Marwyn Capital LLP and Marwyn
Investment Management LLP and a shareholder in Marwyn Investments
Group Ltd, which owns 100% of Marwyn Partners Ltd. Marwyn Neptune
Fund LP is managed by Marwyn Investment Management LLP and
beneficially owns shares and warrants in the Group.
During the year to 30th September 2012, Kalistar LLP, a
partnership of certain of the Executive Directors of Silverdell
(UK) Ltd, charged GBP48,000 (2011: GBP48,000) for the provision of
cars used by some of the Directors of Silverdell (UK) Ltd. At the
end of that year GBPNil (2011: GBP14,000) remained outstanding.
One property occupied by Silverdell (UK) Ltd is owned by the
pension fund in which Sean Nutley has an interest. The property is
subject to a market rent of GBP35,000 (2011: GBP29,000) per annum
and GBP9,000 (2011: GBPnil) remained outstanding at the
year-end.
Loan notes of GBP750,000 (2011: GBPNil) were payable to vendors
of EDS who are now shareholders of Silverdell PLC and the interest
charged in respect of these was GBP18,000 (2011: GBPNil). The Group
also paid consulting fees of GBP38,000 to Andrew Routledge who was
a major shareholder in the Company.
Parent Company Balance Sheet
As at 30(th) September 2012
Company number: 5755897
2012 2011
Notes GBP'000 GBP'000
Fixed assets
Investments 31 42,331 24,121
Tangible assets 32 57 49
42,388 24,170
Current assets
Debtors: amounts falling due
within one year 33 554 6,087
Creditors: amounts falling due within
one year 34 (5,204) (9,582)
Net current liabilities (4,650) (3,495)
Total assets less current liabilities 37,738 20,675
Creditors: amounts falling due
after one year 34 (9,856) (3,913)
Total net assets 27,882 16,762
Capital and reserves
Called up share capital 24 3,132 1,808
Share premium account 35 15,283 2,456
Equity reserve 35 788 721
Other reserve 35 4,135 4,135
Profit and loss account 35 4,544 7,642
Total shareholders' funds 27,882 16,762
The financial statements were approved by the Board of Directors
and authorised for issue on 4 December 2012.
They were signed on behalf of the Board of Directors.
Ian Johnson
Director
29. Significant accounting policies
The separate financial statements of the Company have been
prepared on the historical cost basis and under the going concern
assumption. The accounting policies are summarised below and have
been applied consistently throughout the year and the preceding
year. The separate financial statements are presented as required
by the Companies Act 2006. The Company has elected to prepare its
Parent Company financial statements in accordance with UK GAAP.
Taxation
The tax currently payable is based on the taxable profit for the
year. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income and expense
that are taxable or deductible in other years and it further
excludes items which are never taxable or deductible. The Company's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted at the balance sheet
date.
Deferred taxation is provided in full on all timing differences
that result in an obligation at the balance sheet date to pay more
tax, or a right to pay less tax, at a future date, subject to the
recoverability of deferred tax assets. Deferred tax assets and
liabilities are not discounted.
Share-based payments
The Company makes equity settled share-based payments to the
Directors, which are measured at fair value at the date of grant.
The fair value of share options issued with non-market vesting
conditions has been calculated using the Black Scholes model. For
all other share awards, the fair value is determined by reference
to the market value of the share at the date of grant. For all
share schemes with non-market related vesting conditions, the
likelihood of vesting has been taken into account when determining
the associated charge. Vesting assumptions are reviewed during each
reporting period to ensure they reflect current expectations.
The Company also makes equity settled share-based payments to
certain employees of certain subsidiary undertakings. Equity
settled share-based payments that are made to employees of the
Company's subsidiaries are treated as increases in equity over the
vesting period of the award, with a corresponding increase in the
Company's investments in subsidiaries, based on an estimate of the
number of shares that will eventually vest.
Any payments received from subsidiaries are applied to reduce
the related increases in investments in subsidiaries.
Accounting for share-based payments is the same as under IFRS 2
and details on the schemes and option pricing models relevant to
the charge included in the Company financial statements are set out
in Note 26 to the consolidated financial statements of the Group
for the year ended 30th September 2012.
Investments
Investments represent equity holdings in subsidiaries, joint
ventures and associates and are held at cost less provision for
impairment.
Tangible fixed assets and depreciation
Tangible fixed assets are stated at historic purchase cost net
of accumulated depreciation and any provision for impairment. Cost
comprises the original purchase price of the asset and the cost
attributable to bringing the asset to its working condition for its
intended use. Depreciation is provided on all tangible fixed
assets, at rates calculated to write off the cost or valuation,
less estimated residual value, of each asset on a straight-line
basis over its expected useful life, as follows:
Computer equipment 33% on cost
Impairments in the value of fixed assets are charged to the
profit and loss account.
30. Parent Company profit and loss account
The Company has taken advantage of the exemption afforded by the
Companies Act 2006 and has not presented its own profit and loss
account. The loss for the year dealt with in the financial
statements of the Parent Company is GBP3,298,000 (2011:
GBP1,711,000).
31. Investments
2012
GBP'000
Cost
At 1(st) October 2011 40,841
Capital contributions to subsidiaries arising
from share based payments 170
Acquisition of EDS Group Holdings Ltd 18,040
At 30th September 2012 59,051
Impairment
At 1st October 2011 and 30th September
2012 (16,720)
Carrying amount
At 30th September 2012 42,331
At 30th September 2011 24,121
Details of the principal subsidiary undertakings are as
follows:
Proportion
Country of of ordinary
Company incorporation shares held Principal activity
Silverdell (UK) Ltd England and Asbestos and environmental
Wales 100% services
Redhill Analysts Ltd England and
Wales 100% Consulting services
Kitsons Group Ltd England and Asbestos and environmental
Wales 100% services
RDS Asbestos Management England and
Consultants [UK] Ltd* Wales 100% Consulting services
EDS Group Holdings Ltd England and
Wales 100% Holding company
Euro Dismantling Services Provision of dismantling,
Ltd** England and demolition, industrial
Wales 100% services and asset recovery
EDS Commissioning Canada Canada Provision of dismantling,
Inc** demolition, industrial
100% services and asset recovery
EDS Australia Pty Ltd Australia Provision of dismantling,
demolition, industrial
100% services and asset recovery
Toplam Muhendislik ve Turkey Dismantling, demolition,
Taahhut Ithalat Ihracat decommissioning and
Limited Sirketi** 100% asset recovery
EDS Plant Solutions Ltd** England and
Wales 100% Hire services
Process Plant Solutions England and
Ltd** Wales 100% Asset recovery
Waste Recycling and Destruction England and Waste disposal and recycling
Ltd** Wales 100% services
* Held via Redhill Analysts Ltd
** Held via EDS Group Holdings Ltd
32. Tangible fixed assets
The Company acquired owned computer equipment with a cost of GBP
39,000 (2011: GBP30,000) during the year and incurred a
depreciation charge on these assets of GBP 31,000 (2011:
GBP19,000). The closing net book value of tangible fixed assets was
GBP57,000 (2011: GBP49,000).
33. Debtors
Amounts falling due within one year:
2012 2011
GBP'000 GBP'000
Other debtors and prepayments 103 169
Amounts due from group undertakings 234 5,917
Corporation tax recoverable 217 -
Deferred tax asset - 1
554 6,087
The deferred tax asset at 30(th) September 2011 related to
timing differences on tangible fixed assets and the amount charged
to the profit and loss account for the year was GBP1,000 (2011:
GBP14,000).
34. Creditors
Amounts falling due within one year
2012 2011
GBP'000 GBP'000
Trade creditors 503 -
Bank overdraft (secured) 395 2,072
Bank loans (secured) 900 800
Other creditors and accruals 427 465
Amounts due to subsidiary undertakings 1,423 6,245
Contingent consideration payable 1,556 -
5,204 9,582
The carrying amount of trade payables approximates to their fair
value.
Amounts falling due after more than one year
2012 2011
GBP'000 GBP'000
Bank loans (secured) 7,550 3,913
Loan notes 750 -
Contingent consideration payable 1,556 -
9,856 3,913
Full details of the Company's bank loans are disclosed in Notes
20 and 22 to the Group financial statements.
Full details of the contingent consideration payable are
disclosed in Note 21 to the Group financial statements.
35. Share premium account and reserves
Share premium Profit
account Equity and loss
GBP'000 reserve Other reserves account Total
GBP'000 GBP'000 GBP'000 GBP'000
At At 1st October 2011 2,456 721 4,135 7,642 14,954
Share-based payment credit
in the year - 267 - - 267
Retained loss for the year - - - (3,298) (3,298)
Shares issued 13,236 - - - 13,236
Expenses of share issue (409) - - - (409)
Transfer - (200) - 200 -
At 30th September 2012 15,283 788 4,135 4,544 24,750
The remaining balance in other reserves is not distributable and
relates to the premium arising on shares issued as consideration
for the acquisition of subsidiary companies and warrants issued to
Marwyn Neptune Fund LP in consideration for their participation in
placing of shares on 19 July 2006.
36. Related parties
The Company has taken advantage of the exemption available under
FRS 8 Related Party Disclosures not to disclose details of
transactions between wholly owned Group companies.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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