TIDMSID
RNS Number : 3033G
Silverdell PLC
05 June 2013
Silverdell PLC
("Silverdell" or the "Group")
Interim results for the half year ended 31st March 2013
Silverdell, the Specialist Environmental Support Services group,
reports unaudited interim results for the half year ended 31st
March 2013.
Financial highlights
Highlights (Note: 2013 numbers include the acquisition of EDS
Group Holdings Ltd completed on 18 June 2012)
-- Revenue up 103% at GBP63.9m (2012:GBP31.4m)
-- Proforma revenues up 15% (2012: GBP55.4m)
-- Order book at GBP238m (2012: GBP133m)
-- Adjusted EBITDA* up 206% at GBP5.2m (2012: GBP1.7m)
-- Proforma adjusted* EBITDA* up 33% (2012: GBP3.9m)
-- Adjusted operating profit up 157% at GBP3.6m (2012: GBP1.4m)
-- Adjusted EPS* up 100% to 0.8 pence (2012:0.4 pence)
-- Net debt of GBP15.8m, including finance leases of GBP8.1m (2012: GBP6.7m)
Unaudited
Six
Unaudited months Audited
Six months ended Year
ended 31st ended
31st March March 30th September
2013 2012 2012
GBPm GBPm GBPm
Continuing operations:
Turnover 63.9 31.4 82.5
Adjusted EBITDA* 5.2 1.7 6.2
Adjusted operating profit
* 3.6 1.4 4.8
Operating (loss) / profit (1.1) 0.6 1.3
Adjusted pre-tax profit * 3.3 1.1 4.3
Adjusted EBITDA margin* 8.1% 5.4% 7.5%
Pence Pence Pence
Earnings per share
Adjusted* diluted 0.8 0.4 1.3
Basic (0.3) 0.1 0.0
Diluted (0.3) 0.1 0.0
*Before intangible assets amortisation of GBP1.6m
(2012:GBP0.1m), non-recurring items of GBP3.2m (2012: GBP0.6m) and
share-based payments of GBP0.1m (2012:GBP0.1m). From September 2013
this table will not include Operating Profit, as the key
performance indicator is considered to be adjusted EBITDA
Unaudited Proforma Results for the period ended 31(st)
March:
2013 2012
Silverdell
Silverdell EDS Group Combined GBPm EDS Group Combined
GBPm GBPm GBPm GBPm GBPm
Turnover 34.7 29.2 63.9 31.4 24.0 55.4
Adjusted EBITDA* 1.2 4.0 5.2 1.7 2.2 3.9
---------- ----------- -------- ---------- ----------- ----------
*Before intangible assets amortisation, non-recurring items and
share-based payments
Operational Highlights
-- EDS successfully integrated into Group with scope for further synergies
-- Record level of over GBP300m of total pipeline opportunities
-- Strong performances from Canada and Australia contracts
-- GBP20m of new contracts secured in H1 are performing in line with expectations
-- New Non-Executive Director appointed
Commenting on the results, Chairman Stuart Doughty said:
"The strength and breadth of our service offering and the
international spread of operations have once again provided the
foundations for a resilient set of results and good revenue growth,
despite challenging conditions in the UK. With GBP66m of work
scheduled to fall in the second half as at the period end and a
record pipeline of opportunities, the outlook remains positive and
our expectations for the full year are unchanged. The pipeline of
opportunities supports our view that we can fulfil our key
strategic objectives of year on year revenue growth and increased
EBITDA margin."
ENQUIRIES:
Silverdell PLC Tel: 020 7004 2741
Sean Nutley, Chief Executive
Ian Johnson, Finance Director
College Hill (Public Relations) Tel: 020 7457 2020
Helen Tarbet
Mark Garraway
finncap (Nominated Advisor and Broker)
Matt Goode/Ben Thompson (Corporate Tel: 020 7220 0500
Finance)
Victoria Bates (Corporate Broking)
Chairman's Statement
I am pleased to report the results for the six months ended 31st
March 2013. The strength of our service offering and the
international spread of operations has once again helped us to
achieve a resilient set of results, and good revenue growth,
against a market backdrop which continues to be challenging,
particularly in the UK.
Revenues for the period were GBP63.9m (2012: GBP31.4m) up 103%
including the benefit of the EDS acquisition completed on 18th June
2012. Decommissioning ("EDS") revenues were GBP29.2m with robust
performances in Canada and Australia. Stripping out the effect of
the acquisition, like for like revenues were GBP34.7m, still up
over 10% against the comparable period last year. External
Consulting revenues were broadly flat at GBP6.8m (2012: GBP6.9m),
while Remediation revenues were up 14% at GBP27.9m (2012:
GBP24.5m).
Adjusted EBITDA* was GBP5.2m (2012: GBP1.7m) up 206%. EDS
accounted for around GBP4.0m of this, delivering good margins in
Canada and Australia, although gross margins in the UK
Decommissioning were diluted primarily due to low utilisation as a
result of a major contract deferral. In our Remediation business we
experienced a different business mix compared to prior years, with
much of the additional volumes in Silverdell being high quality
(albeit lower margin) cost-plus contracts. We have successfully
targeted framework and cost-plus contracts in the Oil and Gas,
Nuclear and Petrochemical sectors where the annual spend is
predictable and contract risk is significantly reduced. As a
consequence of the strategic decision to change this business mix,
underlying adjusted EBITDA* at Silverdell was GBP1.2m (2012:
GBP1.7m).
Following the restructuring of our Remediation business last
year, we achieved savings of over GBP0.8m in underlying group
administrative expenses for the six months ended 31st March 2013
however some additional expenses were incurred at the PLC level
with the centralisation of certain group-wide expenditure, such as
marketing and IT infrastructure.
The EDS acquisition has performed well, despite a material UK
contract deferral which was compensated for by strong performances
in Canada and Australia. We continue to strengthen our management
team in these territories to support our growth plans. As we
anticipated, the cultural fit of the EDS and Silverdell has proven
to be very good and the current order book and pipeline of
opportunities gives us every reason to believe that our strategic
plan to grow revenues by 15% per year is achievable.
We generated operating cash of GBP1.2m (2012: GBP0.2m),
including a significant working capital investment in two contracts
in Australia and Canada. Net debt ended the period at GBP15.8m
(2012: GBP6.7m), including finance leases of GBP8.1m. As in prior
years, the second half of the financial year is expected to see and
improvement in operational cashflow.
I would like to take this opportunity to welcome to the Board a
new independent Non-Executive Director. John Matthews, as Senior
Non-Executive Director brings with him a wealth of sector and PLC
Board experience.
The outlook remains positive and we remain confident in the full
year out-turn.
Stuart Doughty
Chairman
*Earnings before interest, tax, depreciation and amortisation
and also before impairment charges, share-based payments and
non-recurring items
Chief Executive's Statement
Overview
I am pleased to report further progress in line with our new
strategy "Changing the Landscape". We have delivered strong revenue
growth of 103% overall compared to 2012, and organic revenue growth
of 10% with revenues for the six months ended 31st March 2013 at
GBP63.9m (2012:GBP31.4m). Gross margins reflect a different
business mix than has previously been the case. However, we have
still managed to achieve a blended adjusted gross margin* of 20%
(2012: 28%) despite the tough challenges faced by EDS in the
UK.
Our order book at 31st March 2013 stands at GBP238m (2012:
GBP133m) with GBP66m (2012: GBP33m) scheduled to fall in the second
half of the year.
UK Decommissioning had a tough first half due to the deferral of
a significant contract into 2014 at very short notice and we have
worked hard to fill the gap in revenues that resulted from this.
Maintaining a direct labour force is key to our performance
quality, but reduces our responsiveness to sudden changes in
demand. We have built up the order book for UK Decommissioning for
the second half which will drive better utilisation of both the
workforce and assets and drive higher margins. There remains
considerable scope for restructuring in the UK and the
rationalisation of the cost base. UK Decommissioning gross margins
were 7% (2012: n/a).
With regard to international Decommissioning, our contracts in
Canada and Australia have performed strongly achieving gross
margins of 25% (2012: n/a) and 16% (2012: n/a) respectively.
Canadian revenues are up 13% at GBP14.3m for the six months ended
31st March 2013 (2012 proforma pre-acquisition: GBP12.7m). The
contract in Australia started later than expected in August of 2012
but is currently on track against the revised programme. Whilst the
working capital requirement is higher than anticipated due to
contractual changes and the upfront timing of asbestos removal
works, this will reverse during the second half of 2013. The Hydro
Quebec contract announced in January 2013 is performing in line
with expectations. We are continuing to build our local teams in
both countries in order to support our growth plans, including the
recent appointment of a General Manager for our Australian
operations who will report into the Managing Director of Global
Decommissioning.
UK Remediation successfully performed a number of significant
insulation, maintenance and scaffolding contracts in the period for
oil and gas, petrochemical and nuclear power customers. These are
typically cost-plus and fully reimbursable contracts which carry
less contract and pricing risk, but are lower margin; consequently
revenues are up 14% but at 18%, the blended gross margin was lower
than the same period last year (2012: 22%). With a strong order
book of work at higher margins scheduled for the second half of the
year, a combination of higher operative utilisation and an
improving business mix will see this margin improve.
Consulting revenues are steady, although the first half has been
characterised by higher than normal volumes of project management
works at lower margins, reflecting the lower commercial and
professional risks involved. Gross margin for the period was 38%
(2012: 47%).
We have been successful in keeping administrative costs under
tight control. While overall administrative expenses are up 23% as
a result of the EDS acquisition, administrative costs as a
percentage of revenues are down 10 percentage points at 14% (2012:
24%), with scope for further overhead reductions in the future,
specifically in the UK.
Further to our announcement of 7 March 2013, we achieved a final
account settlement on the Pembroke Power Station insulation
contract in South Wales, slightly higher than previously
estimated.
As at 31st March 2013, the order book stood at a healthy GBP238m
(2012: GBP133m) up 79% on last year, and up GBP19m on the 2012 year
end. This figure is higher than reported in our pre-close statement
on 12th April 2013 due to a re-assessment of the value of the
Magnox contract, recognising that current and predicted revenue
run-rates are well in excess of the estimates included in previous
versions of the order book. Of the order book, over GBP66m is
scheduled to fall in the second half of 2013 (2012: GBP33m). In
addition to this we have a tender pipeline of well over GBP300m and
an improving win ratio, especially on high value opportunities. We
are increasingly confident in the compelling nature of our service
offering to our key client base and in our strategy for growth.
Our Marketplace and Business Drivers
We operate in a market which demands high standards of legal and
regulatory compliance as well as reputational protection and risk
management. We continue to win new, high-quality business blue-chip
and public sector clients, with a continued movement away from
fixed price contracts towards long-term maintenance relationships.
Silverdell has a strong competitive advantage compared to other
companies in the industry. We provide a full service offering, from
on-site consulting to remediation, decommissioning and removal.
Strategy for Growth
After reporting the successful completion of the previous
strategic plan, which came to an end in September 2012, we have
embarked on a new three year plan to grow the business, called
"Changing The Landscape". Our market is characterised by strong
regulatory drivers and significant barriers to entry, particularly
track record. In addition, the newer markets for us in Canada and
Australia are more fragmented than the UK which gives us a very
dominant position. Our continued focus throughout the new strategic
period will be to leverage our strong competitive position,
particularly in Canada and Australia, and our blue-chip industrial
customer base to grow revenues by winning more contracts.
With regard to the deliverability of "Changing The Landscape",
we have set the following objectives:
1. To grow revenues by at least 15% per year.
2. To achieve and maintain a 10% EBITDA margin.
3. To have an order book worth at least two years' revenues.
4. To maintain the payment of a progressive dividend
Summary and Outlook
The Group's result has been encouraging through a difficult
first half and the performance of our overseas operations, coupled
with the strength of the UK order book and current margin run-rates
gives the Board confidence in the achievability of its forecasts
for the full year results.
Looking beyond the second half, the Board also remains positive
about the opportunities for growth, especially in Canada,
Australasia as well as Continental Europe.
Business Review
Remediation Consulting
2013 2012 2013 2012
% % % %
Public Sector
Local Government 15 17 16 11
Defence 12 21 3 6
Health & Education 6 10 13 14
Sub-total - public
sector 33 48 32 31
Private Sector
Power Generation, Utilities
and Industrial 39 21 15 17
Construction 11 11 3 2
Retail, Rail and Commercial 17 20 50 50
Total 100 100 100 100
Note: Decommissioning segment revenues are classified as 100%
"Power Generation, Utilities and Industrial"
Public Sector: Local Government works
Public sector work comprises 33% (2012: 48%) of our Remediation
revenues and 32% (2012: 31%) of our Consulting revenues. The nature
of this spend is safety critical maintenance and is not
discretionary: the public estate requires more than GBP25 billion
of maintenance spending each year.
Our relationships with local councils and housing authorities
continue to be strong, exemplified by the recent retention of the
North Lanarkshire Council Term Contracts. Local Government revenues
were 15% of our Remediation revenues (2012: 17%) as we continue to
support local councils around the UK in remediating their
infrastructure and property stock. This revenue stream has held up
very well despite the Government's austerity programme remaining
broadly flat year on year in revenue terms.
In our Consulting businesses, local government and housing
authority revenues were 16% of total revenues (2012: 11%). We have
had success in winning survey works with a number of local councils
as well as Merseyside Police. We also provide Consultancy services
under a long-term framework contract for the Houses of
Parliament.
Public Sector: Defence
Silverdell continues to provide a large range of different
services in secure nuclear facilities, from small capital projects
to high risk decontamination services. We continue to build up very
strong credentials working within the constraints of high security
measures and rigid adherence to protocols and processes.
Remediation revenues in Defence as a share of total revenues
were 12% (2012: 21%). Our contract with the one of the Regional
Prime Contracts (RPC) for MoD housing and properties came to an end
during the first half of 2013 and has yet to be replaced, although
our relationship with the Atomic Weapons Establishment ("AWE")
continues to grow. At AWE we have worked on a number of critical
high profile projects delivering both core and specialist services,
as well as adding Demolition and Deplanting capability into our
service portfolio. We have successfully renewed a three year
scaffold access framework contract at site and extended the
duration of other key framework contracts and are now well placed
to develop new contracts and relationships going forward.
Consulting services to the Defence sector were 3% of the total H1
2013 Consulting revenues (2012: 6%).
Public Sector: Health & Education
The Health & Education proportion of Remediation revenues
fell to 6% (2012: 10%). During the first half of 2013, the Group
worked with two large universities on site improvement projects as
well as completed works at a hospital in South Wales. We have also
recently secured two regional NHS frameworks in Scotland.
Health & Education represents 13% (2012: 14%) of total
Consulting revenues. Major contracts in this sector include working
with a number of main contractors on "Building Schools for the
Future" works as well as a significant framework contract with a
major university in Scotland.
Private Sector: Power Generation, Utilities and Industrial
Decommissioning
100% of the Decommissioning segment revenues are attributable to
Power Generation, Utilities and Industrial (2012: 100%). In Canada
we have performed works for Rio Tinto at Sept Iles, Invista at
Millhaven and Gaspesie at Chandler involving decontamination of
asbestos, hydrocarbons, mercury, heavy metals and other hazards.
EDS Canada has exported more than 100,000 tonnes of metals for
re-processing in the last 12 months. We acquired the Hydro Quebec
Tracey site during the first half of 2013 and although that
finished the first half at its peak working capital requirement, we
are pleased to report that the contract is progressing well. This
GBP12m contract has a large asbestos removal element as well as the
dismantling and decommissioning of a 50-year old oil-fired power
station, the total contract includes over 37,000 tonnes of metals
to be sold for re-processing as well as substantial scope for
equipment re-sale.
In Australia, we are on programme on the country's first oil
refinery to be decommissioned. Working for one of the world's
largest companies, we are decontaminating and clearing a site and
removing 40,000 tonnes of metals for recycling.
Finally, while the UK operations have been hit by the deferral
to 2014 of a very significant contract in the Midlands, we are
seeing a promising pipeline of opportunities as we strive to close
the revenue gap that this created. In particular we are working on
two UK refining sites as well as Covidien in Chesterfield,
Carlsberg in Leeds, Heineken in Nottingham and the decommissioning
works for Ineos at Runcorn.
The Power Generation, Utilities and Industrial sector share of
Remediation revenues was 39% (2012: 21%) with absolute revenues in
this segment seeing a 113% rise year on year. Significant contracts
in this sector were fully reimbursable contracts at a newbuild gas
processing site in Barrow and a refinery site shut-down in South
Wales. The low contract risk associated with these works did mean
that these were completed at lower levels of gross margin than the
historic Remediation operations, and this accounted for the larger
part of the overall decline in gross margins year on year.
In Consulting, Power Generation, Utilities and Industrial
revenues were 15% of the total (2012: 17%).
Power Generation
During the year we have seen a ramp up of work under the Magnox
framework which was won in November 2011. As the framework contract
comes alive, we have expanded from one major site into three and
are actively working at Tier 1 level with Magnox and Tier 2 level
with other supply chain framework partners. In the coming months we
will be tendering and negotiating with these customers on new work
programmes that will extend into 2015 and beyond.
Utilities and Industrial
As well as the fully reimbursable contracts noted above, we have
been performing a term contract for provision of access services
with National Grid North West Utilities and significant remediation
works at a petfood production plant in the Midlands.
Our Consulting division has continued its long-standing
relationship with a North East water utility.
Private Sector: Construction
On the Remediation side, the share of total revenue from
Construction was 11% (2012: 11%). For Consulting, the share of
total revenue from Construction was 3% (2012: 2%).
Private Sector: Retail, Rail and Commercial
Overall, Retail, Rail and Commercial revenues decreased as a
share of overall Remediation revenues to 17% (2012: 20%), although
in absolute terms revenues rose by 1%. Retail represented 50% of
Consulting revenues (2012: 50%).
Retail
The Remediation division works with a number of national
retailers in support of their store refurbishments plans, providing
methodology advice to management teams as well as removal
services.
The acquisition of RDS at the end of 2011 significantly
increased the Consulting division's penetration of the High Street
built environment (pubs, clubs and shops). We are also working with
a number of larger retailers to provide feedback to government on
public policy and the development of Health and Safety legislation
with specific regard to asbestos hazards.
Rail
The Remediation division performed works on Crossrail during the
period. We continue to provide Consulting services to the Newcastle
Metro.
Commercial
We continue to work with insurers and loss adjusters to provide
emergency remediation services under long-term framework
relationships. Within this sector, Consulting performs nationwide
survey and management work under a long-term framework contract for
the BBC.
Sean Nutley
Group Chief Executive
*Before non-recurring cost of sales from an historic contract
settlement
Financial Review
Revenue for the six months ended 31st March 2013 was up 103% at
GBP63.9m (2012: GBP31.4m), with external Remediation revenues of
GBP27.9m (2012: GBP24.5m), Decommissioning revenues of GBP29.2m
(2012: nil) and external Consulting revenues of GBP6.8m (2012:
GBP6.9m). UK revenues were GBP42.0m (2012: GBP31.4m), Canada
GBP14.2m (2012: nil) and Australia revenues were GBP7.7m (2012:
nil). Adjusted gross profit** was up 45% at GBP12.8m (2012:
GBP8.8m#) however adjusted gross margin** was down 8 percentage
points at 20% (2012: 28%#). Underlying gross profit, excluding EDS,
was GBP7.5m (2012: GBP8.8m#), driven by a combination of the
business mix of more lower margin maintenance services work on
large cost-reimbursable contracts and more Consulting project
management work. Remediation gross margins were 18% (2012: 22%) and
Consulting gross margins were 38% (2012: 47%). Within EDS, UK
margins were depressed as a result of a large contract deferral
which resulted in significant under-utilisation of both the UK
labour force and the related capital assets. We expect the second
half utilisation and business mix to drive a return to normalised
margin levels. Gross margins for EDS for the UK, Australia and
Canada were 7%, 16% and 25% respectively (2012: n/a).
Non-recurring cost of sales of GBP2.6m (2012: nil) was recorded
in the period following the acceptance of a settlement on the
Pembroke Power Station, a Remediation contract which commenced in
2010 and on which the Group accepted a settlement of approximately
GBP1m in order to provide cash for new projects in the
Decommissioning division. This was GBP0.1m higher than previously
estimated in our announcement of 7th March 2013.
Administrative costs, excluding share-based payments, were
GBP9.1m (2012: GBP7.4m), up 23% due to the acquisition of EDS. As a
percentage of revenue, administrative costs fell 10 percentage
points to 14% (2012: 24%) reflecting the impact of the group
restructuring programme implemented in 2012.
Adjusted EBITDA* was GBP5.2m (2012: GBP1.7m) as a result of the
favourable impact of the EDS acquisition more than offsetting lower
underlying gross profit in Remediation and Consulting as described
above.
There was a further GBP0.5m (2012: GBP0.6m) of non-recurring
administrative expenses largely relating to integration costs of
RDS and EDS as well as an increase in the contingent consideration
estimate for RDS. Amortisation of intangibles for the first half of
2013 was GBP1.6m (2012: GBP0.1m), relating chiefly to the EDS
customer list and order book intangible asset of GBP7.8m that was
recognised on acquisition and which will be written down over the
next two years.
Finance costs for the period ended 31st March 2013 were GBP0.6m
(2012: GBP0.3m), the increase reflecting the higher levels of net
debt compared to last year and the discount cost on the contingent
consideration for the acquisition of EDS.
The reported loss before tax was GBP1.7m (2012: profit of
GBP0.3m).
Cash generated from operations for the six months ended 31st
March 2013 was GBP1.2m (2012: GBP0.2m). Net debt at 31st March 2013
was GBP15.8m including GBP8.1m of finance leases (2012: GBP6.7m).
Gearing at 31st March 2013 was 43% (2012: 28%).
Income tax for the period has been accrued based on the
anticipated effective tax rate on for this financial year. The
underlying effective rate for the group is expected to settle at
around 32% (2012: 30%), based on the geographical spread of the
group's profits.
The group used forward foreign exchange contracts during the
period in order to hedge foreign exchange risk on overseas
Decommissioning operations. The fair value of these instruments as
at 31st March 2013 was a liability of GBP0.1m (2012: nil).
As announced in the last annual report, during the period the
group paid its maiden dividend of 0.175 pence per ordinary share,
totalling GBP0.5m (2012: nil).
Adjusted* basic earnings per share was 0.8 pence (2012: 0.4
pence).
Ian Johnson
Chief Financial Officer
* Before intangible assets amortisation, non-recurring items,
and share-based payments
**Before non-recurring cost of sales from an historic contract
settlement
#Cost of Sales for the six months ended 31st March 2012 has been
increased by GBP165,000 and Administrative Expenses decreased to
reflect the consistent presentation of depreciation on plant and
machinery with that adopted in subsequent periods
Silverdell PLC
Condensed consolidated income statement
For the six months ended 31st March 2013
Before
non-recurring Non-recurring
items and items and
amortisation amortisation
(see Note (see Note
2) 2)
Unaudited Unaudited Unaudited Unaudited Audited
Six months Year
Six months Six months Six months ended ended
ended ended ended 31st March 30th
31st March 31st March 31st March 2012 September
2013 2013 2013 (Restated)* 2012
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 3 63,930 - 63,930 31,428 82,521
Cost of sales (51,117) (2,610) (53,727) (22,650) (62,138)
Gross profit 12,813 (2,610) 10,203 8,778 20,383
Administrative
expenses (9,231) - (9,231) (7,528) (15,815)
------------------------------------------ ---- ------------- ------------- ----------- ------------ -----------
* amortisation of intangible assets - (1,620) (1,620) (80) (1,073)
* non-recurring expenses - (461) (461) (614) (2,176)
Total administrative
expenses (9,231) (2,081) (11,312) (8,222) (19,064)
Operating profit
/ (loss) 3,582 (4,691) (1,109) 556 1,319
Finance costs
(net) 4 (386) (169) (555) (282) (787)
Profit / (loss)
before tax 3,196 (4,860) (1,664) 274 532
Income taxation
(charge) / credit 6 (639) 1,338 699 (81) (429)
Profit/ (loss)
for the period 2,557 (3,522) (965) 193 103
Earnings per
share (Pence)
Basic earnings
per ordinary
share 7 0.8 (1.1) (0.3) 0.1 0.0
Diluted earnings
per ordinary
share 7 0.8 (1.1) (0.3) 0.1 0.0
*Cost of Sales for the six months ended 31st March 2012 has been
increased by GBP165,000 and Administrative Expenses decreased to
reflect the consistent presentation of depreciation on plant and
machinery with that adopted in subsequent periods
Silverdell PLC
Condensed consolidated statement of comprehensive income
For the six months ended 31st March 2013
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31st March 31st March 30th September
2013 2012 2012
GBP'000 GBP'000 GBP'000
(Loss) / profit for the period (965) 193 103
Other comprehensive income
Cash flow hedges:
* (loss) / gain arising during the period (132) 16 -
* related tax charge 32 (4) -
(100) 12 -
Foreign currency translation gain 168 - 6
Total comprehensive income for
the period (897) 205 109
Silverdell PLC
Condensed consolidated statement of changes in equity
For the six months ended 31st March 2013
Six months ended 31st March 2013 (unaudited)
Foreign
Share Share Other Hedging Equity exchange Retained
capital premium reserve reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1st October
2012 3,132 15,283 4,135 - 788 6 14,854 38,198
Net loss for
the period - - - - - - (965) (965)
Other comprehensive
income - - - (100) - 168 - 68
Total comprehensive
income for
the period - - - (100) - 168 (965) (897)
Share-based
payments - - - - 72 - - 72
Dividends
paid - - - - - - (548) (548)
At 31st March
2013 3,132 15,283 4,135 (100) 860 174 13,341 36,825
Six months ended 31st March 2012 (unaudited)
Foreign
Share Share Other Hedging Equity exchange Retained
capital premium reserve reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1st October
2011 1,808 2,456 4,135 (22) 721 - 14,573 23,671
Net profit
for the period - - - - - - 193 193
Other comprehensive
income - - - 12 - - - 12
Total comprehensive
income for
the period - - - 12 - - 193 205
Share-based
payment charge - - - - 125 - - 125
At 31st March
2012 1,808 2,456 4,135 (10) 846 - 14,766 24,001
Year ended 30th September 2012 (audited)
Foreign
Share Share Other Hedging Equity exchange Retained
capital premium reserve reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1st October
2011 1,808 2,456 4,135 (22) 721 - 14,573 23,671
Net profit
for the period - - - - - - 103 103
Other comprehensive
income - - - - - 6 - 6
Total comprehensive
income for
the period - - - - - 6 103 109
Shares issued 1,324 13,236 - - - - - 14,560
Expenses of
share issue - (409) - - - - - (409)
Share-based
payment charge - - - - 267 - - 267
Transfer - - - 22 (200) - 178 -
At 30th September
2012 3,132 15,283 4,135 - 788 6 14,854 38,198
Silverdell PLC
Condensed consolidated balance sheet
At 31st March 2013
Unaudited Unaudited Audited
31st March 31st March 30th September
2013 2012 2012
Note GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 5 26,420 17,921 26,420
Other intangible assets 5,598 373 7,216
Deferred tax asset 727 - 713
Property, plant and equipment 14,432 3,080 11,350
Trade and other receivables 1,724 1,001 1,724
48,901 22,375 47,423
Current assets
Inventories and work in progress 3,557 3,729 4,903
Trade and other receivables 39,273 18,973 34,646
Cash and cash equivalents 6,445 1,660 4,456
49,275 24,362 44,005
Total assets 98,176 46,737 91,428
Non-current liabilities
Borrowings 13,691 5,571 11,386
Trade and other payables 1,724 1,001 1,724
Contingent consideration 1,637 161 1,704
Deferred tax liabilities 1,400 200 1,884
18,452 6,933 16,698
Current liabilities
Borrowings 8,524 2,756 4,296
Trade and other payables 31,249 12,020 29,083
Other financial liabilities 132 15 -
Contingent consideration 2,020 509 1,643
Current taxation liabilities 974 503 1,510
42,899 15,803 36,532
Total liabilities 61,351 22,736 53,230
Net assets 36,825 24,001 38,198
Equity
Share capital 3,132 1,808 3,132
Share premium account 15,283 2,456 15,283
Equity reserve 860 846 788
Hedging reserve (100) (10) -
Foreign currency translation reserve 174 - 6
Other reserve 4,135 4,135 4,135
Retained earnings 13,341 14,766 14,854
Total equity 36,825 24,001 38,198
Silverdell PLC
Condensed consolidated cash flow statement
For the six months ended 31st March 2013
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31st March 3st March 30th September
2013 2012 2012
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
(Loss) / profit for the period (965) 193 103
Income taxation (credit) / charge (699) 81 429
Finance costs (net) 555 282 787
Amortisation of intangibles 1,620 80 1,073
Depreciation of property, plant and
equipment 1,514 339 1,364
Profit on the sale of property, plant
and equipment (93) - (73)
Change in fair value of contingent
consideration payable 169 - -
Share-based payments 72 125 267
Net foreign exchange gain (30) - -
Movements in working capital:
Decrease / (increase) in inventories
and work in progress 1,346 (665) (1,219)
(Increase) in trade and other receivables (4,627) (1,603) (8,031)
Increase in trade and other payables 2,312 1,370 6,254
Cash generated from operations 1,174 202 954
Income tax paid (net) (303) (347) (555)
Net cash inflow / (outflow) from operating
activities 871 (145) 399
Cash flows from investing activities
Purchase of property, plant and equipment (278) (544) (138)
Proceeds from sale of property, plant
and equipment 435 13 375
Acquisition of subsidiaries (net of
cash acquired) (47) (157) (6,784)
Net cash inflow /(outflow) from investing
activities 110 (688) (6,547)
Cash flows from financing activities
Bank interest paid (net) (195) (324) (630)
Interest paid on finance leases (161) (10) (92)
Payments for hire purchase contract
principals (2,520) (73) (990)
Proceeds from bank loans 2,500 1,000 3,737
Repayments of bank loans (450) - -
Dividends paid on equity shares (548) - -
Proceeds from issue of equity shares
(net) - - 8,401
Net cash (outflow) / inflow from financing
activities (1,374) 593 10,426
Net (decrease) / increase in cash and
cash equivalents (393) (240) 4,278
Cash and cash equivalents at beginning
of the period 3,960 (318) (318)
Effects of exchange rate changes on
balances of cash held in foreign currencies 39 - -
Cash and cash equivalents at end of
the period 3,606 (558) 3,960
Silverdell PLC
Notes to the financial information
For the six months ended 31st March 2013
1. Basis of preparation
Silverdell PLC is a public limited company incorporated and
domiciled in the United Kingdom. The Company's ordinary shares are
traded on the AIM market of the London Stock Exchange.
The condensed interim financial statements for the six months
ended 31st March 2013 have been prepared in accordance with the
accounting policies expected to be applied to the full year
financial statements for the year ending 30th September 2013, which
are consistent with International Financial Reporting Standards
("IFRS") as adopted for use in the European Union (EU). The
directors have elected not to apply International Accounting
Standard 34, Interim Financial Reporting, which is not mandatory
for AIM-listed companies. The interim financial statements are
unaudited and do not constitute statutory accounts within the
meaning of section 434 of the Companies Act 2006. The financial
information for the year ended 30th September 2012 has been
extracted from the audited annual report and accounts which have
been filed with the Registrar of Companies. The auditors' report on
the statutory accounts for the year ended 30th September 2012 was
unqualified and did not contain a statement under section 498 of
the Companies Act 2006.
The interim financial statements do not include all of the
information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's
annual financial statements for the year ended 30th September 2012.
The figures for the six months ended 31st March 2012 have been
extracted from the interim results for that period.
Going concern
After making enquiries, the directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly they
continue to adopt the Going Concern basis in preparing the interim
financial statements.
2. Non-recurring items and amortisation
Unaudited
Unaudited Six months Audited
Six months ended Year
ended 31st ended
31st March March 30th September
2013 2012 2012
GBP'000 GBP'000 GBP'000
Amortisation of intangible assets 1,620 80 1,073
Cost of sales 2,610 - -
Administrative expenses 461 614 2,176
Finance costs 169 - 283
4,860 694 3,532
Related income tax credit (1,338) (204) (709)
3,522 490 2,823
Cost of sales
The non-recurring cost of sales of GBP2.6m (2012: nil)
represents the write off arising from the acceptance of a
settlement on the final account negotiation on Pembroke Power
Station, a Remediation contract secured in 2010. The settlement was
accepted in order to release approximately GBP1m of cash to take
advantage of new opportunities in the Decommissioning division.
Administrative expenses
The non-recurring administrative expenses comprise the
following:
Unaudited
Unaudited Six months Audited
Six months ended Year
ended 31st ended
31st March March 30th September
2013 2012 2012
GBP'000 GBP'000 GBP'000
Internal restructuring expenses 213 569 832
Change in fair value of contingent
consideration payable 169 - -
Business acquisition expenses - 45 1,275
Other non-recurring expenses 79 - 69
461 614 2,176
Internal restructuring expenses in 2013 represent severance
costs, property and other costs incurred principally in the
reorganisation of the Group's Consulting division. The equivalent
costs in 2012 related to restructuring of the Remediation
division.
The change in fair value of contingent consideration arose from
higher than expected outcomes on
previous acquisitions, principally RDS.
Business acquisition costs relate to the acquisition and
subsequent integration of subsidiary undertakings.
Other non-recurring costs were incurred principally on overseas
business development.
Finance costs
The non-recurring finance costs are analysed further as
follows.
Unaudited
Unaudited Six months Audited
Six months ended Year
ended 31st ended
31st March March 30th September
2013 2012 2012
GBP'000 GBP'000 GBP'000
Discounting of contingent consideration 169 - 85
Costs of new banking facilities - - 198
169 - 283
3. Segmental reporting
Strategic segments
Management consider that the Group comprises three strategic
segments - Remediation, Decommissioning and Consulting- within the
meaning of IFRS8, "Operating segments".
Six months ended 31st March 2013 (unaudited)
Remediation Decommissioning Consulting Unallocated Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Total revenue 29,049 29,208 7,008 - 65,265
Inter-segment revenue (1,184) - (151) - (1,335)
External revenue 27,865 29,208 6,857 - 63,930
Result
Operating profit
before amortisation
and non-recurring
items 1,139 2,906 707 (1,170) 3,582
Intangible assets
amortisation - (1,539) (81) - (1,620)
Non-recurring cost
of sales (2,610) - - - (2,610)
Non-recurring administrative
expenses 1 (29) (354) (79) (461)
Non-recurring finance
costs - (163) (6) - (169)
Finance costs (net) (20) (143) (12) (211) (386)
Profit / (loss) before
tax (1,490) 1,032 254 (1,460) (1,664)
Taxation 626 (434) (107) 614 699
Profit / (loss)for
the year (864) 598 147 (846) (965)
Balance sheet
Total assets 32,624 49,794 14,573 1,185 98,176
Total liabilities 13,150 29,666 3,029 15,506 61,351
Other information
Capital expenditure 497 4,159 101 - 4,757
Depreciation 242 1,188 76 8 1,514
Six months ended 31st March 2012 (unaudited)
Remediation Decommissioning Consulting Unallocated Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Total revenue 24,748 - 7,003 - 31,751
Inter-segment revenue (213) - (110) - (323)
External revenue 24,535 - 6,893 - 31,428
Result
Operating profit
before amortisation
and non-recurring
items 1,242 - 899 (891) 1,250
Intangible assets
amortisation - - (80) - (80)
Non-recurring administrative
expenses (472) - (87) (55) (614)
Finance costs (net) (38) - (13) (231) (282)
Profit / (loss) before
tax 732 - 719 (1,177) 274
Taxation (216) - (213) 348 (81)
Profit / (loss)for
the year 516 - 506 (829) 193
Balance sheet
Total assets 31,526 -15,006 205 46,737
Total liabilities 14,056 - 3,578 5,102 22, 736
Other information
Capital expenditure 625 - 148 7 780
Depreciation 249 - 76 14 339
Year ended 30th September 2012 (audited)
Remediation Decommissioning Consulting Unallocated Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
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
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
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
Geographical segments
An analysis of the Group's results by geographical segment is
presented below. Substantially all the activities outside the
United Kingdom related to the Decommissioning strategic segment. UK
activities have been sub-divided between UK trading operations and
the group wide head office. No analysis is provided for the six
months ended 31st March 2012 as substantially all the Group's
results for that period arose in the United Kingdom.
Six months ended 31st March 2013 (unaudited)
UK
UK Corporate UK Canada Australia
Operations Office Total Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Total revenue 42,000 - 42,000 14,200 7,730 63,930
Inter-segment - - -
revenue - - -
External revenue 42,000 - 42,000 14,200 7,730 63,930
Result
Operating profit
before amortisation
and non-recurring
items 1,421 (1,170) 251 2,352 979 3,582
Intangible assets
amortisation (1,620) - (1,620) - - (1,620)
Non-recurring
cost of sales (2,610) - (2,610) - - (2,610)
Non-recurring
administrative
expenses (360) (79) (439) (21) (1) (461)
Non-recurring
finance costs (169) - (169) - - (169)
Finance costs
(net) (41) (211) (252) (79) (55) (386)
Profit / (loss)
before tax (3,379) (1,460) (4,839) 2,252 923 (1,664)
Taxation 1,152 499 1,651 (676) (276) 699
Profit / (loss)for
the year (2,227) (961) (3,188) 1,576 647 (965)
Balance sheet
Total assets 73,006 1,185 74,191 14,948 9,037 98,176
Total liabilities 26,856 15,506 42,362 10,854 8,135 61,351
Other information
Capital expenditure 3,375 - 3,375 1,371 11 4,757
Depreciation 929 8 937 476 101 1,514
Year ended 30th September 2012 (restated*)
UK UK Canada Australia Group
UK Corporate & Other
Trading operations Office Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Total revenue 69,700 - 69,700 10,050 2,771 82,521
Inter-segment - - -
revenue - - -
External revenue 69,700 - 69,700 10,050 2,771 82,521
Result
Operating profit
before amortisation
and non-recurring
items 4,674 (1,910) 2,764 1,657 147 4,568
Intangible assets
amortisation (1,073) - (1,073) - - (1,073)
Non-recurring
administrative
expenses (945) (1,204) (2,149) (26) (1) (2,176)
Non-recurring
finance costs (13) (270) (283) - - (283)
Finance costs
(net) (96) (353) (449) (31) (24) (504)
Profit / (loss)
before tax 2,547 (3,737) (1,190) 1,600 122 532
Taxation (232) 315 83 (473) (39) (429)
Profit / (loss)for
the year 2,315 (3,422) (1,107) 1,127 83 103
Balance sheet
Total assets 82,383 452 82,835 7,050 1,543 91,428
Total liabilities 36,550 13,350 49,900 3,013 317 53,230
Other information
Capital expenditure 2,333 39 2,372 44 950 3,366
Depreciation 1,020 31 1,051 261 52 1,364
*The UK geographical segment has been further analysed between
Operations and Head Office components in order to aid comparability
to the 2013 analysis. Australia and Other segments have been
combined due to immateriality of the latter.
4. Finance costs (net)
Unaudited Unaudited
Six Six Audited
months months ended Year
ended 31st ended
31st March March 30th September
2013 2012 2012
GBP'000 GBP'000 GBP'000
Interest on bank loans and overdrafts 131 259 432
Bank interest receivable (29) - (20)
Interest on finance leases 284 10 92
Non-recurring finance costs (note
2) - - 198
Discounting of contingent consideration
(note 2) 169 13 85
555 282 787
5. Goodwill
The carrying amounts of goodwill relating to the Group's three
strategic segments are as follows:
Unaudited
Unaudited 31st Audited
31st March March 30th September
2013 2012 2012
GBP'000 GBP'000 GBP'000
Remediation 10,869 10,869 10,869
Decommissioning 8,659 - 8,659
Consulting 6,892 7,052 6,892
26,420 17,921 26,420
The Group tests goodwill annually for impairment or more
frequently if there are indications
that goodwill might be impaired. Goodwill is allocated for
impairment testing to Cash Generating
Units ("CGUs") which reflects how it is monitored for internal
management purposes. Value in
use is calculated using pre-tax cash flow projections based on
the financial budgets and business
plans covering a three year period, which take into account
historical trends and market
conditions, and which have been approved by the Board. The key
assumptions are those regarding
the discount rates and growth rates for the period. Management
estimates discount rates using
pre-tax rates that reflect current market assessments of the
time value of money and the risks
specific to the CGU's, equivalent to a real pre-tax discount
rate which averages 12%. The growth
rates are based on industry growth forecasts and long-term
growth in gross domestic product.
The Group prepares cashflow forecasts derived from the most
recent financial budgets approved
by management for the next three years and extrapolates cash
flows for the following years
based on the estimated annual growth rate. The rates do not
exceed the average long-term
growth rate for the relevant markets. The rates used to discount
the cash flows for all CGUs have
been based on the Group's weighted average cost of capital.
The Group's impairment review is sensitive to changes in the key
assumptions used. The major assumptions that result in significant
sensitivities are the revenue growth and the discount rate.
Given the Group's sensitivity analysis, a reasonably possible
change in a single assumption will
not result in further impairments.
6. Taxation
Unaudited
Unaudited Six months Audited
Six ended Year
months ended 31st ended
31st March March 30th September
2013 2012 2012
GBP'000 GBP'000 GBP'000
Current tax
United Kingdom corporation tax on
(losses) / profits for the period (1,168) 103 436
Overseas corporation tax 953 - 508
Adjustment in respect of prior periods - - (146)
Total current tax (215) 103 798
Deferred tax
Origination and reversal of temporary
differences (484) (22) (369)
Adjustment in respect of prior periods - - -
Total deferred tax (484) (22) 429
Total tax (credit) / charge (699) 81 429
The taxation credit for the six months ended 31st March 2013
comprises corporation tax on (losses)
/ profits of the period based on the expected effective tax rate
for the full financial year.
7. Earnings per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by
the weighted average number of ordinary shares during the
period, determined in accordance with the provisions of IAS 33
"Earnings per share".
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares
in issue on the assumption of conversion of all dilutive
potential ordinary shares. The Group has only
one category of dilutive potential ordinary shares, being share
options granted where the exercise price is less than the average
price of the Company's ordinary shares during the period.
Adjusted basic earnings per share is calculated by dividing the
earnings attributed to ordinary
shareholders, before intangible assets amortisation and
share-based payment charges, by the
weighted average number of ordinary shares during the
period.
Unaudited
UnauditedSix Six Audited
months months Year
ended ended ended
31st March 31st 30th September
2013 Basic Diluted March 2012 Basic Diluted 2012 Basic Diluted
GBP'000 p p GBP'000 p p GBP'000 p p
(Loss) / profit
attributable
to ordinary
shareholders (965) (0.3) (0.3) 193 0.1 0.1 103 0.0 0.0
Non-recurring
items,
impairments,
amortisation
and share based
payments 3,594 1.1 1.1 615 0.3 0.3 3,090 1.5 1.3
Profit for
adjusted
earnings per
share 2,629 0.8 0.8 808 0.4 0.4 3,193 1.5 1.3
The adjusted earnings per share has been reported in order that
the impact of the above charges against profit can be fully
appreciated.
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31st March 31st March 30th September
2013 2012 2012
Number Number Number
Number of shares
Weighted average number of ordinary shares
used in calculation of basic earnings per
share 313,503,054 180,839,717 218,557,295
Effect of dilutive potential ordinary shares:
Share options 13,870,382 2,882,270 14,310,730
Warrants held by Barclays Bank Plc 11,374,179 11,374,179 11,374,179
Weighted average number of ordinary shares
used in calculation of diluted earnings
per share 338,747,615 195,096,166 244,242,204
8. Net debt
Unaudited
Unaudited Six Audited
Six months months ended Year
ended 31st ended
31st March March 30th September
2013 2012 2012
GBP'000 GBP'000 GBP'000
Bank overdraft (2,839) (2,218) (496)
Cash at bank 6,445 1,660 4,456
Cash and cash equivalents 3,606 (558) 3,960
Bank loans (10,500) (5,713) (8,450)
Obligations under finance
leases (8,126) (396) (5,986)
Loan notes (750) - (750)
Net debt (15,770) (6,667) (11,226)
The Directors are responsible for the maintenance and integrity
of financial information on the Company's website. Legislation in
the United Kingdom governing the preparation and dissemination of
financial information differs from legislation in other
jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR NKQDNCBKDFAK
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