Silverdell PLC

Trading and Strategic Update

RNS Number : 9079N
Silverdell PLC
04 October 2012
 



Silverdell PLC

("Silverdell" or "the Group")

 

Trading and Strategic Update

 

Silverdell Plc (AIM: SID), the Specialist Environmental Support Services group, today provides an update on trading for the year ended 30 September 2012. The Group will announce preliminary results for the year ended 30 September 2012 on Wednesday 5 December, at which it will announce an increase in revenues of more than 30% and its intention to pay a maiden dividend.

 

Trading Performance for the year ended 30 September 2012

 

The Group expects to report revenue of circa £78 million, an increase of more than 30% year on year.

 

Adjusted EBITDA* is expected to be 46% ahead of the previous year at around £6 million, with Consulting EBITDA* increased by approximately 30% on the same period last year and Remediation down approximately 15%. The decrease in Remediation EBITDA was the result of an unforeseen deferral of certain high margin shut down and refurbishment works expected in FY12. These works were deferred due to changing customer plans, but are now underway. Approximately £200,000 of the decrease relates to a small number of bad debt provisions resulting from customer bankruptcy. The corresponding adjusted fully diluted earnings per share is expected to fall in the range of 1.15-1.25 pence.

 

Senior net debt (excluding asset backed finance arrangements) is expected to be between £6 million and £7 million. The Group continues negotiations relating to its claim against a main contractor on a project completed in September 2011.

 

The enlarged Group is now in the process of tendering for large contracts in Australia, Canada, the UK, and mainland Europe where it has submitted a number of bids in respect of the decommissioning of oil and gas and pharmaceutical facilities. Silverdell anticipates reporting an order book at the end of October in excess of £200m, with over 75% of revenues scheduled to fall in 2013.

 

Update on Acquisitions

 

The integration of EDS Group Holdings ('EDS') is progressing in line with Management expectations. EDS had strong performance in the final quarter and the acquisition made an immediate contribution, with significant synergies and global cross-selling opportunities, particularly in Australia, Canada and the UK, being realised.

 

RDS and AH Allen, the specialist consultancy businesses acquired in 2011, have both been fully integrated and are performing well.

 

Dividend

 

As a mark of its confidence in the future growth prospects of the Group, the Board reconfirms its intention to recommend a maiden full year dividend for 2012 of between 0.15 pence and 0.2 pence per share, subject to normal approvals.

 

Magnox Contract Win

 

The late starting contracts referred to above included the £304 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 £3.2m order for works to commence immediately at the Magnox site at Chapelcross.

 

Strategic Update

 

Following the acquisition of EDS, Silverdell is now a unique provider of end-to-end decommissioning services with world-wide reach. The Group specialises in providing services in high hazard, highly regulated environments, working with global, blue chip customers who must protect their reputation for the highest standards of health and safety compliance.

 

By leveraging this global reach and enlarged suite of specialist services, the Board believes that the opportunity exists to grow organic revenues at 15% per year over the medium term, with EBITDA margins at around 10%. Particularly compelling growth opportunities exist in Australia, Canada -where the market for the provision of high hazard services is  fragmented - and mainland Europe.

Summary and Outlook

Silverdell has completed a successful year, significantly building on its reputation with blue chip organisations as a leading provider of decommissioning and remediation services to high hazard and regulated environments. Revenue and profit run-rates for the fourth quarter of FY 2012 give the Board confidence for the future and its expectations for 2013. The Group has a strong order book, robust pipeline of work, and sees compelling opportunities for growth in both domestic and  overseas markets where it can build on the foundations of strong customer relationships.

Sean Nutley, Chief Executive of Silverdell, commented:

"The future for Silverdell looks highly promising, with the opportunity now to build on strong UK relationships to grow our business abroad. The acquisition of EDS has given us a unique and compelling combined service offering and an ideal platform for future growth. Our decision to recommend a maiden dividend reflects our confidence as we look to the coming year and beyond."

*"Adjusted EBITDA" refers to EBITDA before non-recurring exceptional costs, amortisation and share based payment charges

04 October 2012

ENQUIRIES:

Silverdell Plc

Tel: + 44 20 7389 6827

Sean Nutley, Group Chief Executive


Ian Johnson, Chief Financial Officer




FinnCap

Tel: + 44 20 7220 0500

Marc Young (Corporate Finance)

Ben Thompson (Corporate Finance)


Victoria Bates (Corporate Broking)




College Hill

Tel: + 44 20 7457 2020

Helen Tarbet


Mark Garraway

       

 


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