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Silverdell still shining

TIP UPDATE: The acquisition of EDS has helped Silverdell become a full service business with growth prospects
December 5, 2012

Hazardous waste specialist Silverdell (SID) is still digesting last year's acquisition of the EDS decommissioning and consulting company, which contributed to exceptional charges of £3.5m during the year practically wiping out reported profits. However, with underlying profits growth of 43 per cent to £4.3m, and investors receiving a maiden dividend, the company looks in good shape for 2013 as the pace of hazardous waste disposal, particularly from rapidly ageing nuclear power plants, accelerates.

IC TIP: Buy

Acquisitions had a clear effect on the balance of Silverdell's revenues, particularly in consultancy where sales increased by 74 per cent to £14.3m. However, the remediation business, which consults on property upgrades, is still the core part of Silverdell and sales were down slightly at £49.4m (2011: £51.5m). Just under half of these generated by the public sector so austerity is a risk. However, the growth of the industrials business within the remediation segment to 29 per cent of divisional revenues offset this, somewhat.

The year-end order book more than doubled to £219m, with £97m of work slated for 2013. Chief executive Sean Nutley said the acquisition of EDS had taken Silverdell away from being an asbestos removal specialist to a full-range business across several hazardous waste sectors and that the business should now be less seasonal as a result.

House broker Finncap forecasts pre-tax profits for 2013 £9.3m, giving EPS of 2.1p, (2012:£4.3m/1.3p)

SILVERDELL (SID)

ORD PRICE:13.38pMARKET VALUE:£41.9m
TOUCH:13.25-13.50p12-MONTH HIGH:15.25pLOW: 8.25p
DIVIDEND YIELD:1.3%PE RATIO:na
NET ASSET VALUE:12p*NET DEBT:29%

Year to 30 SepTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
200861.4-16.8-37.2nil
200959.5-6.87-7.30nil
201056.71.830.50nil
201159.72.461.10nil
201282.50.530.000.18
% change+38-78--

Ex-div: 11 Mar

Payment: 22 Mar

*Includes intangible assets of £33.6m, or 11p a share