Reported figures for Silverdell (SID) don't tell the whole story. Strip out amortisation charges, non-recurring items and share-based payments, and the company's pre-tax profits actually trebled to £3.2m. True, this growth entirely reflected the contribution from EDS Group, acquired last June, and without it profits would have fallen. However, a 9 per cent rise in the order book to £238m, including £66m of work scheduled for the second half, and a record £300m pipeline of opportunities, is reassuring.
Silverdell's core business provides asbestos consulting and remediation contracting services, which is non-discretionary spending for many businesses. But the tough economic climate still resulted in one major contract deferral on the decommissioning side in the UK, although the effects were countered by a strong contribution from the company's Canadian and Australian operations. Even so, management was obliged to take on a number of less profitable contracts, including insulation and scaffolding, which dampened gross margins. However, this trend is expected to reverse, as much of the business scheduled for the second half is higher-margin work.
Broker FinnCap is maintaining full-year adjusted pre-tax profit forecasts at £9.3m, giving EPS of 2.1p (from £4.3m and 1.3p in 2012).
| SILVERDELL (SID) | ||||
|---|---|---|---|---|
| ORD PRICE: | 14.25p | MARKET VALUE: | £44m | |
| TOUCH: | 14-14.5p | 12-MONTH HIGH: | 21p | LOW: 10.75p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | na | |
| NET ASSET VALUE: | 12p* | NET DEBT: | 43% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 31.4 | 0.27 | 0.10 | nil |
| 2013 | 63.9 | -1.66 | -0.30 | nil |
| % change | +103 | - | - | - |
*Includes intangible assets of £32m, or 10p a share | ||||
