Silverdell Plc Interim Report 2009 by ijk77032

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									   Silverdell Plc
 Interim Report
           2009




working closer by collaboration
About Silverdell Plc

The Silverdell Group provides managed solutions            Kitsons have achieved continued strong financial
for the asbestos, industrial remediation and               performance in the first half with nuclear, defence
environmental service industries. Working with             and utilities markets influential in its success, despite
partners in public, private, construction and industrial   a challenging market environment. Long term
markets, we are committed to creating an improved          frameworks that have been negotiated will assist
environment in which to live and work.                     in projected growth of Kitsons during the 2009
                                                           financial year.
The Group has developed into a leading
environmental services and regeneration organisation       Redhill Analysts
from its origins in asbestos and licensed waste. This      Redhill Analysts is renowned as one of the leading
has been achieved through growth in key market             asbestos consultancies in the UK. It continues to
sectors. These include the public sector, defence,         develop a wider environmental service offering
transport, utilities, construction, industrial, defence,   covering compliance and energy management.
and petrochemical markets which provide a diverse          Surveys, asbestos management strategies, project
range of commercial opportunities. A track record of       management and testing are the key asbestos related
winning and delivering some of the largest and most        services offered. Environmental management, energy,
challenging projects around the country is testament       carbon, geotechnical and remediation solutions have
to the technical knowledge of our people.                  been developed to augment these and to cater to
                                                           the wider environmental and waste management
This is the Group’s third interim report as a listed
                                                           markets. Its testing services are complemented
company and includes results from all three of
                                                           by recently introduced IT based compliance
the Group’s subsidiaries, Silverdell (UK) Limited
                                                           management systems. Redhill Analysts employs
(“Silverdell (UK)”), Redhill Analysts Limited (“Redhill
                                                           110 people and has offices in Gatwick, Birmingham,
Analysts”) and Kitsons Group Limited (“Kitsons”), for
                                                           Manchester and Cardiff.
the entire period.
                                                           In Redhill Analysts environmental solutions are
Kitsons
                                                           creating new cross-selling opportunities and form
Kitsons is a renowned multi-disciplinary contractor
                                                           part of the Group’s growth strategy.
providing industrial services, asbestos removal and
low-level nuclear decommissioning solutions. Its           Silverdell (UK)
scaffolding capabilities are capable of addressing the     Silverdell (UK) was established over 30 years ago and
most challenging projects, both large and small. Its       has become a leading asbestos removal contractor
thermal insulation division is long established and        capable of taking on wider principal contractor
supports clients seeking cost efficient environmental      roles embracing all elements of enabling works in
initiatives. The business earned a RoSPA Gold              both the public and private sectors. The business
Award during 2009 for the second consecutive year.         earned a RoSPA Gold Award in 2009 for the second
Kitsons currently employs in excess of 350 people          consecutive year. Silverdell (UK) employs 380 staff
and has 6 regional offices in Pembroke, Birmingham,        and has regional offices located in Southampton,
Aldermaston, Glasgow, Billingham and Rosyth and a          Cardiff, Exeter, Leicester, Bradford, London and its
head office in Warrington.                                 headquarters in Barking. Our unique SAFE training
                                                           division also trades as part of Silverdell (UK).
Contents
Financial Highlights                               1     Condensed Consolidated Balance Sheet                 8
Chairman’s Statement                               2     Condensed Consolidated Cash Flow Statement          10
Chief Executive’s Statement                        4     Notes to the Condensed Consolidated Interim
Condensed Consolidated Income Statement            6     Financial Statements                                11
Condensed Consolidated Statement of Recognised           Independent Review Report to the Members
Income and Expenses                            7         of Silverdell Plc                                   20




Financial Highlights

                                                       Unaudited             Unaudited              Audited
                                                        6 months              6 months                  year
                                                           ended                 ended                ended
                                                       31 March              31 March          30 September
                                                            2009                  2008                 2008
                                                              £m                    £m                   £m

Continuing operations:
Turnover                                                    29.7                  27.3                  61.4
Operating loss                                               (6.1)                 (0.6)               (15.9)
Adjusted operating profit *                                   0.2                   0.8                  1.6
Adjusted operating margin *                                 0.7%                  2.9%                 2.6%
                                                           pence                 pence                 pence
Adjusted earnings per share
Adjusted basic                                               (0.5)                  1.1                  0.6
Basic                                                       (14.4)                 (2.0)               (37.2)
Diluted                                                     (14.4)                 (2.0)               (37.2)
* before goodwill impairment, intangible assets amortisation, share-based payments and non-recurring items




                                                                                            Interim Report 2009   1
Chairman’s Statement

                                    Having recently joined the Silverdell Group as
                                    Executive Chairman, I am encouraged by the
                                    continuing level of enquiries from both the public
                                    sector and blue chip companies in the private
                                    sector. Whilst I am mindful of the fact that margins
                                    are inevitably under pressure, I believe that with
                                    continued focus on cost control and project
                                    discipline, we can look forward to achieving
                                    reasonable levels of profitability going forward.
                                    The Board structure has been significantly reduced
                                    with only one shareholder representative as a
                                    Non-Executive Director together with Sean Nutley
                                    as CEO. We are in the process of securing a new
                                    Finance Director to support Sean at Group level and
                                    further Non-Executive Directors.
                                    Recently we were successful in raising £5.5m in a
                                    placing which allowed us to renegotiate our bank
                                    facilities onto a more appropriate footing. The short-
                                    term facility of £3.25m was repaid in full in May 2009
                                    from the proceeds of the equity placing. We now
                                    have access to the funds to allow the Group to
                                    deliver its growth plans and to maximise its position
                                    in the market.




“
We now have access to the funds to allow the Group to deliver
its growth plans and to maximise its position in the market.
We have also reduced debt following the successful fund raising.



  2            Silverdell Plc
                                                                                ”
For the six months ended 31 March 2009 the                 Operating cash flow was strong with an inflow
Group achieved a turnover of £29.7m compared               of £1.9m in the period, compared with a £0.7m
with £27.3m in the previous year, an increase of           outflow in the six months ended 31 March 2008.
9%. The gross profit margin was 23.6%, compared            This reflects a continued focus on working capital
with 23.8% in the year ended 30 September 2008.            management. The improved cash flow served to
This margin is slightly lower than that reported in        reduce the net debt from £14.4m to £13.7m.
the first half of last year, but in more challenging
                                                           Each of the Group companies maintains a strong
trading conditions. Unfortunately the high level of
                                                           presence in their respective sectors, and I am
overhead combined with one off costs, including a
                                                           pleased to report that we continue to see a high level
goodwill impairment charge of £4.8m, meant that the
                                                           of repeat business which underlines the strength of
final result of a loss of £6.5m was worse than in the
                                                           the Group’s reputation. I am also encouraged by the
previous year.
                                                           commitment and experience of our staff in these
Whilst it is disappointing that the increase in turnover   challenging times which I feel sure will enable us to
has not translated into increased profitability, we are    realise the potential to increase sales whilst reducing
confident that changes made to the management              the cost base.
structure and the introduction of more disciplined
                                                           I would like to thank all the staff for their continued
project controls will result in enhanced performance
                                                           efforts in the first half of 2009.
and profitability going forward.


                                                           Stuart Doughty
                                                           Executive Chairman




                                                                                                  Interim Report 2009   3
Chief Executive’s Statement

                                   In the first half of the financial year, we have sought
                                   to put the Company in a stronger financial position so
                                   that it can embrace the increasingly challenging and
                                   competitive market conditions.
                                   We have an excellent track record of working with a
                                   wide range of clients in both the public and private
                                   sectors in a diverse portfolio of markets. Public sector
                                   works, industrial, nuclear, rail, defence, health,
                                   education feature prominently underpinned by the
                                   public purse, augmented by the wider construction,
                                   retail, and commercial sectors where we continue to
                                   add value on large and small scale projects.
                                   We continue to develop our strategic focus,
                                   embracing the growth opportunities for both the
                                   consultancy and contracting segments of our
                                   business. Our origins in licensed waste management
                                   continue to feature prominently. Asbestos remains
                                   the largest occupational killer in the UK and we strive
                                   to reduce the number of deaths caused by improving
                                   the quality of the environment in which we live and
                                   work. Environmental management, energy, carbon,
                                   geotechnical and remediation solutions have been
                                   developed to augment our capabilities as regulatory
                                   compliance continues to grow.




“
We have started the trading year with confidence and remain well
positioned to take advantage of new opportunities during the second
half of the year. Our origins in licensed waste management are now
augmented by wider environmental capabilities.


   4           Silverdell Plc                         ”
The successful fund raising has provided a                the trading year with confidence and remain well
substantial cash injection into the business. As a        positioned to take advantage of new opportunities
result we have been able to reduce debt and facilitate    during the second half of the year.
strategic and operational developments. We believe
                                                          Kitsons have achieved strong financial performance
that this, combined with more efficient working
                                                          in the first half with nuclear, defence and utilities
capital management, provides the business with a
                                                          markets influential in its success. Long term
solid foundation from which to grow.
                                                          frameworks which have been negotiated will assist
The Board will continue to implement our strategy,        Kitsons in dealing with challenging market conditions.
ensure that the right leadership is in place to deliver
                                                          Redhill Analysts are trading broadly in line
agreed business plans and monitor performance
                                                          with financial expectation. Market and service
against these targets. We are continuing to reduce
                                                          development strategies will enable longer term growth
operating costs in each of our businesses to
                                                          opportunities outside of the asbestos industry to be
improve efficiency.
                                                          achieved. Investments to enhance these capabilities
I am delighted with the appointment of Stuart             are being made currently.
Doughty CMG as Chairman of the Group. Until
                                                          Silverdell’s turnover has been affected by the
recently Stuart was Chief Executive Officer of
                                                          market climate in the first half, partly due to
Costain Group Plc. He brings over 40 years’
                                                          market conditions affecting the construction
experience in the construction industry, during
                                                          industry, although retention of clients remains high.
which time he served as a director of Hyder Plc,
                                                          Management have reduced costs, particularly in
Alfred McAlpine Construction Limited and Tarmac
                                                          relation to staff and overheads within the business in
Construction Limited and as Managing Director of
                                                          response to these economic changes.
John Laing Construction Limited.
                                                          Sean Nutley
We continue to build on the forward order book and
                                                          Group Chief Executive
develop sales opportunities, despite the current
uncertain economic environment. We have started




                                                                                               Interim Report 2009   5
Condensed Consolidated Income Statement
for the 6 months ended 31 March 2009



                                                        Unaudited          Unaudited
                                                           before      non–recurring
                                                    non–recurring              items,
                                                            items,   impairments and
                                                  impairments and       amortisation
                                                     amortisation         (see note 4)   Unaudited   Unaudited         Audited
                                                         6 months           6 months      6 months    6 months              year
                                                            ended              ended         ended       ended           ended
                                                        31 March            31 March     31 March    31 March     30 September
                                                             2009               2009          2009        2008            2008
                                           Note             £’000              £’000         £’000       £’000            £’000
Revenue                                      2             29,681                   –      29,681       27,332           61,378
Cost of sales                                             (22,690)                  –     (22,690)     (20,090)         (46,793)
Gross profit                                                6,991                   –       6,991        7,242           14,585
Administrative expenses                                    (6,916)                         (6,916)      (6,631)         (13,144)
– impairment of goodwill                                        –             (4,802)      (4,802)           –          (14,653)
– amortisation of intangible assets                             –               (871)        (871)      (1,260)          (2,151)
– non-recurring expenses                                        –               (490)        (490)           –             (520)
Operating profit/(loss)                      2                 75             (6,163)      (6,088)       (649)          (15,883)
Finance income                               3                  –                  –            –          33                42
Finance costs                                3               (414)              (225)        (639)       (511)             (963)
Loss before tax                                              (339)            (6,388)      (6,727)      (1,127)         (16,804)
Taxation credit                              6                  1                244          245          224              231
Loss for the period                          9               (338)            (6,144)      (6,482)       (903)          (16,573)




     6                    Silverdell Plc
Condensed Consolidated Statement of Recognised Income and Expenses
for the 6 months ended 31 March 2009



                                                            Unaudited           Unaudited             Audited
                                                             6 months            6 months                  year
                                                                ended               ended               ended
                                                            31 March            31 March         30 September
                                                                 2009                2008                2008
                                                     Note       £’000               £’000                £’000
Net income/(expense) recognised directly in equity     9         104                     (110)             (92)
Loss for the financial period                                 (6,482)                    (903)         (16,573)
Total recognised income and expense                           (6,378)               (1,013)            (16,665)




                                                                   Interim Report 2009                7
Condensed Consolidated Balance Sheet
as at 31 March 2009



                                                      Unaudited   Unaudited         Audited
                                                      31 March    31 March     30 September
                                                          2009        2008             2008
                                               Note      £’000       £’000             £’000
Non-current assets
Goodwill                                         5      16,174      35,395           20,976
Other intangible assets                                  1,473       3,632            2,343
Property, plant and equipment                            2,610       2,821            2,809
Trade and other receivables                              1,001       1,001            1,001
                                                        21,258      42,849           27,129
Current assets
Inventories and work in progress                         2,122       3,042            1,163
Trade and other receivables                             13,424      12,014           16,562
Cash and cash equivalents                                    –           6               17
                                                        15,546      15,062           17,742
Total assets                                            36,804      57,911           44,871
Non-current liabilities
Borrowings                                             (10,258)     (11,383)        (11,170)
Deferred tax liabilities                                  (396)        (850)           (728)
Trade and other payables                                (1,001)      (1,001)         (1,001)
Other financial liabilities                               (128)           –               –
                                                       (11,783)     (13,234)        (12,899)




     8                        Silverdell Plc
Condensed Consolidated Balance Sheet continued
as at 31 March 2009



                                                 Unaudited           Unaudited          Audited
                                                 31 March            31 March      30 September
                                                     2009                2008              2008
                                       Note         £’000               £’000              £’000
Current liabilities
Borrowings                                         (3,411)               (3,379)           (3,241)
Trade and other payables                           (9,070)               (6,152)           (9,139)
Other financial liabilities                           (57)                  (66)              (41)
Deferred consideration                                  –                     –              (334)
Current taxation liabilities                            –                  (366)             (255)
                                                  (12,538)               (9,963)        (13,010)
Total liabilities                                 (24,321)              (23,197)        (25,909)
Net assets                                         12,483               34,714             18,962
Equity
Share capital                            9          4,165                4,165            4,165
Share premium account                    9         13,649               13,649           13,649
Equity reserve                           9            518                  511              411
Hedging reserve                          9           (134)                 (48)             (30)
Other reserve                            9         16,635               16,635           16,635
Retained earnings                        9        (22,350)                (198)         (15,868)
Total equity                                       12,483               34,714             18,962




                                                        Interim Report 2009            9
Condensed Consolidated Cash Flow Statement
for the 6 months ended 31 March 2009



                                                               Unaudited        Unaudited            Audited
                                                          6 months ended   6 months ended         year ended
                                                          31 March 2009     31 March 2008 30 September 2008
                                                                   £’000            £’000              £’000
Cash flows from operating activities
Operating loss                                                   (6,088)            (649)            (15,883)
Impairment of goodwill                                            4,802                –              14,653
Amortisation of intangibles                                         871            1,260               2,151
Profit on the sale of property, plant and equipment                   –               (4)                (38)
Depreciation of property, plant and equipment                       375              395                 848
Share-based payments                                                107              128                 212
Movements in working capital:
(Increase)/decrease in inventories and work in progress            (959)           (1,736)               143
Decrease/(increase) in trade and other receivables                3,138             4,295               (217)
Decrease in trade and other payables                                (94)           (2,725)            (1,258)
Cash generated from operations                                    2,152               964                611
Income tax paid                                                    (302)           (1,695)            (1,993)
Net cash inflow/(outflow) from operating activities               1,850             (731)             (1,382)
Cash flows from investing activities
Payments for property, plant and equipment                         (187)             (208)              (675)
Proceeds from sale of property, plant and equipment                  11                25                 86
Acquisition of subsidiaries                                        (334)           (5,103)            (3,239)
Net cash acquired with subsidiaries                                   –               372                372
Net cash outflow from investing activities                         (510)           (4,914)            (3,456)
Cash flows from financing activities
Interest paid                                                      (615)            (485)               (910)
Interest paid on finance leases                                     (24)             (26)                (53)
Interest received                                                     –               33                  42
Payments for hire purchase principals                              (201)            (263)               (509)
Proceeds from bank loans                                              –            4,750               4,150
Repayments of bank loans                                           (902)            (750)             (1,050)
Net cash (outflow)/inflow from financing activities              (1,742)           3,259              1,670
Net decrease in cash and cash equivalents                          (402)           (2,386)            (3,168)
Cash and cash equivalents at beginning of the period             (1,750)           1,418              1,418
Cash and cash equivalents at end of the period                   (2,152)            (968)             (1,750)



    10                    Silverdell Plc
Notes to the Condensed Consolidated Interim Financial Statements
for the 6 months ended 31 March 2009



1.   Basis of preparation
     Silverdell plc is a public limited company incorporated in the United Kingdom under the Companies Act 1985. 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 31 March 2009 have been prepared in accordance with the
     accounting policies expected to be applied to the full year financial statements for the year ending 30 September 2009, 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 but have been reviewed and do not constitute statutory accounts within the meaning of
     section 435 of the Companies Act 1985. The financial information for the year ended 30 September 2008 has been extracted from the
     audited Annual Report and Accounts which have been filed with the Registrar of Companies. 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 30 September 2008.

     The figures for the six months ended 31 March 2008 have been extracted from the interim results for that period. The auditors have
     made a report under section 235 of the Companies Act 1985 on the statutory accounts for the year ended 30 September 2008. The
     report was unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. It did, however,
     include a reference to material uncertainty in respect of going concern by way of emphasis of matter. Please refer below for an update on
     this position.

     Two interpretations issued by the IFRIC are effective for the current period. These are:

     IFRIC13 “Customer loyalty programmes”

     IFRIC15 “Hedges of a net investment in a foreign operation”

     The adoption of these interpretations has not resulted in any material changes to the Group’s accounting policies.

     Going concern
     Subsequent to the year end, the Group successfully completed an equity placing raising funds of £5.5m and finalised revised banking
     facilities with its bankers (see note 10). The Group continues to meet its day to day working capital requirements through its banking
     facilities, which are due to expire in 2012. The current economic conditions do create some uncertainty and the Group’s borrowings
     do fluctuate, but the successful post balance sheet refinancing and the continued planned actions on improving working capital
     management have resulted in significant reductions in net debt after the period end. Further the Group has a number of long term
     contracts, with customers and suppliers across different geographic areas and industries. As a consequence the Directors believe that the
     Group is well placed to manage its business risks successfully despite the current economic outlook.

     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 Annual Report
     and Accounts.
                                                                                                Interim Report 2009                 11
Notes to the Condensed Consolidated Interim Financial Statements continued
for the 6 months ended 31 March 2009



2.   Segmental reporting
     Management consider that the Group comprises two segments – Asbestos Remediation and Consultancy Services.

     6 months ended 31 March 2009
                                                              Asbestos        Consultancy
                                                            remediation          services          Unallocated    Group
                                                                 £’000             £’000                 £’000    £’000
     Revenue
     Total revenue                                              26,771              3,300                    –    30,071
     Less: between segments                                       (178)              (212)                   –      (390)
     External revenue                                           26,593              3,088                    –    29,681
     Result
     Operating profit before amortisation and
       non-recurring items                                         822                171                 (918)       75
     Intangible assets amortisation                               (700)              (171)                   –      (871)
     Goodwill impairment loss                                   (4,802)                 –                    –    (4,802)
     Non-recurring operating expenses                              (57)              (100)                (333)     (490)
     Finance costs (including non-recurring bank charges)          (21)                (9)                (609)     (639)
     Profit/(loss) before tax                                   (4,758)              (109)              (1,860)   (6,727)
     Taxation                                                      189                  4                   52       245
     Profit/(loss) for the period                               (4,569)              (105)              (1,808)   (6,482)


                                                              Asbestos        Consultancy
                                                            remediation          services          Unallocated    Group
                                                                 £’000             £’000                 £’000    £’000
     Balance sheet
     Total assets                                               26,853              8,709                1,242    36,804
     Total liabilities                                          10,778              1,031              12,512     24,321
     Other information
     Capital expenditure                                           155                 32                    –      187
     Depreciation                                                  292                 83                    –      375




     12                    Silverdell Plc
2.   Segmental reporting (continued)
     6 months ended 31 March 2008
                                                  Asbestos    Consultancy
                                                remediation      services          Unallocated            Group
                                                     £’000         £’000                 £’000            £’000
     Revenue
     Total revenue                                  24,459         2,873                        –     27,332
     Less: between segments                              –             –                        –          –
     External revenue                               24,459         2,873                        –     27,332
     Result
     Operating profit before amortisation and
       non-recurring items                             981           405                     (775)           611
     Intangible assets amortisation                   (887)         (373)                       –         (1,260)
     Finance income                                     28             –                        5             33
     Finance costs                                     (38)          (13)                    (460)          (511)
     Profit/(loss) before tax                           84            19                (1,230)           (1,127)
     Taxation                                          (17)           (4)                  245               224
     Profit/(loss) for the period                       67            15                     (985)         (903)


                                                  Asbestos    Consultancy
                                                remediation      services          Unallocated            Group
                                                     £’000         £’000                 £’000            £’000
     Balance sheet
     Total assets                                   48,436         9,357                     118      57,911
     Total liabilities                              10,250           635               12,312         23,197
     Other information
     Capital expenditure                               175            33                        –           208
     Depreciation                                      279           116                        –           395




                                                                       Interim Report 2009           13
Notes to the Condensed Consolidated Interim Financial Statements continued
for the 6 months ended 31 March 2009



2.   Segmental reporting (continued)
     Year ended 30 September 2008
                                                  Asbestos    Consultancy
                                                remediation      services   Unallocated    Group
                                                     £’000         £’000          £’000    £’000
     Revenue
     Total revenue                                  55,680         5,871             –    61,551
     Less: between segments                             (4)         (169)            –      (173)
     External revenue                               55,676         5,702             –    61,378
     Result
     Operating profit before amortisation and
       non-recurring items                           1,856           649        (1,064)     1,441
     Intangible assets amortisation                 (1,681)         (470)            –     (2,151)
     Goodwill impairment loss                      (13,554)       (1,099)            –    (14,653)
     Non-recurring expenses                              –             –          (520)      (520)
     Finance income                                     34             1             7         42
     Finance costs                                     (83)          (25)         (855)      (963)
     Loss before tax                               (13,428)         (944)       (2,432)   (16,804)
     Taxation                                         (304)          (68)          603        231
     Loss for the period                           (13,732)       (1,012)       (1,829)   (16,573)


                                                  Asbestos    Consultancy
                                                remediation      services   Unallocated    Group
                                                     £’000         £’000          £’000    £’000
     Balance sheet
     Total assets                                   35,692         8,021         1,158    44,871
     Total liabilities                              11,582           933        13,394    25,909
     Other information
     Capital expenditure                             1,180            45             –     1,225
     Depreciation                                      623           225             –       848




     14                    Silverdell Plc
3.   Finance income and finance costs
                                                                                 6 months ended       6 months ended             Year ended
                                                                                      31 March             31 March            30 September
                                                                                           2009                 2008                   2008
                                                                                          £’000                £’000                   £’000
     Finance income
     Interest receivable on bank deposits                                                      –                     33                    42
     Finance costs
     Interest on bank loans and overdrafts                                                  (390)                   (485)                (910)
     Interest on finance leases                                                              (24)                    (26)                 (53)
     Total before non-recurring items                                                       (414)                   (511)                (963)
     Non-recurring bank charges (see note 4)                                                (225)                      –                    –
     Total finance costs                                                                    (639)                   (511)                (963)


4.   Non-recurring items, impairments and amortisation
                                                                                 6 months ended       6 months ended             Year ended
                                                                                      31 March             31 March            30 September
                                                                                           2009                 2008                   2008
                                                                                          £’000                £’000                   £’000
     Administrative expenses
     Goodwill impairment                                                                  (4,802)                    –               (14,653)
     Amortisation of intangible assets                                                      (871)               (1,260)               (2,151)
     Non-recurring expenses                                                                 (490)                    –                  (520)
                                                                                          (6,163)               (1,260)              (17,324)
     Finance costs
     Non-recurring bank charges                                                             (225)                      –                    –
     Impact on profit/(loss) before tax                                                   (6,388)               (1,260)              (17,324)

     The goodwill impairment charge is explained in more detail in note 5.

     The non-recurring expenses incurred in the six months ended 31 March 2009 comprised severance costs of £290,000 and professional
     fees associated with the renegotiation of the Group’s banking facilities of £200,000. There were also non-recurring bank charges of
     £225,000 incurred in the interim period pending agreement of the revised facilities. The non-recurring expenses in the year ended
     30 September 2008 were costs associated with the renegotiation of banking facilities.

     The goodwill impairment charge has no impact on the tax credit for the period. The amortisation charge on intangible assets gave rise to
     a deferred tax credit of £244,000.
                                                                                              Interim Report 2009                   15
Notes to the Condensed Consolidated Interim Financial Statements continued
for the 6 months ended 31 March 2009



5.   Goodwill
     The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired. The
     recoverable amounts of Cash Generating Units (“CGUs”) are determined from value in use calculations. The key assumptions are
     those regarding the discount rates and growth rates for the period. Management estimates using pre-tax rates that reflect current
     market assessments of the time value of money and the risks specific to the CGUs. The rate applied is 12%. The discount rate has
     been determined based on the Group’s weighted average cost of capital. 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.

     While not adversely affecting the Group’s overall projected financial performance, the revised projections, which were used for the
     purpose of the equity fund raising and bank refinancing, did amend the relative contributions of the CGUs. In particular, the projection for
     the Kitsons CGU were adversely affected by the continued challenging market conditions. The impairment loss of £4,802,000 represents
     the only increment in goodwill during the six months ended 31 March 2009.

     The carrying amounts of goodwill relating to the Group’s two business segments are as follows:

                                                                                        31 March               31 March          30 September
                                                                                           2009                    2008                  2008
                                                                                           £’000                  £’000                  £’000
     Asbestos remediation                                                                  10,888                29,010                 15,690
     Consultancy services                                                                   5,286                 6,385                  5,286
                                                                                           16,174                35,395                 20,976


6.   Taxation
                                                                                  6 months ended        6 months ended             Year ended
                                                                                       31 March              31 March            30 September
                                                                                            2009                  2008                   2008
                                                                                           £’000                 £’000                   £’000
     Current tax
     Corporation tax on profits for the period                                                   –                     5                   (351)
     Adjustment in respect of prior periods                                                    (22)                    –                     36
     Total current tax                                                                         (22)                    5                   (315)
     Deferred tax
     Origination and reversal of temporary differences                                        267                    219                    546
     Total tax for the period                                                                 245                    224                    231


     The taxation credit for the six months ended 31 March 2009 has been calculated at 13.8% (2008: 19.9%). The effective rate has been
     applied to the loss before tax for the period, excluding the significant non-deductible goodwill impairment charge.

     16                   Silverdell Plc
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. However,
     these share options are anti-dilutive as the Group is loss-making during the period.

     Adjusted basic earnings per share is calculated by dividing the earnings attributed to ordinary shareholders, before intangible assets
     amortisation, share-based payment charges and non-recurring expenses, by the weighted average number of ordinary shares during
     the period.
                                          Unaudited                          Unaudited                            Audited
                                        6 months to                         6 months to                        year ended
                                          31 March                           31 March                       30 Sepember
                                               2009       Basic     Diluted       2008       Basic     Diluted       2008      Basic    Diluted
                                              £’000            p          p      £’000           p           p      £’000          p          p
     Loss attributable to
      ordinary shareholders                   (6,482)      (14.4)     (14.4)      (903)       (2.0)       (2.0)    (16,573)    (37.2)        (37.2)
     Non-recurring items,
     impairment, amortisation and
      share-based payments                     6,250       13.9        13.9      1,388         3.1         3.1     16,857       37.8         37.2
     Profit for adjusted earnings per share     (232)       (0.5)      (0.5)       485         1.1         1.1         284        0.6           0.0

     The adjusted numbers have been reported in order that the impact of the above charges against profit/(loss) can be fully appreciated.

                                                                                   6 months ended        6 months ended             Year ended
                                                                                        31 March              31 March            30 September
                                                                                             2009                  2008                   2008
                                                                                          Number                Number                 Number
     Number of shares
     Weighted average number of ordinary shares
       used in calculation of basic earnings per share
     (including contingently issuable shares)                                         44,874,838             44,296,308             44,550,187
     Effect of dilutive potential ordinary shares:
     Share options                                                                               –               1,246,445              708,936
     Weighted average number of ordinary shares used
      in calculation of diluted earnings per share                                    44,874,838             45,542,753             45,259,123


                                                                                                 Interim Report 2009                    17
Notes to the Condensed Consolidated Interim Financial Statements continued
for the 6 months ended 31 March 2009



8.   Net debt
                                                              6 months ended     6 months ended            Year ended
                                                                   31 March           31 March           30 September
                                                                        2009               2008                  2008
                                                                       £’000              £’000                  £’000
     Bank overdraft                                                   (2,152)                (974)               (1,767)
     Cash at bank                                                          –                    6                    17
     Cash and cash equivalents                                        (2,152)                (968)               (1,750)
     Bank loans                                                      (11,200)             (13,000)              (12,102)
     Obligations under finance leases                                   (317)                (788)                 (542)
                                                                     (13,669)             (14,756)              (14,394)


9.   Reconciliation of movements in equity
     6 months ended 31 March 2009                  Share     Share     Other     Equity   Hedging Retained
                                                  capital premium    reserve    reserve    reserve earnings        Total
                                                   £’000     £’000     £’000      £’000      £’000   £’000        £’000
     At 1 October 2008                            4,165    13,649    16,635        411        (30)   (15,868)   18,962
     Net profit/(loss) for the period                 –         –         –          –          –     (6,482)   (6,482)
     Change in fair value of interest rate swap       –         –         –          –       (144)         –      (144)
     Tax on items taken to equity                     –         –         –          –         40          –        40
     Total recognised loss for the period             –         –          –         –       (104)    (6,482)    (6,586)
     Share-based payments including tax               –         –          –       107          –          –        107
     At 31 March 2009                             4,165    13,649    16,635        518       (134)   (22,350)   12,483

     6 months ended 31 March 2008                  Share     Share     Other     Equity   Hedging Retained
                                                  capital premium    reserve    reserve    reserve earnings        Total
                                                   £’000     £’000     £’000      £’000      £’000   £’000        £’000
     At 1 October 2007                            4,068    13,649    15,233        368         62       705     34,085
     Net profit/(loss) for the period                 –         –         –          –          –      (903)      (903)
     Change in fair value of interest rate swap       –         –         –          –       (152)        –       (152)
     Tax on items taken to equity                     –         –         –          –         42         –         42
     Total recognised loss for the period             –         –         –          –       (110)     (903)     (1,013)
     Shares issued                                   97         –     1,402          –          –         –       1,499
     Share-based payments including tax               –         –         –        143          –         –         143
     At 31 March 2008                             4,165    13,649    16,635        511        (48)     (198)    34,714

     18                  Silverdell Plc
9.   Reconciliation of movements in equity (continued)
     Year ended 30 September 2008
                                                                                        Share     Share               Other         Equity      Hedging Retained
                                                                                       capital premium              reserve        reserve       reserve earnings              Total
                                                                                        £’000     £’000               £’000          £’000         £’000   £’000              £’000
     At 1 October 2007                                                                  4,068        13,649         15,233             368             62         705      34,085
     Net profit/(loss) for the period                                                       –             –              –               –              –     (16,573)    (16,573)
     Change in fair value of interest rate swap                                             –             –              –               –           (127)          –        (127)
     Tax on items taken to equity                                                           –             –              –               –             35           –          35
     Total recognised loss for the period                                                    –               –            –               –           (92)    (16,573)    (16,665)
     Shares issued                                                                          97               –        1,402               –             –           –       1,499
     Share-based payments including tax                                                      –               –            –              43             –           –          43
     At 30 September 2008                                                               4,165        13,649         16,635             411            (30)    (15,868)    18,962

10. Subsequent events
     Subsequent to the period end on 18 May 2009 the Group completed a placing of 110 million new ordinary shares at 5p per share, raising
     cash funds of £5.5m before expenses. In preparation for the placing, the Company’s ordinary shares of 10p each were divided into
     ordinary shares of 1p and deferred shares of 9p in a capital reorganisation. Each shareholder’s proportionate interest in the Company’s
     equity was unchanged as a result.

     On 15 May 2009 the Group finalised amended banking facilities with its bankers. The revised bank facilities comprise a short-term
     facility of £3.25m due for repayment on or before 30 June 2009, a £5.95m amortising term loan due for repayment on or before
     31 December 2011, a £2m bullet term loan due for repayment on 31 December 2011 and a £2m overdraft facility. Under the agreement
     the Group also granted its bankers a warrant enabling them to subscribe for up to 10% of the enlarged share capital after the placing.

     The short-term facility of £3.25m was repaid in full during May 2009 from the proceeds of the equity placing. The interest rates applicable
     to the remaining new banking facilities range from 3.5% to 3.75% above LIBOR.




     The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website.

     Legislation in the United Kingdom governing the preparation and disseminaton of financial information differs from legislation in other jurisdictions.




                                                                                                                           Interim Report 2009                           19
Independent Review Report to the Members of Silverdell Plc

We have been engaged by Silverdell Plc (“the Company”) to review the Group condensed set of financial statements in the half-yearly financial
report for the six months ended 31 March 2009 which comprises the consolidated income statement, the consolidated balance sheet, the
consolidated statement of recognised income and expense, the consolidated cash flow statement and related notes 1 to 10. We have read
the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 ‘Review
of Interim Financial Information Performed by the Independent Auditor of the Entity’ issued by the Auditing Practices Board. Our work has
been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our
review work, for this report, or for the conclusions we have formed.
Directors’ responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the
half-yearly financial report in accordance with the AIM Rules of the London Stock Exchange.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European
Union. The condensed set of financial statements included in this half-yearly financial report have been prepared in accordance with the
accounting policies the Group intends to use in preparing its next annual financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report
based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 ‘Review of Interim
Financial Information Performed by the Independent Auditor of the Entity’ issued by the Auditing Practices Board for use in the United
Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the
half-yearly financial report for the six months ended 31 March 2009 is not prepared, in all material respects, in accordance with the AIM Rules
of the London Stock Exchange.
Deloitte LLP
Chartered Accountants and Statutory Auditors
London, United Kingdom
25 June 2009




    20                    Silverdell Plc
Silverdell (UK) Ltd        Redhill Analysts         Kitsons Environmental                  SAFE
 Asbestos Removal         Asbestos Consultancy         Asbestos Removal           Modular training system
     Demolition          Asbestos Management       Nuclear Decommissioning                for staff
Principal Contractor       Asbestos Surveying         Scaffolding / Access        Mobile training solution
Strip Out Demolition     Air Monitoring (UKAS)    Thermal Insulation, Surface    for responsible persons in
  Rail Engineering        Project Management        Protection and Coatings        response to CAR 2006
   Waste Transfer        Tender Documentation              Demolition                    (Control of
                            Software Solutions    Deconstruction / Dismantling     Asbestos Regulations)
Key market sectors:     Task / Risk Assessments
   Public Sector
                                 Training
                                                     Key market sectors:
   Construction                                         Nuclear Industry
                              Expert Witness
 Retail and Leisure                                    Industrial Sectors
                           Management Plans
 Insurance Repair                                        Public Sector
                       Environmental Management
      Utilities                                           Construction
                         Remediation and Waste
         Rail                                               Utilities
                             Liability Transfer
  Social Housing                                             Retail
                          Key market sectors:               Defence
                             Public Sector             Power Generation
                             Construction                Petrochemical
                                 Retail
                           Insurance Repair
                                Utilities
                                 NHS
                               Housing
Silverdell PLC
14 Buckingham St London WC2N 6DF Tel 020 7004 2744


www.silverdell.plc.uk

Registered Office: 20 Blackfriars Lane, London EC4V 6HD

								
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