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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Silverdell | LSE:SID | London | Ordinary Share | GB00B12XK814 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 12.75 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
TIDMSID
RNS Number : 7480S
Silverdell PLC
05 December 2012
Silverdell Group PLC
("Silverdell" or the "Group")
Preliminary results for the year ended 30 September 2012
Silverdell plc (AIM: SID), the Specialist Environmental Support Services group reports preliminary results for the full year ended 30 September 2012.
Financial Highlights
-- Revenue up 38% to GBP82.5m (2011: GBP59.7m) -- Gross profit up 27% at GBP20.4m (2011: GBP16.1m**) -- Adjusted EBITDA* up 51% to GBP6.2m (2011: GBP4.1m) -- Adjusted pre-tax profit* up 43% at GBP4.3m (2011: GBP3.0m) -- Adjusted EPS* up 7% at 1.5p (2011: 1.4p) -- Net senior debt (excluding lease finance) down GBP0.5m to GBP4.5m (2011: GBP5.0m) -- Recommendation of maiden dividend of 0.175 pence per share to be paid in March 2013 * Before non-recurring items, impairment charges, amortisation and share based payments.
** As restated for the reclassification of certain depreciation charges previously classified as administrative expenses
Operational Highlights
-- Transformational acquisition of EDS and associated equity fundraising of GBP8.5m -- Group is now a provider of end-to-end decommissioning services with world-wide reach -- Contracts secured during the period include:
o Decommissioning / disinvestment contract worth approx. GBP10.7m in Ontario, Canada
o Dismantling contract worth approx. GBP2.2m in Quebec
o GBP0.5m of major retail infrastructure works in the UK
-- Commencement of the Magnox framework contract with an initial order for works worth GBP3.2m
-- Streamlined Group structure, delivering operational efficiencies and savings of GBP1.2m per annum
-- Order book up 105% to GBP219m at 31(st) October 2012 (31(st) October 2011: GBP107m), GBP97m of which is scheduled to fall in 2013.
-- Current trading is in line with the Board's expectations and current level of tendering activity is high
-- Q4 trading particularly strong with combined August and September revenues of GBP24.8m (August and September 2011: GBP11.6m).
Commenting on the results, Chairman Stuart Doughty said:
"This has been a transformational year for Silverdell. We have acquired and are in the process of integrating EDS, secured significant new contracts, and streamlined and strengthened our management structure to give us an international platform for the future.
"We have in place a sound strategy for growth supported by clear and achievable KPIs. Our belief in the excellent long term prospects for the Group is underlined by our recommendation of a maiden dividend. Current trading is encouraging and our focus now is on delivery. Mindful always of challenging global economic conditions, we look forward to the future with confidence."
ENQUIRIES:
Silverdell Group PLC Tel: 020 7004 2741 Sean Nutley, Chief Executive Ian Johnson, Finance Director College Hill (Public Relations) Tel: 020 7457 2020 Mark Garraway Helen Tarbet finnCap (Broker & Nominated Advisor) Tel. 020 7220 0500 Marc Young/ Ben Thompson (Corporate finance) Simon Johnson/Victoria Bates (Corporate broking)
CHAIRMAN'S STATEMENT
Overview
I am pleased to report a positive set of results for the year ended 30th September 2012; a year which has seen Silverdell become a specialist environmental support services group with global reach. On 18th June 2012 we acquired decommissioning and dismantling provider EDS Group Holdings Ltd ("EDS") for an initial consideration of GBP15m funded by the issue of shares and a successful share placing of GBP8.5m. At the same time we negotiated new, extended banking facilities with HSBC. The acquisition of EDS has given Silverdell immediate scale, global reach and a platform from which to leverage significant future growth. The acquisition has proved immediately earnings enhancing and the enlarged group has already secured significant international contract wins with a healthy pipeline of further opportunities.
Strategy
Alongside its traditional environmental services offering, Silverdell is now a unique provider of end-to-end decommissioning, dismantling and remediation services, with global reach, and a particularly strong presence in the UK, Canada and Australia. These markets have stringent legislation and regulation governing the management and disposal of hazardous materials in both the heavy industrial and the built environment, and this is the key driver for our business. Our customers are predominantly blue-chip, multinational groups operating in the power generation, chemical, oil & gas, pharmaceutical, petrochemical and fuel industries as well as large retailers and public sector organisations. They need safe, compliant and highly specialised solutions for the decommissioning of their industrial legacy, and Silverdell is one of the few companies worldwide offering our particular suite of services to deal with these often complex and dangerous legacy assets.
As well as maximising the opportunities we have to offer a broader range of services to our enhanced blue chip customer base, we see further opportunities to expand our presence organically further into Canada and Australia, and to develop new services such as a discrete Consulting business in Canada. In the UK, in addition to our asbestos remediation services, we are growing our capability as a supplier of high hazard industrial maintenance and support services to our existing client base within a number of framework contracts. We also see exciting opportunities in Continental Europe as various governments outline plans to decommission first and second generation nuclear power stations and replace them with conventional energy generation facilities. Further detail on our growth plans is set out in the Chief Executive's Strategic Review.
Economic conditions are challenging and are expected to remain so, as clients increasingly seek more value for money from their suppliers. Despite this, we are confident that our reputation for excellence, coupled with the increasingly stringent regulatory and legislative imperatives regarding the management and disposal of hazardous materials, will continue to drive our business and provide us with opportunities for growth.
Results
Revenues for the year ended 30 September 2012 were GBP82.5m (2011: GBP59.7m) with adjusted EBITDA* of GBP6.2m (2011: GBP4.1m). Operating profit was GBP1.3m and adjusted pre-tax profit** was GBP4.3m (2011: GBP3.0m), impacted in part by the deferral of certain shutdown and refurbishment works and by some lower margin work undertaken in our Consulting division. As at 31st October 2012 the order book was GBP219m (31st October 2011: GBP107m), with GBP97m scheduled to fall in 2013. Adjusted basic earnings per share were 1.5 pence (2011: 1.4 pence). At the year end, the Company's net senior debt was GBP4.5m (2011: GBP5.0m) with an additional GBP6m (2011: GBP0.2m) of asset-backed finance. During the period we re-financed the Group with a new, more competitive, three-year term with HSBC, affording the Group reduced overall financing costs, improved covenant terms and a global banking relationship.
Dividend
We are today recommending a maiden dividend of 0.175 pence per share, which will be paid on 22 March 2013 to shareholders on the register at the close of business on 13 March 2013 and is subject to approval by shareholders at the Company's Annual General Meeting which will be held on 7 March 2013. The Corresponding record date for the dividend will be 15 March 2013.
Board & People
During the period under review we enhanced our Group structure and management team to reflect the new size and scale of the business and position it for further growth.
The Group structure now comprises three divisions: Remediation, Decommissioning, including the EDS operations, and Consulting, which we aim to grow into a global operation.
As a result of combining our two UK asbestos Remediation businesses (Silverdell UK and Kitsons Environmental Europe) we now have a single Remediation division, Silverdell, under a single management team, delivering significant operational efficiencies and savings of GBP1.2m per year.
Darren Palin, Managing Director of EDS Group, is now Managing Director of our Decommissioning division and John Potts, who was appointed in November 2011, is Managing Director of Silverdell, whilst our Consulting division Redhills is led by Matt Griggs. All three Managing Directors have an impressive depth and breadth of knowledge and experience in their sectors and we are confident that under their leadership, our divisions will continue to thrive.
We remain a direct employer of our workforce, ensuring that their specialist skills are maintained and developed within the business providing an excellent basis for the training and development of future management, and enabling us to maintain our licenses to operate. This helps the Group maintain its high standards of quality and safety, protecting its own operating license and the interests and reputation of its customers.
On behalf of the Board, I would like to express our gratitude to everyone in the Group for their hard work, dedication and commitment during the past year, without which our success would not have been possible.
Summary
This has been a transformational year for Silverdell. We have acquired and are in the process of integrating EDS, secured significant new contracts, and streamlined and strengthened our management structure to give us a platform for the future. We have in place a sound strategy for growth supported by clear and achievable KPIs. Our belief in the excellent long term prospects for the Group is underlined by our recommendation of a maiden dividend. Current trading is encouraging and our focus now is on delivery. Mindful always of challenging global economic conditions, we look forward to the future with confidence.
Stuart Doughty
Non-Executive Chairman
*Earnings before interest, tax, depreciation and amortisation and also before impairment charges, share-based payments and non-recurring items
** Adjusted to exclude intangibles amortisation, impairment charges, non-recurring items and share-based payments
CHIEF EXECUTIVE'S STATEMENT
Overview
Silverdell operates in two distinct markets worldwide: the general domestic refurbishment and construction related market and the larger industrial support services market predominantly involved in the power generation, chemical, oil & gas, pharmaceutical, petrochemical and fuel sectors. All of these require a high degree of regulatory control. The skills, processes and, importantly, the highly complementary cultures that our operating teams have developed in both our traditional and our newly acquired businesses are well suited to the handling and management of all types of hazardous materials and assets in a safe and compliant manner.
Due to our proven track record of delivering services in hazardous environments, we are a trusted and long-standing supplier to multinational blue chip customers in these sectors, and now as an enlarged Group we are able to provide a fully comprehensive suite of decommissioning, dismantling and remediation services to these customers around the world. Our focus is on growing the business organically in our targeted global markets.
Performance against historic Strategic KPIs
30(th) September 2012 marked the end of our previous strategic period. We have set out below the actual performance over that period in relation to the key strategic objectives we set ourselves.
Strategic KPI Achievement -------------------------------- ---------------------------------------------- Grow order book ahead of 2009-12 non-acquired order book has grown organic growth by GBP99m or 173% -------------------------------- ---------------------------------------------- To drive organic revenue Underlying Remediation and Consulting growth year on year ahead revenues have been held broadly flat of market growth 2009-12. UK Construction industry declined by 11.6% in 12 months to August 2012 (Source: ONS) -------------------------------- ---------------------------------------------- To grow the EBITDA margin Achieved as a run-rate in Q4 2012 and to 10% per 2013 consensus -------------------------------- ---------------------------------------------- To maintain working capital Generally operated at over 4 weeks through at not more than 1 month's the period due to customers demanding revenue extended terms. As predicted, the beneficial impact of the EDS acquisition meant that at September 2012 group working capital had fallen to 1 month's run-rate revenues. -------------------------------- ---------------------------------------------- To grow the Consulting business Achieved prior to EDS acquisition. Consulting to 15% of Group revenues revenues as a percentage of Group total revenues in 2012 is 17% -------------------------------- ----------------------------------------------
Strategic Review
Our strategic focus is on achieving organic growth in our targeted global markets, underpinned by driving step changes in our industry expertise and our culture. Specifically, we aim to grow organically in the UK, Australia and Canada, by expanding further into markets in which we have a strong presence or a foothold, and by exporting proven business streams and services from one geography into another.
Our strategy is called "Changing the Landscape", reflecting both the transformation that Silverdell is undergoing as well as the beneficial impact that our activities have on the built and natural environments.
Our three particular areas of focus can be summarised as follows:
1. Increasing our Capability: Growing our geographic and product footprint organically, particularly in Canada and Australia, through enhancing our management teams and operational scope to drive commercial excellence and enable us to harness opportunities. As a part of this we will focus on expanding our Consulting offering in the UK, and aim to build organically a Consulting offering in Canada.
2. Expanding our Knowledge: Continuing to improve our industry knowledge and market intelligence both to enhance our competitive edge and to anticipate and respond to the changing demands of our customers. As part of this we are enhancing our business identification systems and our tendering processes.
3. Enhancing our Culture: Through training, development and enabling effective leadership, to develop a culture which fosters innovation and initiative combined with the responsible, safe and compliant approach for which we are known. We will continue to streamline our businesses under a more unified brand structure to establish a coherent position in the market place, ensuring minimal operational overlap and maximising operational efficiency.
To help us demonstrate progress, we have set the following medium term KPIs:
1. Achieve 15% year on year revenue growth
2. Achieve and maintain a robust and highly visible order book totalling two years or more of revenues
3. Achieve sustainable 10% adjusted EBITDA margins 4. Achieve and maintain a progressive dividend policy
We will continue to update investors on our progress in meeting our strategic goals and achieving our stated KPIs.
Operational Review
Divisional Revenue Split
Following the acquisition of EDS the Group now reports its results in three strategic segments, Remediation, Consulting and Decommissioning, with the latter comprising the EDS Group.
Remediation Decommissioning Consulting 2012 2011 2012 2011 2012 2011 Public Sector Local Authorities & Housing 17% 12% 0% 0% 13% 14% Defence 18% 21% 0% 0% 6% 9% Health & Education 12% 11% 0% 0% 14% 15% 47% 44% 0% 0% 33% 38% Private Sector Utilities, Power & Industrial 29% 27% 100% 100% 14% 18% Construction 8% 8% 0% 0% 2% 1% Retail, Commercial & Rail 16% 21% 0% 0% 51% 43% 53% 56% 100% 100% 67% 62% 100% 100% 100% 100% 100% 100%
In 2012 external Remediation revenues were GBP49.4m (2011: GBP51.5m). Adjusted operating profit* margins in this segment were 5.7% (2011: 6.9%). Decommissioning activities (undertaken by EDS) amounted to GBP18.9m in revenues in 2012 (2011: GBPnil) at operating profit* margins of 11.4% (2011: nil).
Consulting has had a strong year, with the two acquisitions completed in the second half of 2011 performing ahead of expectations. External Consulting revenues were GBP14.3m (2011: GBP8.2m), however included in this is GBP3m of sub-contract revenues relating to managed refurbishment projects which are typically lower margin and have served to dilute operating margins overall. Accordingly, the operating profit* margin fell to 10.8% (2011: 15.3%); stripping out sub-contract revenues, margins were broadly maintained.
* Excluding amortisation, impairment charges, share-based payments and non-recurring items.
Public Sector
There is a substantial asbestos legacy across the whole range of the public sector property portfolio, including local government buildings and social housing, schools, colleges and hospitals as well as defence establishments. The public sector spend on maintenance and refurbishment projects exceeds GBP20bn per year and this is driven by regulatory requirements.
Total revenues from the Public Sector rose in the year by GBP1.5m to GBP24.5m (2011: GBP23.0m) although as a percentage of total revenues the proportion fell due to the much greater increase in industrial revenues. The share of total Remediation revenues generated by public sector work were 47% in 2012 (2011: 44%) whilst the share of Consulting revenues was 33% (2011: 38%). Underlying public sector revenues in Consulting increased by GBP1.4m in absolute terms year on year despite comprising a lower percentage of total Consulting revenues due to the additional volume of retail work delivered through RDS, the specialist retail consultancy acquired in August 2011.
Local Authorities and Housing
Local Authorities and Housing revenues comprised 17% of Remediation revenues in 2012 (2011:12%). We work with a number of Housing Authorities and Registered Social Landlords across the United Kingdom to remove the asbestos legacy within their estate portfolio.
However, with more significant revenue growth in other areas, Local Authority revenues fell to 13% of our total Consulting revenues (2011: 14%) despite an increase in absolute revenues of GBP0.7m as we continued to win a number of large housing framework contracts across the UK.
Defence
The Defence share of revenues for Remediation for the year was 18% (2011: 21%). During 2012 the Group undertook a lower volume of work under the Regional Prime Contracts relationship for MoD housing. This has been a long-standing relationship which has seen the Group upgrade more than 190 MoD properties and over 7km of insulated pipework in the last five years. We continue to develop our relationship with the Atomic Weapons Establishment to whom we now offer a number of services, in addition to asbestos removal.
Consulting defence revenues represented 6% (2011: 9%) of the total as revenues were flat year on year.
Health and Education
Health and Education comprised 12% (2011: 11%) of our total Remediation revenues, with an absolute increase of GBP0.7m in revenues in this sector. We have worked successfully with a number of PCTs and Russell Group universities as they upgrade and refurbish their campuses to meet the needs of today's patient and student populations.
Health and Education work made up 14% of Consulting revenues (2011: 15%) reflecting an additional GBP0.7m of revenues compared to 2011. The Group won several projects with Russell Group universities to provide survey and management services across their entire university estates.
Private Sector
Utilities, Power and Industrial
EDS operates exclusively in this sector, working with a number of multinational industrial customers in the oil and gas, pharmaceutical and textile manufacturing, mining and commodities sectors as well as in power generation and brewing. EDS has an enviable track record in all of these sectors: it is the world's leading refinery decommissioning specialist and is frequently invited to new territories to undertake pioneering works in the field of high hazard industrial decommissioning. During the year EDS has commenced work in Adelaide, Australia on that country's first oil refinery decommissioning project. We also commenced the decommissioning of an ore production plant in Canada: this project involves the decontamination of mercury, asbestos and hydrocarbon hazards on a 380,000 sq ft site which will see over 50,000 tonnes of steel recycled.
Utilities, Power and Industrial customers represented 29% of Remediation segment revenues in 2012 (2011: 27%). Within our traditional service offerings of asbestos, insulation and scaffolding, we have secured a number of additional contracts this year, including the provision of scaffolding support and thermal insulation works at a gas terminal in the North West of England; a significant shut-down contract at an oil refinery in South Wales and the provision of specialist scaffolding support to a cement manufacturer in the Midlands. The late starting contracts referred to above, which impacted our Remediation revenues, included the GBP304 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 GBP3.2m order for works to commence immediately at the Magnox site at Chapelcross, with further works expected to commence in 2013.
In our Consulting business, Utilities, Power and Industrial customers contributed 14% (2011:18%) of total revenues, which represents an increase in revenues in this sector of GBP0.6m year on year. Our long-standing framework contract with a large water utility in the North East is the mainstay of our industrial and utilities work and our Utilities relationships during the year have delivered resilient revenue streams. We continue to win a significant amount of new business from Remediation customers in this sector as a result of our strong relationships with customers such as National Grid and Magnox.
Construction
Construction's share of total Remediation revenues in 2012 was 8% (2011:8%), with absolute revenues rising by GBP0.5m. The most significant contract secured in this segment during the period was a ground remediation contract for a large development site in Staffordshire, which saw us dig out and remove over 3,500 tonnes of contaminated soil. However, the outlook for the Construction sector remains weak over the medium term.
Consulting's Construction share of total revenues was 2% (2011: 1%).
Retail, Commercial and Rail
This sector comprised 16% (2011: 21%) of Remediation revenues and 51% of Consulting revenues (2011: 43%).
The Remediation business saw a number of retail contracts deferred into FY 2013, as well as fewer rail infrastructure works. The volume of insurance-related work has also declined as the industry has altered the way it responds to household asbestos claims. Nevertheless, Silverdell continues to have strong relationships with all the major retailers and is considered a market leader in the sector.
The retail, rail and commercial sector comprised 51% (2011: 43%) of Consulting's total revenues which represents a year-on-year increase in sales of GBP3.6m. We are now the leading provider of asbestos consulting services to the retail sector with a customer list that includes many household names and in addition, we are performing increasing numbers of full service project management contracts in which we oversee the entire asbestos element of store refurbishment projects.
Current Trading and Outlook
This is a positive set of results which demonstrates the robustness of our business model and our market leading positions. Thanks to the dedication of its people and the support of its shareholders, the Group has delivered significant growth, both organically and by acquisition, and encouragingly, has ended the year particularly strongly with combined August and September revenues of GBP24.8m (August and September 2011: GBP11.6m). Current trading is encouraging and in line with management's expectations and we are in the process of tendering for several large contracts in Australia, Canada, the UK and mainland Europe. Whilst remaining mindful of challenging economic conditions, we believe we have the scale, the momentum and the opportunity to grow strongly over the next twelve months, and we look forward to the future with confidence.
Sean Nutley
Chief Executive Officer
FINANCIAL REVIEW
Group turnover increased by 38% to GBP82.5m (2011: GBP59.7m), primarily as a result of the acquisition of EDS Group Holdings Ltd ("EDS") at the end of the third quarter. EDS contributed GBP18.9m in revenues while RDS, the Consulting acquisition completed in early September 2011, recorded revenues of GBP4.7m. Overall the incremental revenue effect of acquisitions in the year was GBP23.6m. Gross profit was increased to GBP20.4m (2011: GBP16.0m**) at a gross margin percentage of 24.7% (2011: 26.9%**). EDS gross profit was GBP3.5m at a gross margin of 16.4%, which is the key driver of the margin dilution experienced at the consolidated group level. It should be noted that gross profit is now quoted including plant and equipment depreciation, whereas previously depreciation was wholly charged as an administrative cost. The incremental effect of the Consulting acquisitions on 2011 gross profit was GBP1.5m at an average gross margin of 31%.
Administrative expenses increased to GBP15.8m (2011: GBP12.7m**). Administrative expenses as a percentage of revenue were 19.1% (2011: 21.3%). Of the overall increase in administrative costs of GBP3.1m, the incremental impact of the acquisition of EDS was GBP0.9m. Adjusted operating profit* increased by GBP1.7m to GBP4.8m (2011: GBP3.6m).
As a result of the EDS acquisitions, integration costs related to the Consulting acquisitions and the integration of Silverdell UK and Kitsons Environment Europe Limited into one operating entity, we incurred additional non-recurring administrative expenses of GBP2.2m (2011:GBP0.3m).
Finance charges were GBP0.8m (2011: GBP0.5m): the increase is due to GBP0.3m of non-recurring finance costs relating to the legal and break costs associated with the refinancing carried out in June 2012. Adjusted profit before tax* was up GBP1.3m at GBP4.3m (2011: GBP3.0m). Statutory profit before tax decreased to GBP0.5m (2011: GBP2.5m) as a result of the non-recurring charges and amortisation of intangible assets arising from the EDS acquisition. The tax charge for the year was GBP0.4m (2011: GBP0.8m). The effective corporation tax rate is 81% (2011: 32%), the high rate reflecting non-recurring disallowable expenses related to the EDS acquisition. Adjusted profit after tax* was GBP3.2m (2011: GBP2.1m) and adjusted earnings per share* was 1.5 pence (2011: 1.4 pence). Statutory profit after tax was GBP0.1m (2011: GBP1.7m). The Directors are recommending the payment of a maiden dividend of 0.175 pence per share in March 2013. Net senior debt at 30 September 2012 was GBP4.5m (2011: GBP5.0m). In addition, obligations under finance leases amounted to GBP6.0m (2011:GBP0.2m) with gearing (including finance leases) at 29% (2011: 22%). The net working capital cash outflow was GBP3.0m (2011: GBP3.6m outflow). This arose as a result of the volume growth, particularly during Q4 2012, which resulted in trade receivables being disproportionately higher than at the same point last year. We also have, included in receivables, amounts recoverable under contracts of GBP3.2m which we expect to recover during the first half of 2013. After the year-end, the Group's term loan facility was extended by GBP2.5m to GBP5.5m, to be used as additional working capital to support the recent divestment contract win in Canada.
The order book grew substantially as a result of the EDS acquisition and at 31 October 2012 stands at GBP219m (31 October 2011: GBP107m). Of this, GBP97m (2011: GBP36m) is scheduled to fall in the next financial year.
We completed the acquisition of EDS in June 2012 for a total consideration of GBP18.6m, which included GBP3.6m (before discounting) of estimated contingent consideration. This acquisition also included issuing a total of 132.4 m shares, which comprised 80.1m shares to investors participating in the Placing in June 2012 and 52.3m to the vendors of RDS as part of the total consideration. As a result the number of issued, allotted and fully paid up shares increased to end the year at 313.2m (2011: 180.8m).
* Adjusted to exclude intangibles amortisation, impairment charges, non-recurring items and share-based payments
** As restated for the reclassification of certain depreciation charges previously classified as administrative expenses
Ian Johnson
Chief Financial Officer
Consolidated Income Statement
For the year ended 30 September 2012
Before non-recurring Non-recurring items and items and amortisation amortisation (see Note (see Note 10) 10) --------------- -------------- -------- 2011 2012 2012 2012 (Restated)* Notes GBP'000 GBP'000 GBP'000 GBP'000 Continuing operations Revenue 5 82,521 - 82,521 59,696 Cost of sales (62,138) - (62,138) (43,644) Gross profit 20,383 - 20,383 16,052 Administrative expenses (15,815) - (15,815) (12,748) ----------------------------------------- ----- --------------- -------------- -------- ------------ * amortisation of intangible assets - (1,073) (1,073) (30) * non-recurring expenses - (2,176) (2,176) (298) Total administrative expenses (15,815) (3,249) (19,064) (13,076) Operating profit 6 4,568 (3,249) 1,319 2,976 Finance costs 8 (504) (283) (787) (514) Profit before tax 4,064 (3,532) 532 2,462 Income taxation charge 9 (1,138) 709 (429) (779) Profit for the year 2,926 (2,823) 103 1,683 Earnings per share (Pence) Basic earnings per ordinary share 11 0.0 1.1 Diluted earnings per ordinary share 11 0.0 1.0
* During 2012 the Directors decided to classify depreciation charges on plant and machinery as Cost of Sales rather than Administrative Expenses. The comparative figures for 2011 have been reclassified to ensure consistency, with Cost of Sales for 2011 increasing and Administrative Expenses decreasing by GBP280,000.
Consolidated statement of comprehensive income 2012 2011 For the year ended 30th September 2012 GBP'000 GBP'000 Profit for the year 103 1,683 Other comprehensive income Cash flow hedges: * gain arising during the year - 40 * related tax charge - (10) - 30 Foreign currency translation gain 6 - Total comprehensive income for the year 109 1,713
Consolidated balance sheet
At 30 September 2012
2012 2011 Notes GBP'000 GBP'000 Assets Non-current assets Goodwill 12 26,420 17,761 Other intangible assets 13 7,216 453 Deferred tax asset 9 713 - Property, plant and equipment 15 11,350 2,652 Trade and other receivables 18 1,724 1,001 47,423 21,867 Current assets Inventories and work in progress 16 4,903 3,064 Trade and other receivables 18 34,646 17,305 Cash and cash equivalents 4,456 2,567 44,005 22,936 Total assets 91,428 44,803 Non-current liabilities Borrowings 20 11,386 4,038 Trade and other payables 23 1,724 1,001 Contingent consideration 21 1,704 109 Deferred tax liabilities 9 1,884 221 16,698 5,369 Liabilities Current liabilities Borrowings 20 4,296 3,793 Trade and other payables 23 29,083 10,864 Other financial liabilities 17 - 31 Contingent consideration 21 1,643 326 Current tax liabilities 1,510 749 36,532 15,763 Total liabilities 53,230 21,132 Net assets 38,198 23,671 Equity Share capital 24 3,132 1,808 Share premium account 15,283 2,456 Equity reserve 788 721 Hedging reserve - (22) Foreign currency translation reserve 6 - Other reserve 4,135 4,135 Retained earnings 14,854 14,573 Total equity 38,198 23,671
These financial statements were approved by the Board of Directors on 4 December 2012.
Signed on behalf of the Board of Directors:
Ian Johnson
Director
Consolidated statement of changes in equity
At 30 September 2011
Foreign Share Share Other Equity Hedging Capital exchange Retained capital premium reserve reserve reserve reserve reserve earnings Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 1st October 2010 1,516 17,813 16,635 464 (52) 3,749 - (21,172) 18,953 Net profit for year - - - - - - - 1,683 1,683 Other comprehensive income - - - - 30 - - - 30 Total comprehensive income for the year - - - - 30 - - 1,683 1,713 Shares issued 292 2,456 - - - - - - 2,748 Capital cancellation* - (17,813) (12,500) - - (3,749) - 34,062 - Share based payment charge - - - 257 - - - - 257 At 1(st) October 2011 1,808 2,456 4,135 721 (22) - - 14,573 23,671 Net profit for year - - - - - - - 103 103 Other comprehensive income - - - - - - 6 - 6 Total comprehensive income for the year - - - - - - 6 103 109 Shares issued 1,324 13,236 - - - - - - 14,560 Expenses of share issue - (409) - - - - - - (409) Share based payment charge - - - 267 - - - - 267 Transfers - - - (200) 22 - - 178 - At 30th September 2012 3,132 15,283 4,135 788 - - 6 14,854 38,198
* Following special resolutions of the Company which were confirmed by the High Court on 16(th) February 2011, the Company cancelled the share premium account and capital reserve and also cancelled GBP12.5m of deferred shares from the other reserve, which increased retained earnings by a total of GBP34.1m.
The Other Reserve is non-distributable and represents the remaining balance of the premiums arising on the issuance of certain warrants and of shares issued in order to acquire Group companies.
2012 2011 Notes GBP'000 GBP'000 Cash flows from operating activities Profit for the year 103 1,683 Income taxation charge 9 429 779 Finance costs (net) 8 787 514 Amortisation of intangibles 13 1,073 30 Depreciation on property, plant and equipment 15 1,364 525 Profit on disposal of property, plant and equipment (73) (2) Share based payments 26 267 257 Movements in working capital: - Increase in inventories (1,219) (2,066) - Increase in trade and other receivables (8,031) (3,599) - Increase in trade and other payables 6,254 2,114 Cash generated from operations 954 235 Income tax paid (555) (628) Net cash inflow / (outflow) from operating activities 399 (393) Cash flows from investing activities Purchase of property, plant and equipment (138) (656) Proceeds from sale of property, plant and equipment 375 17 Acquisition of subsidiaries (net of cash acquired) (6,784) (1,348) Net cash outflow from investing activities (6,547) (1,987) Cash flows from financing activities Interest paid (630) (433) Interest paid on finance leases (92) (6) Payments for hire purchase contracts principals (990) (53) Proceeds from bank loans 3,737 - Repayments of bank loans - (930) Proceeds from issue of equity shares (net) 8,401 2,198 Net cash inflow from financing activities 10,426 776 Net increase / (decrease) in cash and cash equivalents 4,278 (1,604) Cash and cash equivalents at the beginning of the year (318) 1,286 Cash and cash equivalents at the end of the year 3,960 (318) Cash and cash equivalents comprises: Cash at bank and in hand 19 4,456 2,567 Bank overdrafts 19 (496) (2,885) 3,960 (318)
Note to the financial statements
1. General information
Silverdell PLC is a company incorporated in Great Britain under the Companies Act 2006. The address of the registered office is 20 Buckingham Street, London WC2N 6EF. The nature of the Group's operations and its principal activities are set out in the Directors' Report on pages 26 to 31.
2. Basis of preparation
The annual consolidated financial statements of the Group have been prepared in accordance with International Reporting Standards (IFRS) as adopted by the European Union (EU) (IFRS as adopted by the EU).
Going Concern
As at 30(th) September 2012, the Directors have a reasonable expectation that the Group has adequate resources to continue in operation for the foreseeable future. Accordingly, they have adopted the going concern basis in preparing these financial statements.
3.1 Adoption of new and revised IFRS
The Group has adopted all new and amended standards and interpretations effective for these financial statements. Their adoption did not have a material impact on the amounts reported in the financial statements, but could impact the accounting for future transactions and arrangements. For those standards in issue but not yet effective at the date of approval of these financial statements, the Directors do not consider these will have a material impact on the Group's future financial statements.
3.2 Accounting policies
Basis of accounting
The consolidated financial information has been prepared in accordance with IFRSs adopted by the European Union and therefore the Group financial statements comply with Article 4 of the EU IAS Regulation.
The consolidated financial information has been prepared on the historical cost basis except for the revaluation of certain financial instruments measured at fair value. The principal accounting policies adopted are set out below.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 30th September each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by the Group.
All intra-Group transactions, balances, income and expenses are eliminated on consolidation.
Business combinations
The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.
Separately identifiable intangible assets are recognised on acquisition where appropriate and amortised over their useful economic life.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in profit or loss.
For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts, VAT and other sales-related taxes.
Profit is recognised on long-term contracts if the final outcome can be assessed with reasonable certainty by including in the income statement revenue and related costs as contract activity progresses. Revenue is calculated by reference to the value of work performed to date as a proportion of total contract value.
An accrued revenue asset is recognised where contract revenues are expected to be recovered through the sale of metals or production assets which have been made available for re-sale.
Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the minimum lease payments, each determined at the inception of the lease.
The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.
Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.
Borrowing costs
Borrowing costs are recognised in profit or loss in the period in which they are incurred.
Retirement benefit costs
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on onsolidation, are translated to the Group's presentational currency, Sterling, at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated at an average rate for the year where this rate approximates to the foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from this translation of foreign operations are reported as an item of other comprehensive income and accumulated in the translation reserve.
Taxation
The tax expense represents the sum of the tax currently payable and the movements in deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited to other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any recognised impairment loss.
Depreciation is charged so as to write off the cost or valuation of assets, other than land and assets under construction, over their estimated useful lives, on the following bases:
Freehold property 4% on cost Leasehold property 10% on cost Plant and machinery 10% on cost Office equipment 16.6%-25% on cost Motor vehicles 25% on reducing balance
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, over the term of the relevant lease.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income.
Impairment of tangible and intangible assets excluding goodwill
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately.
Inventories and work in progress
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Work in progress on service contracts is stated at cost plus, where the outcome can be assessed with reasonable certainty, estimated profits attributable to the stage of completion less provision for any expected losses and progress payments received on account. Bid expenses on successful tenders are capitalised as work in progress and written down over the contract term. Amounts recoverable on long term service contracts, which are included in trade and other receivables, are stated at the net sales value of the work done less progress payments received on account. Excess progress payments are included on trade and other payables. Cumulative costs incurred, less amounts transferred to cost of sales, less provision for contingencies and expected future losses on service contracts, are included as long-term service contract balances in inventories.
Financial instruments
Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.
Financial instruments are classified into the following categories: financial assets at fair value through profit and loss "FVTPL" (held for trading), 'loans and receivables' at amortised cost, financial liabilities - derivatives designated as cash flow hedges, and financial liabilities at amortised cost.
The classification depends on the nature and purpose of the financial instruments.
Trade and other receivables
Trade and other receivables are measured at initial recognition at fair value. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Also included in trade and other receivables are accrued revenues arising on decommissioning and divestment contracts where contract revenues are expected to be realised in the form of metal or other second-hand assets made available for re-sale.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accrual basis in profit or loss using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
Trade payables
Trade payables are initially measured at fair value.
Derivative financial instruments and hedge accounting
The Group's activities expose it primarily to the financial risk of changes in interest rates and foreign exchange rates. The Group has used interest rate swap contracts to hedge its interest rate exposure. The Group does not use derivative financial instruments for speculative purposes.
The use of financial derivatives is governed by the Group's policies approved by the Board of directors, which provide written principles on the use of financial derivatives.
Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are recognised in other comprehensive income and the ineffective portion is recognised immediately in the income statement. If the cash flow hedge of a firm commitment or forecasted transaction results in the recognition of an asset or a liability, then, at the time the asset or liability is recognised, the associated gains or losses on the derivative that had previously been recognised in other comprehensive income are included in the initial measurement of the asset or liability. For hedges that do not result in the recognition of an asset or a liability, amounts deferred in other comprehensive income are recognised in the income statement in the same period in which the hedged item affects net profit or loss.
Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are classified as FVTPL (held for trading), and the gains and losses are recognised in the income statement as they arise. These are classified as held for trading as they have not been hedge accounted, and have not been "designated" as FVTPL.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in other comprehensive income is retained there until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in other comprehensive income is transferred to the income statement for the period.
Investments
Investments in subsidiaries are stated at cost, less provision for any impairment.
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation. Provisions are measured at the Directors' best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.
Share-based payments
The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period and is recognised as an employee expense with a corresponding increase in equity, based on the Group's estimate of shares that will eventually vest and adjusted for the effect of non market-based vesting conditions.
Fair value is measured by use of the Black-Scholes model or the binomial method as appropriate. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
Intangible assets
Customer relationships
Customer relationships are measured as the present value of cash flows attributable to the relationship after deduction of appropriate contributory assets charged. The relationship is amortised over its expected useful life, typically three years.
Order book
Order book is the value of confirmed orders on the date of acquisition after appropriate costs have been deducted. The order book is amortised over the period in which it is expected to unwind.
4. Critical accounting judgements and key sources of estimation uncertainty
The preparation of consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions about the carrying amount of assets and liabilities and the amount of income and revenue recognised in the period. Actual results may differ from these estimates.
The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.
Revenue and profit/margin recognition
The Group's revenue recognition, turnover and long term contracts policies are set out in the notes above. Management exercises judgement to estimate the total expected contract costs and determine the percentage of completion in order to recognise the appropriate revenue and profit in the period. The assessment of profitability and recognition is assessed on an ongoing basis, which ensures adequate controls are in place that appropriate amounts are calculated.
Recognition and measurement of intangible assets under IFRS 3 'Business Combinations'
In order to determine the value of the separately identifiable intangible assets on the acquisition of a business combination, management are required to make estimates on secured customer contracts, other contracts and customer relationships and goodwill. The Group engaged outside independent parties to perform these calculations and determine the fair value and estimated useful lives of these assets.
Impairment of goodwill and other intangible assets
There are a number of assumptions management have considered in performing impairment reviews of goodwill and intangible assets. Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the Directors to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Note 12 details the assumptions that have been applied for goodwill.
5. Segmental information
Strategic segments
The Group has three reportable segments, as described below, which are the Group's strategic divisions. The strategic divisions offer different services and are managed separately because they have some differences in their operational risks and business models. For each of the strategic divisions, the Group's CEO (the chief operating decision maker) reviews internal management reports on at least a monthly basis. The following summary describes the operations in each of the Group's reportable segments;
Remediation - provides services related to the direct remediation and removal of environmental risks, the principal two group companies in this segment being Silverdell UK and Kitsons.
Decommissioning - provides decommissioning solutions, asset recovery, demolition and dismantling services, the principal group companies in this segment being Euro Dismantling Services Ltd and its related companies in Canada and Australia.
Consulting - provides environmental survey, monitoring and project management services, the principal company in this segment being Redhill Analysts and its subsidiary RDS.
Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before tax as included in the internal management reports that are reviewed by the Group's CEO. Segment profit is used to measure performance as management believes such information is the most relevant in evaluating the results of certain segments relative
to other entities that operate within these industries.
Remediation Decommissioning Consulting Unallocated Group 2012 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 For the year ended 30th September 2012 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
Inter-segment revenue is charged at prevailing market prices.
Remediation Decommissioning Consulting Unallocated Group 2012 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 For the year ended 30 September 2012 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 At 30th September 2012 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 Remediation Consulting Unallocated Group 2011 GBP'000 GBP'000 GBP'000 GBP'000 For the year ended 30th September 2011 Revenue Total revenue 53,889 8,805 - 62,694 Inter-segment revenue (2,399) (599) - (2,998) External revenue 51,490 8,206 - 59,696
Inter-segment revenue is charged at prevailing market prices.
Remediation Consulting Unallocated Group 2011 GBP'000 GBP'000 GBP'000 GBP'000 For the year ended 30th September 2011 Result Operating profit before amortisation and non-recurring items 3,554 1,252 (1,502) 3,304 Intangible assets amortisation - (30) - (30) Non-recurring expenses (24) (50) (224) (298) Finance costs (17) (5) (492) (514) Profit / (loss) before tax 3,513 1,167 (2,218) 2,462 Taxation (1,111) (369) 701 (779) Profit / (loss) for the year 2,402 798 (1,517) 1,683 At 30th September 2011 Balance sheet Total assets 32,206 12,446 151 44,803 Total liabilities 13,605 2,643 4,884 21,132 Other information Capital expenditure 656 197 28 881 Depreciation 440 68 17 525
Unallocated costs relate principally to head office costs and interest charges on bank borrowings of the Group's holding company. Unallocated assets and liabilities represent the assets and liabilities of the holding company, including bank borrowings.
Geographical segments
An analysis of the Group's 2012 results by geographical segment is presented below. Substantially all the activities outside the United Kingdom related to the Decommissioning strategic segment. In 2011 substantially all the Group's results arose in the United Kingdom, so no geographical analysis was required.
United Kingdom Canada Australia Other Group 2012 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 For the year ended 30th September 2012 Revenue Total revenue 69,700 10,050 2,771 - 82,521 Inter-segment revenue - - - - - External revenue 69,700 10,050 2,771 - 82,521 For the year ended 30th September 2012 Result Operating profit before amortisation and non-recurring items 2,764 1,657 147 - 4,568 Intangible assets amortisation (1,073) - - - (1,073) Non-recurring administrative expenses (2,149) (26) (1) - (2,176) Non-recurring finance costs (283) - - - (283) Finance costs (net) (449) (31) (24) - (504) (Loss) / profit before tax (1,190) 1,600 122 - 532 Taxation 83 (473) (39) (429) (Loss) / profit for the year (1,107) 1,127 83 - 103 At 30th September 2012 Balance sheet Total assets 82,835 7,050 1,396 147 91,428 Total liabilities 49,900 3,013 (184) 501 53,230 Other information Capital expenditure 2,372 44 950 - 3,366 Depreciation 1,051 261 52 - 1,364 6. Operating profit 2012 2011 GBP'000 GBP'000 Operating profit is stated after charging/ (crediting): Share based payment charge (see Note 26) 267 257 Amortisation of intangible assets (see Note 13) 1,073 30 Depreciation of: - owned assets 889 450 - assets held under finance leases 475 75 Auditors' remuneration (see below) 145 87 Hire of plant and machinery 3,052 1,422 Operating lease rentals - land and buildings 640 574 Profit on disposal of fixed assets (73) (2) 2012 2011 Analysis of auditors' remuneration GBP'000 GBP'000 Audit services - audit of Company's annual accounts 22 17 - audit of Company's subsidiaries, pursuant to legislation 103 57 125 74 Other services - other services relating to tax compliance 20 13 Auditors' remuneration 145 87 7. Staff costs including directors' remuneration
Directors' remuneration and transactions
Salary Benefits Performance Total emoluments Pension contributions Total Total and fees GBP'000 bonus GBP'000 GBP'000 2012 2011 GBP'000 GBP'000 GBP'000 GBP'000 Non-Executive Directors: Stuart Doughty 75 - 117 192 - 192 75 Mark Watts 30 - - 30 - 30 30 Executive Directors: Sean Nutley 242 3 - 245 81 326 262 Ian Johnson 208 3 - 211 61 272 221 Total 555 6 117 678 142 820 588
The whole of the bonus paid to Stuart Doughty in 2012, GBP70,000 (2011: GBPnil) of the pension contributions for Sean Nutley and GBP42,000 (2011: GBPnil) of the pension contributions for Ian Johnson were exclusively related to the successful completion of the EDS acquisition and were wholly used to buy shares in the Company in the associated placing. The Directors did not receive any bonus in either year in respect of the Group's financial performance.
The pension contributions disclosed above were all in respect of money purchase arrangements.
Options over ordinary shares
The Directors' interests in share options are disclosed in the Directors' report on pages 26 to 31.
Staff costs
2012 2011 Employees Number Number Average number of persons (including Directors) employed by the Group in the year: Operational, sales and other 764 693 Administrative 225 167 989 860
The payroll costs in respect of the employees included in the table above were:
2012 2011 GBP'000 GBP'000 Salaries and wages 37,300 29,944 Social security costs 3,671 3,167 Pension costs 458 284 Share based payment charge (Note 26) 267 257 41,696 33,652
Certain subsidiary undertakings of the Group operate defined contribution pension schemes. The assets of the schemes are held separately from those of the Group by independently administered funds.
Remuneration of key management personnel
In accordance with IAS 24 Related Party Disclosures, key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any Director (Executive and Non-Executive) of the Group.
The remuneration of these key personnel is set out below.
2012 2011 GBP'000 GBP'000 Short-term employee benefits 989 917 Post-employment benefits 166 77
Key management personnel comprise the members of the Board and the Managing Directors of each of the Group's strategic segment
8. Finance costs (net) 2012 2011 GBP'000 GBP'000 Interest on bank overdrafts and loans 432 502 Bank interest receivable (20) - Interest on obligations under finance leases 92 6 Non-recurring finance costs (see Note 10) 198 - Finance charge on contingent consideration (see Note 10) 85 6 Total finance costs (net) 787 514 9. Tax on profit on ordinary activities
Income tax recognised in profit or loss
2012 2011 GBP'000 GBP'000 Tax charge comprises: United Kingdom corporation tax based on the profit for the year 436 795 Overseas corporation tax 508 - Adjustment in respect of previous years (146) (89) Total current tax expense 798 706 Deferred tax income relating to the origination and reversal of temporary differences (369) (24) Adjustment in respect of previous years - 97 Total deferred tax (credit) / expense (369) 73 Total tax expense 429 779
The charge for the year can be reconciled to the profit per the income statement as follows:
2012 2012 2011 2011 GBP'000 % GBP'000 % Profit before tax 532 2,462 Income tax expense calculated at the standard rate of 25% (2011: 27%) 133 25 665 27 Share based payment charge 67 13 25 1 Non-deductible expenses 288 54 81 4 Impact of overseas profits subject to higher tax rates 87 16 - - Prior year adjustment (146) (27) 8 - Income tax charge recognised in profit or loss 429 81 779 32 The Group's planned level of capital investment is expected to remain at similar levels. Therefore, it expects to be able to claim allowances in excess of depreciation in future years, at a similar level to the current year. The movement in deferred tax was as follows: Asset Liability GBP'000 GBP'000 At 1st October 2010 - (15) Charged to income statement - (73) Charged to hedging reserve - (10) Acquired with subsidiary undertakings - (123) At 30th September 2011 - (221) (Charged) / credited to income statement (3) 372 Acquired with subsidiary undertaking (see Note 14) 716 (2,035) At 30th September 2012 713 (1,884) 2012 2011 The deferred tax asset comprises: GBP'000 GBP'000 Unrelieved trading losses 477 - Share-based payments 56 - Other short-term timing differences 180 - 713 - The deferred tax liability comprises: Accelerated tax depreciation (3) (132) Intangible assets (1,881) (123) Other - 34 (1,884) (221)
There was a potential deferred tax asset of GBP550,000 (2011: GBPnil) relating to tax losses carried forward. Management have assessed the future recovery of the losses and do not consider there to be sufficient probability of utilisation.
10. Non-recurring expenses and amortisation
Non-recurring items, impairments and amortisation are shown separately on the face of the income statement in order to reflect the Group's underlying financial performance. The items comprise the following:
2012 2011 GBP'000 GBP'000 Amortisation of intangible assets (see Note 13) 1,073 30 Non-recurring expenses - administrative expenses 2,176 298 Non-recurring expenses - finance costs 283 6 3,532 334 Related income tax credit (709) (89) 2,823 245
Administrative expenses
The non-recurring administrative expenses of GBP2,176,000 (2011: GBP298,000) can be analysed further as follows.
Business acquisition costs of GBP1,275,000 (2011: GBP70,000) comprise costs of the acquisition and subsequent integration of subsidiary undertakings.
Internal restructuring costs of GBP832,000 (2011: GBP52,000) represent severance, property and other costs incurred principally in the reorganisation of the Group's Remediation segment.
Other non-recurring costs of GBP69,000 (2011: GBP68,000) were incurred on overseas business development. In 2011 there were additional non-recurring costs of GBP57,000 for corporate rebranding and GBP51,000 of fees arising on the capital restructuring.
Finance costs
Non-recurring finance costs of GBP198,000 (2011: GBPNil) arose from the renegotiation of the Group's banking facilities during the year. The finance charge arising on contingent consideration of GBP85,000 (2011: GBP6,000) is also included here as it is an acquisition-related cost.
11. 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 year, 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.
Adjusted basic earnings per share is calculated by dividing the earnings attributed to ordinary shareholders, before intangible assets amortisation, share-based payment charges, non-recurring expenses and finance charges on deferred consideration, by the weighted average number of ordinary shares during the year.
2012 2011 earnings Earnings per share per share basic diluted basic diluted -------- ----------- ------- -------- ---------- ------- Earnings GBP'000 pence pence GBP'000 pence pence Profit attributable to ordinary shareholders 103 0.0 0.0 1,683 1.1 1.0 Non-recurring items, impairments, amortisation and share based payments 3,090 1.5 1.3 453 0.3 0.3 Profit for adjusted earnings per share 3,193 1.5 1.3 2,136 1.4 1.3
The adjusted numbers have been reported in order that the impact of the above charges against reported profit can be fully appreciated.
Number of shares
2012 2011 No. No. Weighted average number of ordinary shares used in calculation of basic earnings per share 218,557,295 155,663,646 Effect of dilutive potential ordinary shares: Share options 14,310,730 2,087,492 Warrants held by Barclays Bank PLC 11,374,179 11,374,179 Weighted average number of ordinary shares used in calculation of diluted earnings per share 244,242,204 169,125,317
The weighted average number of ordinary shares for the basic earnings per share differs from the closing number of shares at 30 September 2012 as a result of the issue of 132,374,193 new shares on 18(th) June 2012 (see Note 24).
Details of all warrants are disclosed in Note 24. Only the warrants held by Barclays Bank PLC are considered to be anti-dilutive.
12. Goodwill GBP'000 Cost At 30th September 2010 35,611 Acquisition of A H Allen 478 Acquisition of RDS 1,127 At 30th September 2011 37,216 Acquisition of EDS (see Note 14) 8,659 At 30th September 2012 45,875 GBP'000 Accumulated impairment losses At 30th September 2010, 30th September 2011 and 30th September 2012 (19,455) Carrying amount At 30th September 2012 26,420 At 30th September 2011 17,761
The carrying amount of goodwill relates to the Group's three strategic business segments as follows:
2012 2011 GBP'000 GBP'000 Remediation 10,869 10,869 Decommissioning 8,659 - Consulting 6,892 6,892 26,420 17,761
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 (CGU) which reflects how it is monitored for internal management purposes. The recoverable amounts of the CGUs are determined from value in use calculations. Value in use is calculated using pre-tax cashflow projections based on the financial budgets and business plans covering a three year period, which take into account historical trends and market conditions, which have been approved by the Board. The key assumptions for the value in use calculations 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 CGUs, equivalent to a real pre-tax discount rate which average 12% (2011: 12%). 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 and extrapolates cash flows for the following years based on an estimated annual growth rate of 1%. The rates do not exceed the average long-term growth rate for the relevant markets. The rates used to discount the cash flows in both 2012 and 2011 for all CGUs have been based on the Group's adjusted weighted average cost of capital, because the CGUs do not have significantly differing risk profiles.
The Group's assumptions disclosed above in respect of the key sensitive areas of future revenue growth and discount rate, are considered to be sufficiently prudent to address any risk of material mis-statement.
At 30th September 2012, goodwill was allocated to the Remediation CGU (comprising Kitsons and Silverdell UK, the Consulting CGU (comprising Redhills and RDS) and the Decommissioning CGU (comprising the EDS Group).
As a result of impairment reviews in previous years, the goodwill relating to these CGUs was reduced to its recoverable amount by recognising accumulated impairment losses as follows:
GBP'000 Remediation 18,356 Consulting 1,099 19,455 13. Other intangible assets Order Customer Backlog Contracts Total Cost At 30th September 2010 1,480 5,434 6,914 Acquisition of A H Allen - 122 122 Acquisition of RDS - 361 361 At 30th September 2011 1,480 5,917 7,397 Acquisition of EDS (see Note 14) 6,184 1,652 7,836 At 30th September 2012 7,664 7,569 15,233 Accumulated amortisation At 30th September 2010 1,480 5,434 6,914 Amortisation charge - 30 30 At 30th September 2011 1,480 5,464 6,944 Amortisation charge 802 271 1,073 At 30th September 2012 2,282 5,735 8,017 Carrying amount At 30th September 2012 5,382 1,834 7,216 At 30th September 2011 - 453 453
All amortisation charges in the year have been included in administrative expenses.
14. Acquisition
The Group acquired 100% of the issued share capital of EDS Group Holdings Ltd ("EDS") on 18th June 2012. The fair values of the assets and liabilities acquired are set out in the table below.
Fair value Book value adjustments Fair value GBP'000 GBP'000 GBP'000 Intangible assets - 7,836 7,836 Property, plant and equipment 7,144 - 7,144 Deferred tax asset 1,496 (780) 716 Inventories and work in progress 620 - 620 Trade and other receivables 9,214 725 9,939 Cash and cash equivalents 3,118 - 3,118 Trade and other payables (11,919) (759) (12,678) Bank overdraft (1,189) - (1,189) Current tax liabilities - (578) (578) Finance lease obligations (3,512) - (3,512) Deferred tax liabilities - (2,035) (2,035) Net assets acquired 4,972 4,409 9,381 Consideration paid: Cash payable 8,500 Shares issued to vendors 5,750 Contingent consideration - nominal amount 3,600 Consideration - discounting (560) Loan note payable 750 Fair value of consideration 18,040 Goodwill arising 8,659
The fair value adjustments related to the recognition of intangible assets on acquisition in respect of the order backlog and key customer relationships, together with the related deferred tax liabilities. Adjustments were also made to deferred taxation on unrelieved trading losses, based on expected recoverability against future profits. Further provision was made in other payables for liabilities which are covered by indemnities from the vendors, with a corresponding asset recognised in other receivables.
Details of the contingent consideration are provided in Note 21.
EDS contributed revenue of GBP18,852,000 and operating profit before amortisation and non-recurring items of GBP2,151,000 to the Group results in the year ended 30th September 2012. The results of the EDS group represent the Decommissioning division in the segmental analysis in Note 5.
If the acquisition has occurred on 1(st) October 2011, management estimate that consolidated revenues would have been GBP114.8m and consolidated losses would have been GBP1.5m. In determining these amounts, management have assumed that the fair value adjustments determined provisionally that arose on the acquisition date would have been the same if the acquisition had occurred on 1(st) October 2011.
15. Property, plant and equipment Freehold and leasehold Plant and property Motor vehicles Office equipment machinery Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Cost At 1st October 2010 689 784 932 2,989 5,394 Additions 19 156 107 599 881 Acquisitions 219 18 - 77 314 Disposals - (281) - - (281) At 30 September2011 927 677 1,039 3,665 6,308 Additions 1 88 187 3,090 3,366 Acquisitions (see Note 14) - 448 32 6,664 7,144 Disposals - (19) (47) (941) (1,007) At 30th September 2012 928 1,194 1,211 12,478 15,811 Accumulated depreciation At 1st October 2010 146 615 746 1,888 3,395 Depreciation charge for the year 21 99 56 349 525 Disposals - (264) - - (264) At 30th September 2011 167 450 802 2,237 3,656 Depreciation charge for the year 31 182 152 999 1,364 Disposals - (19) (45) (495) (559) At 30th September 2012 198 613 909 2,741 4,461 Carrying amount At 30th September 2012 730 581 302 9,737 11,350 At 30th September 2011 760 227 237 1,428 2,652
The net book value of assets held under finance leases is GBP6,457,000 (2011: GBP372,000).
The book value of freehold land not depreciated is GBP269,000 (2011: GBP269,000).
16. Inventories 2012 2011 GBP'000 GBP'000 Raw materials and consumables 152 220 Work in progress 4,239 2,844 Finished goods 512 - 4,903 3,064
The cost of inventories recognised as an expense and included in 'cost of sales' amounted to GBP3,912,000 (2011: GBP4,300,000), which represents the purchase of materials used in the delivery of services to customers. The Directors consider that the carrying amount of inventories approximates to their fair value.
17. Derivative financial liabilities 2012 2011 GBP'000 GBP'000 Interest rate swaps - 31
The interest rate swap was terminated during 2012. The notional principal amount of the outstanding interest rate swap contracts at 30th September 2011 was GBP2,250,000. At 30th September 2011, GBP1,500,000 was subject to a fixed interest rate of 2.1% and GBP750,000 was subject to a fixed interest rate of 5.8%. The main floating rates were GBP LIBOR.
18. Trade and other receivables 2012 2011 GBP'000 GBP'000 Non-current Other receivables (see Note 23) 1,724 1,001 Total Non-Current 1,724 1,001 Current Trade receivables 17,445 13,401 Less: provision for impairment (see Note 22c ) (543) (226) Trade receivables net 16,902 13,175 Prepayments and accrued income 17,340 1,482 Due from customers for contract work 404 2,648 Total Current 34,646 17,305 Total 36,370 18,306
The average credit period taken on sales is 40 days (2011: 67 days). The Group has different provision policies for its various divisions which have been determined by reference to past default experience and specific provisions are raised after taking an individual view to the debtor's recoverability.
Due to the nature of the Group's operations, it is common practice for customers to hold retentions in respect of contracts completed. Retentions held by customers as at 30th September 2012 were GBP682,000 (2011: GBP646,000).The Group's exposure to credit risk and impairment losses related to trade and other receivables are disclosed in Note 22.
Under the normal course of the business, the Group does not charge interest on its overdue receivables. The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.
Included in trade and other receivables are costs incurred in respect of a significant customer contract totalling GBP3.2m (2011: GBP2.9m). The Group is in the process of validating and negotiating its final account with the main contractor. The opinion of the Directors is that as negotiations are at an advanced stage no provision is required against this debtor.
19. Analysis of net debt position 2011 Cash flow Other non-cash changes 2012 GBP'000 GBP'000 GBP'000 GBP'000 Cash at bank and in hand 2,567 (1,229) 3,118 4,456 Bank loans (4,713) (3,737) - (8,450) Bank overdraft (2,885) 3,578 (1,189) (496) Obligations under finance lease contracts (233) 990 (6,743) (5,986) Loan notes - - (750) (750) (5,264) (398) (5,564) (11,226)
The Group's exposure to interest rate risks and foreign exchange risk and a sensitivity analysis for financial assets and liabilities is disclosed in Note 22.
20. Borrowings 2012 2011 GBP'000 GBP'000 Non-current Bank loans 7,550 3,913 Obligations under finance lease contracts 3,086 125 Loan notes 750 - 11,386 4,038 Current Bank loans and overdrafts 1,396 3,685 Obligations under finance lease contracts 2,900 108 4,296 3,793 Total 15,682 7,831
Further information on the maturity of the Group's borrowings is set out in Note 22.
The Group's bank overdraft and loan facilities are secured by debentures over the assets of the Group. The debenture agreement includes a fixed and floating charge over the assets of the Group. Finance lease liabilities are secured on the assets to which the contracts relate.
The bank loans at 30th September 2012 comprise a term loan of GBP3,000,000 and a revolving credit facility of GBP5,450,000. The term loan is repayable by regular quarterly instalments of GBP225,000 with the final quarterly instalment plus a terminal payment of GBP750,000 payable in June 2015. Both the term loan and the revolving facility expire in June 2015. The bank loans are at variable rates of interest based on LIBOR. In the prior year, the Group's bank borrowings were partially covered by hedging, with GBP750,000 subject to an interest rate swap and GBP1,477,500 subject to an interest rate cap. These hedging arrangements were discontinued during the year when the Group refinanced its borrowings as the new variable rates of interest were substantially lower and the new facilities have no requirement for interest rate hedging. The net overdraft facility available as at 30th September 2012 was GBP1,000,000 (2011: GBP2,750,000) and the headroom available at the year-end was GBP3,927,000 (2011: GBP2,432,000). There were no other unutilised borrowing facilities.
The loan notes were issued to the vendors of EDS as part of the consideration for the acquisition of that company. They bear interest at a fixed rate of 8.5% per annum and are repayable in full in 2015.
The non-current obligations under finance leases are all repayable between one and five years. The present value of future minimum lease payments is not materially different from the carrying amounts of the obligations under finance leases.
21. Contingent consideration 2012 2011 GBP'000 GBP'000 Non-current 1,704 109 Current 1,643 326 Total 3,347 435
The contingent consideration relates to the acquisitions of AH Allen and RDS in 2011 and EDS in 2012 (see Note 14). These acquisitions provide for contingent consideration to become payable based on the performance of the businesses in the two years immediately following acquisition by the Group, with Gross Profit and Earnings Before Interest Tax Depreciation and Amortisation being the key target measures. These amount have been discounted from the respective acquisition dates. Since the dates of acquisition the discounts have unwound and will continue to unwind for the following two years.
22. Financial instruments (a) Financial risk management
All companies are exposed to capital and market risk, but the Board considers the Group's key elements of financial risk to be:
-- Credit risk -- Liquidity risk -- Interest rate risk -- Foreign currency risk
This note presents information about the Group's exposure to each of the above risks, the Group's management of capital, and the Group's objectives, policies and procedures for measuring and managing risk.
Capital risk management
The Board is responsible for overall Group strategy, acquisition and divestment policy, approval of major capital expenditure projects and consideration of significant financing matters. The Board manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders as well as sustaining the future development of the business. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The capital structure of the Group consists of debt, which includes the borrowings disclosed in Note 20, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings as set out in the Statement of Changes in Equity.
Market risk
Market risk is the risk that changes in the market prices, such as foreign exchange rates and interest rates, will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
The Group's activities expose it mainly to the financial risks of changes in interest rates. The Board reviews and agrees the policy for managing interest rate risk and foreign currency risk and the potential impact of any significant economic changes are discussed at monthly Board meetings.
The Group reviews its treasury position daily, placing any surplus cash on short-term deposits.
(b) Categories of financial instruments
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 3 to the financial statements.
2012 2011 GBP'000 GBP'000 Financial assets(1) At amortised cost: Loans and receivables 16,902 13,175 Cash and cash equivalents 4,456 2,567 Total financial assets 21,358 15,742
(1) Financial assets exclude prepayments, amounts due under long-term contracts, other receivables and other non-current receivables.
2012 2011 GBP'000 GBP'000 Financial liabilities(2) At amortised cost: Trade and other payables 21,685 8,766 Obligations under finance leases 5,986 233 Other borrowings and overdrafts 9,696 7,598 Contingent consideration 3,347 435 Derivatives - designated as cash flow hedges - 31 Total financial liabilities 40,714 17,063
(2) Financial liabilities exclude tax and social security, deferred income and other non-current payables.
(c) Credit risk
The Group's principal financial assets are cash and cash equivalents and trade receivables, which represent the Group's maximum exposure to credit risk in relation to financial assets.
The Group's credit risk is primarily attributable to its trade receivables. The amounts presented in the consolidated balance sheet are net of allowances for doubtful receivables, estimated by the Group's management based on prior experience and their assessment of the current economic environment.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults.
The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the Group's maximum exposure to credit risk.
The Group's exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved financial institutions.
Trade receivables
Trade receivables consist of a large number of customers, spread across diverse areas within the UK and the Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group's customer base, including default risk of the industry and country, in which the customers operate, has less of an influence on credit risk.
The Directors consider that the carrying amount of trade receivables, which are non-interest bearing, approximates to their fair value.
The Group does not have any significant credit risk exposure to any single counterparty or any Group of counterparties having similar characteristics. The Group defines counterparties as having
similar characteristics if they are related entities.
Before accepting any new customer, the Group runs credit checks to assess the potential customer's credit quality. The Group monitors exposure to individual clients and all customers are subject to standard terms of payment for each division which are, on average, 30 days.
The analysis of trade receivables in excess of 30 days old but not impaired is as follows:
2012 2011 GBP'000 GBP'000 31 - 60 days 5,855 3,084 61 - 90 days 1,229 1,176 91-120 days 603 517 More than 120 days 646 1,200 8,333 5,977 ========= ======== ============
The above analysis split by business segment is set out below:
At 30th September 2012
Remediation Decommissioning Consulting Total 2012 2012 2012 2012 GBP'000 GBP'000 GBP'000 GBP'000 31 - 60 days 2,895 1,038 1,922 5,855 61 - 90 days 767 39 423 1,229 91-120 days 244 188 171 603 More than 120 days 472 66 108 646 4,378 1,331 2,624 8,333
At 30th September 2011
Remediation Decommissioning Consulting Total 2011 2011 2011 2011 GBP'000 GBP'000 GBP'000 GBP'000 31 - 60 days 2,135 - 949 3,084 61 - 90 days 843 - 333 1,176 91-120 days 390 - 127 517 More than 120 days 772 - 428 1,200 4,140 - 1,837 5,977
The analysis split by geographical segment is set out below.
At 30th September 2012
United Kingdom Canada Australia Total 2012 2012 2012 2012 GBP'000 GBP'000 GBP'000 GBP'000 31 - 60 days 4,661 965 229 5,855 61 - 90 days 1,176 53 - 1,229 91-120 days 577 26 - 603 More than 120 days 594 52 - 646 7,008 1,096 229 8,333
At 30th September 2011
United Kingdom Canada Australia Total 2012 2012 2012 2012 GBP'000 GBP'000 GBP'000 GBP'000 31 - 60 days 3,084 - - 3,084 61 - 90 days 1,176 - - 1,176 91-120 days 517 - - 517 More than 120 days 1,200 - - 1,200 5,977 - - 5,977
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments when there is objective evidence that the asset is impaired. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined by references to past default experience and historical data of payment statistics for similar financial assets.
Movement in the provision for impairment:
2012 2011 GBP'000 GBP'000 Balance at beginning of the year 226 243 Increase / (decrease) in impairment provision recognised 93 (11) Acquired with subsidiary undertakings 336 135 Receivables written back (112) (141) 543 226
The creation and release of provisions for impaired receivables has been included in 'administrative expenses' in the income statement.
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there is no further credit provision required in excess of the above amount.
(d) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Responsibility for liquidity risk management rests with the Board of Directors. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring bank covenant compliance, forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Details of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk are disclosed in Note 20.
Liquidity and interest risk tables
The following tables detail the Group's expected maturity for its financial assets and liabilities. The tables below have been drawn up based on the undiscounted contractual maturities of the financial assets and liabilities. No material interest is expected to accrue on the interest bearing assets, which represent cash deposits.
Book Undiscounted Cashflows Value --------- ------------------------------------------------------------------------- 30th September 2012 Less 1 - 3 3 months 1-5 years 5 + Total than monthsGBP'000 to 1 year GBP'000 years GBP'000 GBP'000 1 month GBP'000 GBP'000 GBP'000 Financial assets Non-interest bearing 16,902 16,902 - - - - 16,902 Variable interest rate instruments 4,456 4,456 - - - - 4,456 21,358 21,358 - - - - 21,358 Financial liabilities Non-interest bearing 25,032 21,749 - 1,579 1,704 - 25,032 Variable interest rate instruments 15,682 738 950 2,608 11,386 - 15,682 40,714 22,487 950 4,187 13,090 - 40,714 Less 1 - 3 3 months 1 - 5 5 + Total 30th September 2011 GBP'000 than monthsGBP'000 to 1 year years years GBP'000 1 month GBP'000 GBP'000 GBP'000 GBP'000 Financial assets Non-interest bearing 13,175 13,175 - - - - 13,175 Variable interest rate instruments 2,567 2,567 - - - - 2,567 _____ --------- --------- --------------- ----------- ---------- --------- --------- 15,742 15,742 - - - - 15,742 _____ --------- --------- --------------- ----------- ---------- --------- --------- Financial liabilities Non-interest bearing 9,232 8,797 - 326 109 - 9,232 Variable interest rate instruments 7,831 2,894 227 672 4,038 - 7,831 17,063 11,691 227 998 4,147 - 17,063 (e) Interest rate risk
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument, will fluctuate due to changes in market interest rates. As the Group has no significant interest-bearing assets, the Group's income and operating cash flows are substantially independent of changes in market interest rates.
The Group is exposed to interest rate risk primarily though borrowing funds at floating interest rates. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. The Group manages interest rate risk on borrowings by ensuring access to diverse funding and through monitoring interest rate movements with weekly reports.
Interest rate risk is reviewed on a regular basis and if considered necessary a strategy to minimise any potential risk through interest rate swaps will be discussed and implemented.
The Group's exposures to interest rates on financial assets and financial liabilities are detailed below.
Interest rate sensitivity analysis
If interest rates had been 100 basis points higher or lower and all other variables were held constant, the Group's profit for the year would increase or decrease by GBP157,000 (2011: GBP45,000) in respect to exposure to the Group's borrowings and cash and cash equivalents. For floating rate liabilities the analysis is prepared assuming the amount of the liability at the balance sheet date was outstanding for the whole period.
(f) Foreign currency risk
The Group's exposure to foreign currency risk at 30(th) September 2012 is as follows. This is based on the carrying amount for monetary financial instruments.
Canadian Australian US Argentine Dollar Dollar Dollar Peso Sterling Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Trade receivables 1,530 229 - - 15,143 16,902 Cash and cash equivalents 1,337 116 67 62 2,874 4,456 Obligations under finance lease contracts (2,844) (853) - - (2,289) (5,986) Trade and other payables (4,198) (1,833) - - (15,654) (21,685) Other borrowings and overdrafts - - - - (9,696) (9,696) Contingent consideration - - - - (3,347) (3,347) Net exposure (4,175) (2,341) 67 62 (12,969) (19,356)
All exposures detailed above relate to EDS which was acquired during 2012. There was no significant foreign currency risk exposure at 30(th) September 2011.
The following significant exchange rates were applied during the year ended 30th September 2012:
Reporting date Average rate spot rate Canadian Dollar 1.59 1.59 Australian Dollar 1.54 1.55 US Dollar - 1.62 Argentine Peso - 7.58
A strengthening / (weakening) of the Canadian Dollar, Australian Dollar, US Dollar and Argentinian Peso against all other currencies at 30th September 2012 would have affected the measurement of financial instruments denominated in foreign currency and increased / (decreased) equity and profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remains constant and ignores any impact of forecast sales and purchases.
Profit or Equity loss Strengthening Weakening Strengthening Weakening At 30th September 2012 GBP'000 GBP'000 GBP'000 GBP'000 Canadian Dollar (10% movement) (837) 837 110 (110) Australian Dollar (10% movement) (440) 440 9 (9) US Dollar (10% movement) 7 (7) - - Argentine Peso (10% movement) 6 (6) - - (g) Fair value of financial instruments
The fair value of interest rate swaps is calculated at the present value of the estimated future cash flows.
The Directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial statements approximate to their fair values due to the short maturity of the instruments or because they bear interest at rates approximate to the market.
23. Trade and other payables 2012 2011 GBP'000 GBP'000 Non-current Other payables 1,724 1,001
In 2006, the Group recorded a provision of GBP1.0m in respect of a liability arising on the acquisition of Silverdell UK. The Group has a corresponding asset relating to the indemnities from the vendors of Silverdell UK in respect of this provision. A similar potential liability of GBP0.7m was recorded in 2012 arising on the acquisition of EDS, with the corresponding indemnification asset included within non-current trade and other receivables. These non-current other payables relate to pre-acquisition taxation matters.
2012 2011 GBP'000 GBP'000 Current Trade payables 14,189 6,031 Other taxation and social security 6,066 2,098 Other payables 7,496 2,735 Payments received in account 1,332 - 29,083 10,864
An analysis of the maturity of debt is given in Note 22(d).
The Directors consider that the carrying amount of trade payables approximates to their fair value.
The Group's policy is to fix payment terms when agreeing the terms of each transaction. It is the Group's general policy to pay suppliers according to the agreed terms and conditions, provided that the supplier has complied with those terms.
Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing cost and they include retention amounts held over defect liability periods. The average credit period taken for trade purchases is 67 days (2011: 69 days) for the Group. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.
There are no suppliers who represent more than 10% of the total balance of trade creditors in either 2012 or 2011.
The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe. Therefore, under the normal course of business, the Group is not charged interest on overdue payables.
24. Share capital 2012 2011 No. GBP'000 No. GBP'000 Allotted, called up and fully paid Ordinary shares of 1p each 313,213,910 3,132 180,839,717 1,808 Movement in issued share capital At 1st October - 1p ordinary shares 180,839,717 1,808 151,654,717 1,516 Shares issued in the year 132,374,193 1,324 29,185,000 292 At 30th September 313,213,910 3,132 180,839,717 1,808
On 18 June 2012 the Company issued 52,272,727 new shares to the vendors of EDS as part of the consideration for that acquisition. The price paid was 11.0p per share, providing consideration of GBP5,750,000 and giving rise to a share premium of GBP5,227,000. On the same date and at the same price 80,101,466 new shares were issued as part of placing. The placing yielded consideration of GBP8,811,000 and gave rise to a share premium of GBP8,010,000 before expenses.
Barclays Bank PLC holds 11,374,179 (2011: 11,374,179) warrants valid until 2017 to subscribe for ordinary shares in the Company at 5p (2011: 5p) per ordinary share. Marwyn Neptune Fund LP holds warrants valid until 2013 to acquire up to 3,220,105 (2011: 3,220,105) ordinary shares in the Company at 75p (2011: 75p) per ordinary share. Details of options over the Company's share capital are disclosed in Note 26.
25. Other financial commitments
Capital commitments
At 30th September 2012, the Group had capital commitments for capital expenditure contracted for but not provided totalling GBP2,671,000 (2011:GBPNil).
Operating lease commitments
The Group had outstanding total commitments under non-cancellable operating leases at 30th September which fall due as follows:
2012 2011 Land and Land and buildings Other buildings Other GBP'000 GBP'000 GBP'000 GBP'000 Within one year 914 956 331 715 Within two to five years 1,970 500 730 734 After five years 322 - 159 2 3,206 1,456 1,220 1,451 26. Employee share schemes
The Group has adopted share incentive arrangement plans as set out below.
Equity-settled share option scheme
The Group has a share option scheme for certain employees of the Group. Options are exercisable at a price equal to the average quoted market price of the Company's shares on the date of grant. The vesting period is three years. If the options remain unexercised after a period of five years from the date of grant, the options expire. Options are forfeited if the employee leaves the Group before the options vest.
Details of the share options outstanding during the year are as follows:
2012 2011 Weighted Weighted average average exercise Number exercise Number of price of share price share options GBP options GBP Outstanding at beginning of year 15,056,266 0.090 13,225,247 0.087 Granted during the year 10,000,000 0.120 2,190,190 0.115 Forfeited during the year (1,283,854) (0.090) (359,171) (0.090) Lapsed during the year (4,800,000) (0.090) - - Outstanding at the end of the year 18,972,412 0.100 15,056,266 0.090 Exercisable at the end of the year 6,782,221 0.090 - -
The options outstanding at 30th September 2012 had a weighted average remaining contractual life of 9.0 years (2011: 8 years). In 2012, options over 10,000,000 shares were granted on 30th September 2012. The aggregate of the estimated fair values of the options granted on that date is GBP724,000.
All the options outstanding at 30th September 2012 have non market-based performance conditions, being dependent on the Company's future adjusted earnings per share.
The inputs into the valuation models used for options granted each year are as follows:
2012 2011 Weighted average share price GBP0.131 GBP0.105 Weighted average exercise price GBP0.120 GBP0.115 Expected volatility 70% 77% Expected life 6 years 6.5 years Risk-free rate 0.94% 3.50% Expected dividend yield 2% 0%
Expected volatility was determined by calculating the historical volatility of the Group's share price over the previous 1.5 years. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations. The risk free rate of return is the yield on zero coupon UK government bonds with a term similar to the expected life of the option.
The charge in the income statement relating to the above share-based payments was GBP267,000 (2011: GBP257,000).
27. Contingent liabilities
There are Group cross guarantees from the Company for all monies due to certain of the Group's banks and surety lenders. The total potential exposure to the Group's banks under such guarantees was GBP5,523,000 (2011: GBP5,031,000). No monies were outstanding at 30th September 2012 (2011: GBPnil). In the normal course of business there are contingent liabilities including the provision of bonds in respect of completed and uncompleted contracts.
28. Related party transactions
During the year to 30th September 2012, the Group paid GBP30,000 (2011: GBP30,000) to Marwyn Capital LLP for Directors' fees and GBP112,000 (2011: GBP90,000) to Marwyn Partners Ltd for rent and other office services. At the end of that year GBP31,000 (2011: GBPNil) remained outstanding.
Mark Watts is a partner in Marwyn Capital LLP and Marwyn Investment Management LLP and a shareholder in Marwyn Investments Group Ltd, which owns 100% of Marwyn Partners Ltd. Marwyn Neptune Fund LP is managed by Marwyn Investment Management LLP and beneficially owns shares and warrants in the Group.
During the year to 30th September 2012, Kalistar LLP, a partnership of certain of the Executive Directors of Silverdell (UK) Ltd, charged GBP48,000 (2011: GBP48,000) for the provision of cars used by some of the Directors of Silverdell (UK) Ltd. At the end of that year GBPNil (2011: GBP14,000) remained outstanding.
One property occupied by Silverdell (UK) Ltd is owned by the pension fund in which Sean Nutley has an interest. The property is subject to a market rent of GBP35,000 (2011: GBP29,000) per annum and GBP9,000 (2011: GBPnil) remained outstanding at the year-end.
Loan notes of GBP750,000 (2011: GBPNil) were payable to vendors of EDS who are now shareholders of Silverdell PLC and the interest charged in respect of these was GBP18,000 (2011: GBPNil). The Group also paid consulting fees of GBP38,000 to Andrew Routledge who was a major shareholder in the Company.
Parent Company Balance Sheet
As at 30(th) September 2012
Company number: 5755897
2012 2011 Notes GBP'000 GBP'000 Fixed assets Investments 31 42,331 24,121 Tangible assets 32 57 49 42,388 24,170 Current assets Debtors: amounts falling due within one year 33 554 6,087 Creditors: amounts falling due within one year 34 (5,204) (9,582) Net current liabilities (4,650) (3,495) Total assets less current liabilities 37,738 20,675 Creditors: amounts falling due after one year 34 (9,856) (3,913) Total net assets 27,882 16,762 Capital and reserves Called up share capital 24 3,132 1,808 Share premium account 35 15,283 2,456 Equity reserve 35 788 721 Other reserve 35 4,135 4,135 Profit and loss account 35 4,544 7,642 Total shareholders' funds 27,882 16,762
The financial statements were approved by the Board of Directors and authorised for issue on 4 December 2012.
They were signed on behalf of the Board of Directors.
Ian Johnson
Director
29. Significant accounting policies
The separate financial statements of the Company have been prepared on the historical cost basis and under the going concern assumption. The accounting policies are summarised below and have been applied consistently throughout the year and the preceding year. The separate financial statements are presented as required by the Companies Act 2006. The Company has elected to prepare its Parent Company financial statements in accordance with UK GAAP.
Taxation
The tax currently payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items which are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date.
Deferred taxation is provided in full on all timing differences that result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, subject to the recoverability of deferred tax assets. Deferred tax assets and liabilities are not discounted.
Share-based payments
The Company makes equity settled share-based payments to the Directors, which are measured at fair value at the date of grant. The fair value of share options issued with non-market vesting conditions has been calculated using the Black Scholes model. For all other share awards, the fair value is determined by reference to the market value of the share at the date of grant. For all share schemes with non-market related vesting conditions, the likelihood of vesting has been taken into account when determining the associated charge. Vesting assumptions are reviewed during each reporting period to ensure they reflect current expectations.
The Company also makes equity settled share-based payments to certain employees of certain subsidiary undertakings. Equity settled share-based payments that are made to employees of the Company's subsidiaries are treated as increases in equity over the vesting period of the award, with a corresponding increase in the Company's investments in subsidiaries, based on an estimate of the number of shares that will eventually vest.
Any payments received from subsidiaries are applied to reduce the related increases in investments in subsidiaries.
Accounting for share-based payments is the same as under IFRS 2 and details on the schemes and option pricing models relevant to the charge included in the Company financial statements are set out in Note 26 to the consolidated financial statements of the Group for the year ended 30th September 2012.
Investments
Investments represent equity holdings in subsidiaries, joint ventures and associates and are held at cost less provision for impairment.
Tangible fixed assets and depreciation
Tangible fixed assets are stated at historic purchase cost net of accumulated depreciation and any provision for impairment. Cost comprises the original purchase price of the asset and the cost attributable to bringing the asset to its working condition for its intended use. Depreciation is provided on all tangible fixed assets, at rates calculated to write off the cost or valuation, less estimated residual value, of each asset on a straight-line basis over its expected useful life, as follows:
Computer equipment 33% on cost
Impairments in the value of fixed assets are charged to the profit and loss account.
30. Parent Company profit and loss account
The Company has taken advantage of the exemption afforded by the Companies Act 2006 and has not presented its own profit and loss account. The loss for the year dealt with in the financial statements of the Parent Company is GBP3,298,000 (2011: GBP1,711,000).
31. Investments 2012 GBP'000 Cost At 1(st) October 2011 40,841 Capital contributions to subsidiaries arising from share based payments 170 Acquisition of EDS Group Holdings Ltd 18,040 At 30th September 2012 59,051 Impairment At 1st October 2011 and 30th September 2012 (16,720) Carrying amount At 30th September 2012 42,331 At 30th September 2011 24,121
Details of the principal subsidiary undertakings are as follows:
Proportion Country of of ordinary Company incorporation shares held Principal activity Silverdell (UK) Ltd England and Asbestos and environmental Wales 100% services Redhill Analysts Ltd England and Wales 100% Consulting services Kitsons Group Ltd England and Asbestos and environmental Wales 100% services RDS Asbestos Management England and Consultants [UK] Ltd* Wales 100% Consulting services EDS Group Holdings Ltd England and Wales 100% Holding company Euro Dismantling Services Provision of dismantling, Ltd** England and demolition, industrial Wales 100% services and asset recovery EDS Commissioning Canada Canada Provision of dismantling, Inc** demolition, industrial 100% services and asset recovery EDS Australia Pty Ltd Australia Provision of dismantling, demolition, industrial 100% services and asset recovery Toplam Muhendislik ve Turkey Dismantling, demolition, Taahhut Ithalat Ihracat decommissioning and Limited Sirketi** 100% asset recovery EDS Plant Solutions Ltd** England and Wales 100% Hire services Process Plant Solutions England and Ltd** Wales 100% Asset recovery Waste Recycling and Destruction England and Waste disposal and recycling Ltd** Wales 100% services
* Held via Redhill Analysts Ltd
** Held via EDS Group Holdings Ltd
32. Tangible fixed assets
The Company acquired owned computer equipment with a cost of GBP 39,000 (2011: GBP30,000) during the year and incurred a depreciation charge on these assets of GBP 31,000 (2011: GBP19,000). The closing net book value of tangible fixed assets was GBP57,000 (2011: GBP49,000).
33. Debtors
Amounts falling due within one year:
2012 2011 GBP'000 GBP'000 Other debtors and prepayments 103 169 Amounts due from group undertakings 234 5,917 Corporation tax recoverable 217 - Deferred tax asset - 1 554 6,087
The deferred tax asset at 30(th) September 2011 related to timing differences on tangible fixed assets and the amount charged to the profit and loss account for the year was GBP1,000 (2011: GBP14,000).
34. Creditors
Amounts falling due within one year
2012 2011 GBP'000 GBP'000 Trade creditors 503 - Bank overdraft (secured) 395 2,072 Bank loans (secured) 900 800 Other creditors and accruals 427 465 Amounts due to subsidiary undertakings 1,423 6,245 Contingent consideration payable 1,556 - 5,204 9,582
The carrying amount of trade payables approximates to their fair value.
Amounts falling due after more than one year
2012 2011 GBP'000 GBP'000 Bank loans (secured) 7,550 3,913 Loan notes 750 - Contingent consideration payable 1,556 - 9,856 3,913
Full details of the Company's bank loans are disclosed in Notes 20 and 22 to the Group financial statements.
Full details of the contingent consideration payable are disclosed in Note 21 to the Group financial statements.
35. Share premium account and reserves Share premium Profit account Equity and loss GBP'000 reserve Other reserves account Total GBP'000 GBP'000 GBP'000 GBP'000 At At 1st October 2011 2,456 721 4,135 7,642 14,954 Share-based payment credit in the year - 267 - - 267 Retained loss for the year - - - (3,298) (3,298) Shares issued 13,236 - - - 13,236 Expenses of share issue (409) - - - (409) Transfer - (200) - 200 - At 30th September 2012 15,283 788 4,135 4,544 24,750
The remaining balance in other reserves is not distributable and relates to the premium arising on shares issued as consideration for the acquisition of subsidiary companies and warrants issued to Marwyn Neptune Fund LP in consideration for their participation in placing of shares on 19 July 2006.
36. Related parties
The Company has taken advantage of the exemption available under FRS 8 Related Party Disclosures not to disclose details of transactions between wholly owned Group companies.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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