Profuse apologies for today's report being late, I came down with a bug overnight. I want to keep the sequence of reports intact, so here we are better late than never.
Having said that, there are hardly any results today that fall within my remit.
Silverdell (LON:SID) have issued a trading statement relating to the six months to 31 Mar 2013. It looks OK, with trading in line with expectations. Turnover has doubled to £62m for the six months, from the acquisition of EDS Group. The order book is strong at £210m.
Adjusted EBITDA is expected to be £4.5-5.0m, so assuming no seasonality to the year that looks like £9-10m annually.
I like Silverdell, it looks to be on a reasonable valuation, at a market cap of about £50m at 16.5p per share. Broker consensus is 2.05p this year, and 2.35p next year, putting it on a PER of only about 8 times this year's, and under 7 times next year's.
There is some debt however, of just under a third of the market cap, at £15-16m.
Dividends only started in 2012, but are forecast to rise strongly from a low base, such that the yield should be about 2% for this year, and 3% next year.
Management here are shareholder-friendly, and regularly present at Mello investor evenings, where I have seen them twice, and been impressed with their down-to-earth CEO, who rose up from within the ranks. At the most recent meeting he outlined how there are big market opportunities in nuclear decommissioning over many years, and whilst their work is fairly low margin, it seems to be a good area of growth to operate in. They also do asbestos removal.
On the downside their working capital profile is not great, with SID having to pay staff well before they are paid by the end customer. So growth comes at the cost of tying up quite a lot of capital. Having said that the bad debt risk is minimal because of the nature of their customer base.
It's not the most exciting share out there, but is likely in my view to be a good steady, slow burner, with gradual share price appreciation likely over the next few years.
I see that…
