14/12/2007
The only quoted asbestos industry consolidator, Silverdell delivered encouraging first full year results to September, making pre-tax profits of £2.2m from £38.5m turnover.
Listed as shell company Bow Lane Capital in April 2006, the acquisition of South East-based asbestos remediation outfit Silverdell a few months later laid the platform for this group’s expansion in a fragmented and legislation-driven sector. Silverdell has since gone on to make three further acquisitions in line with its corporate brief of creating a nationwide ‘one-stop shop’ for asbestos services, including removal, remediation and consultancy.
These include Redhill Analysts, a high-margin consultant whose sales arise mainly from asbestos surveys, and Kitsons, a business bringing geographic branch coverage throughout the UK and an 'entrée' into the buoyant nuclear and petro-chemical sectors. Post-year end, hotel sector specialist Swift Asbestos was bought in an earnings-enhancing complementary deal. Further select deals – acquisition criteria are stringent – are a certainty, though management is determined not to overpay.
The original Silverdell business, continuing to foster long-term ties with clients including Shell and Marks & Spencer, drove performance as one would expect, delivering an impressive 370% profits push to £4.6m from £30.5m revenues in another record year, whilst Kitsons made an early contribution. Redhill’s nine-month £700,000 profits input was a mild disappointment, reflecting a slower than expected summer and investment spend to ensure growth. For 2008, analysts are looking for significantly improved earnings of 12.3p (8.3p), placing the shares, recommended by Growth Company Investor at 160.5p, on an undemanding forward multiple of 12.4. Keep buying.
| Market cap: | £62.04m |
| PE Forecast: | 12.4 |
| Share price: | 152.5p |
| AIM | £8.96m |
21.50p
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1.00p
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| 14/12/2007 |
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