RNS Number : 9671V
Water Hall Group Plc
04 June 2008
Water Hall Group Plc
AGM Statement
Your Company has a strong balance sheet with cash and listed investments in excess of
£4.0 million and net assets in excess of 10p per
share, when a 1.76p per share surplus arising from a recent external valuation of the Group's
landfill resources not reflected in the
balance sheet is included.
As matters presently stand, the longevity of the Company's existing operational
activities, and therefore the sustainable and future
growth in its income and earnings capability depend to a large degree on the ability to secure
additional planning consents for the Group's
remaining operating assets, which are centred on the Bunkers landfill and topsoil recovery
operation. Currently, your board is pursuing an
appeal to the Secretary for State in respect of a planning application, refused last December
by Hertfordshire County Council, to vary a
pre-existing planning consent to enable the development of a 'state-of-the-art' materials
recycling centre. Given that the Company's
operation has been involved for over 60 years in gravel extraction and waste management, the
site's ideal geographical position in relation
to its customer base, and the recognised need for modern waste processing and recycling
facilities in Hertfordshire, your board and its
relevant advisers believe that the planning appeal has merit.
Now that the Southfield Wood landfill site has ceased infilling, the objective is to
return the site to the best possible quality
agricultural land consistent with that in the locality. Your board believes that the future
for agricultural land looks positive both in
terms of demand and value and therefore every effort is being made to maximise that value.
As your board had suggested, 2007 proved to be a difficult year on the trading front with
the cessation of activities at Southfield Wood
in the first quarter and the decision to close the collections business. The reduction in the
size of the operating business means that the
high levels of cash generation of the past few years cannot be sustained without a broadening
of the operational capability; hence the
board's pursuit of a variation to the pre-existing planning consent mentioned earlier.
In November of last year, your board made an investment in Petards Group plc, an AIM
listed company specialising in providing security
and surveillance systems both in the UK and USA. We continue to monitor the performance of
Petards and the potential for the investment to
add value to the Water Hall Group.
Turning to our management objectives for 2008, maximising the returns from Bunkers Hill
Landfill remains a priority. The operating unit
has undergone a rigorous downsizing of staffing levels, both in 2007 and the first quarter of
2008. The business serves the construction
industry and the impact of the 'credit crunch' is already being felt with input volumes
proving erratic. To counter this, management is
targeting projects expected to have a more immediate impact on sales.
Your board does not expect to make a decision during 2008 in respect of the Company making
a planning application relating to the
minerals reserves owned or controlled at Bunkers South and Broad Green. However, the status of
the Hertfordshire Local Minerals Plan,
adopted by the County Council two years ago, is kept constantly under review, in particular
for any shortfall of production against demand
and any failure of the approved sites to come forward for planning consent.
In the event that the appeal in respect of the Materials Recycling Facility does not
succeed, it will be your board's intention to seek
alternative uses for the land and buildings north of the B158, in particular those buildings
which enjoy pre-1947 consented uses. While new
planning consents will likely be required, it would be the intention that any planning
applications fall within 'green belt' policy.
Your board believes that the Company's strong balance sheet and cash position coupled with
the recent drop in asset values of many other
companies as a consequence of the 'credit crunch' and the uncertainty this has created in
markets, provides the best conditions for some
years to acquire good businesses at realistic prices. The objectives are two-fold; first to
lessen the Group's dependence upon the earnings
and cash generative capabilities of the existing waste management activity, and second to
acquire a business which has the ability to be
developed both organically and through complementary acquisitions, in turn providing the Group
with a platform for sustainable growth.
A number of acquisitions have already been reviewed and considered unsuitable on the
grounds of the quality of the business or price.However, your board remains active in the area of acquisition search and retains an open mind
as to whether shareholders' best interests
would be served by a merger of Water Hall Group with an entity requiring cash and management
or by making an acquisition within its own
fundable size. Any acquisition of this nature would be expected to be funded through a
combination of existing cash resources and a
manageable level of debt, plus, if appropriate, an issue of new equity.
Your board's overriding objective is to provide the platform to develop sustainable growth
in the share price, both in relative and real
terms, and therefore create genuine shareholder value. While the Group has witnessed a
significant turnaround in its balance sheet, your
board believes that it should follow initiatives likely to result in a better alignment of the
share price and the underlying net assets per
share.
Your board believes that this process could be enhanced through improving the liquidity of
the shares available in the market to be
traded, improved communications with the market and a more easily understood and sustainable
revenue and earnings platform.
While 2008 promises to be challenging, the board is confident that it will prove a year of
transition for your Company which it hopes
will result in it becoming more attractive to a wider range of investors with attendant
benefits for all shareholders.
Raschid Abdullah
Chairman
All nine resolutions were carried at the Annual General Meeting held today on 4 June
2008.
Enquiries:
Raschid Abdullah
Chairman Water Hall Group plc 07768 905004
John Wakefield
Director, Corporate Finance Blue Oar Securities Plc 0117 933 0020
This information is provided by RNS
The company news service from the London Stock Exchange
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