Siteserv denies debt levels threaten its viability

IRISH infrastructural support services group, Siteserv has denied that its debt levels pose a risk to its viability.

The Dublin-headquartered company — which only last month reported a 9% year-on-year increase in first-half revenue to €92.2 million said, via a stock exchange announcement yesterday, it is “exploring a number of strategic and corporate options” with its chief lender, the Irish Bank Resolution Corporation (IBRC), in advance of the expiration of its existing debt facilities next December. The company only entered into this banking agreement in July.

Yesterday’s statement added: “At this stage, it is not possible to predict the outcome of this exercise, nor quantify the financial impact for shareholders.

“However, the exercise is not expected to have any negative impact for staff, customers, key business relationships or suppliers.”

The statement was made following media reports commenting on its net debt levels — which are expected to reach €144m by the end of its current financial year at the end of April.

However, despite the relatively defiant nature of yesterday’s statement, the debt, according to David O’Brien of Goodbody Stockbrokers, “leaves the company with limited options”.

Last month’s first-half results from Siteserv — covering the six months to the end of October — also showed a 4% increase in operating profit and a 60% rise in pre-tax profits to €800,000.

In 2011 the company recorded a number of new contract wins across Ireland and Britain (with the likes of Bord Gáis, RTÉ, the ESB and BSkyB) and gave a cautiously optimistic growth-orientated outlook, despite the tough trading environment.


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