Silverdell, what's going on?

Being a self regulated market AIM can throw up potential nightmare stories for investors from time to time. At face value things can look good with a company, results look impressive, news flow from the company itself positive, but the share price is declining, an investor may wonder why or question whether there is something not quite right going on?

Other than market drift which can often hit smaller company shares in a big way, it's difficult to know sometimes why a share price of a company that may be on reasonable fundamentals is falling. It might be technical, sometimes there's a rumour which often the company will deny. Investors will often blame the market makers, the short sellers, bears of the company, but with AIM companies a bolt out of the blue can happen at any time it would seem. Shareholders are often the last to know.

One company I've been following for a while is Silverdell, in part because although the share price was falling, and other than a rumour that a cash call to aid further growth might be needed - denied by the company, it seemed to have a lot going for it. Then suddenly today its shareholders were presented with this.

Suspension of Dealings

Silverdell has requested a suspension of its shares from trading pending clarification of the Group's financial position.  Further announcements will be made as and when appropriate.

http://www.investegate.co.uk/silverdell-plc--sid-/rns/suspension-of-dealings/201307020730033712I/

Silverdell investors will have woken up to this, I suspect largely unexpected news and wondered to themselves what is going on? After all, the company itself was very bullish if it's own recent statements are anything to go by.

This is what Silverdel's CEO Sean Nutley said in April.

‘We are targeting 15% year-on-year revenue growth over the next three years. The market only has us at 8%,’ he states. ‘At the 8% forecast growth rate, we can support that growth without going out for further funding from a bank or elsewhere. If we want to go to 15% growth, we will need additional financial support.’

http://www.sharesmagazine.co.uk/articles/silverdell-mulls-the-price-of-growth

Then in June.

Today Nutley tells me that Silverdell no longer needs additional working capital to hit the 15% target. ‘We’ve been able to get the right mix of business and right payment profile to meet our strategic targets,’ he states. Additional money is only needed if the group finds a way to ‘supercharge’ growth beyond the 15% rate, adds the CEO.

http://www.sharesmagazine.co.uk/news/silverdells-communication-challenge

So, have they suspended because they want more funding to "supercharge" at 15%+?  Most unlikely. Shares tend to be suspended for far more serious reasons, although you would be forgiven for wondering where the serious reason is in this case, but there just might be one.

One thing that does stand out is this.

Kitsons Environmental Europe Limited

Posted on June 13, 2013 by admin

Kitsons Environmental Europe Limited has had a winding up petition advertised against it today

http://www.winding-up-petition.co.uk/kitsons-environmental-europe-limited/

Kitson was part of EDS, taken over by Silverdell.

More can be found here.

http://boards.fool.co.uk/sid-12840001.aspx?sort=whole

For the moment no one knows for sure what is going on at Silverdell, least of all the shareholders, other than those close to the company of course. It will be interesting to see how long it takes for them to let everyone else know what they know and what the damage really is.

As always and especially with AIM shares a strong case of buyer beware has to be made. AIM is more difficult because of the self regulation. For the small investor not all is what it may seem at face value and quite often you won't know about it until it is too late.