12th Jun 2014 11:04
LONDON (Alliance News) - Struggling engineering firm Redhall Group PLC Thursday said its losses widened in the first half, a week after Chief Executive Richard Shuttlework resigned as the company lowered its expectations for its current financial year for a second time in two months amid delays in the timing of major contracts.
On May 2 the company warned that is was experiencing delays converting major opportunities into contract awards, and had said at that time that it expected its performance to be below market expectations, although not materially so.
Finance Director Chris Lewis-Jones stepped down at that time.
Last week, Redhall promoted Commercial Director Phil Brierley to be chief executive, while naming Chris Kelly as permanent finance director.
Redhall on Thursday posted a pretax loss of GBP1.0 million for the six months ended March 31, compared with a GBP449,000 loss a year earlier, as revenue dropped to GBP50.6 million from GBP56.4 million.
It said engineering revenue fell 20% on the year before, as the industrial market continues to be challenging for its customers. The firm said a change in its clients' spending patterns in the first half of the year, coupled with its decision not to undertake high risk projects, were contributory factors in the reduced activity in this part of the business.
The nuclear division also struggled with revenue, down some 4.6%. Redhall said the division continues to be affected by reduced volume on two key framework contracts. However, it has successfully secured GBP4.7 million of work from two new framework agreements with Dounreay Site Restoration Ltd and the Low Level Waste Repository facility in Cumbria.
On a more positive note, Redhall said revenue for its manufacturing arm rose 8.1%, though this performance was lower than had been expected due to substantial delays suffered by key clients in delivering their programme of works.
Overall, Redhall said the group order book continues to "fluctuate". The order book currently stands at GBP85 million, down from GBP111 million a year earlier.
"Our high level prospects remain good and we are close to realising work in several areas of the business, but particularly so in manufacturing and in the food segment of our engineering division," the company said.
Chairman David Jackson said there has been much change in the past 18 months, and the firm is looking towards a period of "stability". He said the new management team has set realistic targets for the future and will concentrate on "maximising profitable execution".
In light of its woes, the company said it won't pay a dividend but said this policy will be reviewed on a bi-annual basis.
Redhall shares were untraded Thursday. They were last quoted at 26.50 pence on Wednesday.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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