8 December 2011 – final results
The specialist engineering group Redhall has revealed results for the year to 30 September much in line with expectations. Revenues before exceptionals declined to £126.6m (2010: £144.7m) and adjusted pre-tax profits fell to £3.9m (2010: £7.0m). Fully- taxed, adjusted earnings per share fell to 9.55p (2010: 17.14p). The group has made an exceptional provision of £11.3m, mainly relating to the Vivergo contract which has been in dispute for some time now. Net debt at the year end was £10.2m (2010: net cash £5.4m) with the sharp increase in borrowings due the amount in dispute with Vivergo. Despite the uncertainties caused by the latter, the group has maintained a strong order book of £116m (2010: £115m). Trading in the second half of the year was much improved on the first half and this trend has continued into the new financial year. The commencement of the UK nuclear build programme will provide the group with significant opportunities whilst a number of new contracts have also been won. Nevertheless, the short term outlook for the shares is clearly dependent on the result of the Vivergo claim. This could take a considerable time to resolve and with this overhanging the company the shares are a HOLD.