7 April 2011 – trading update

The group has confirmed in a trading statement that it believes that it will meet revised expectations following last month’s profits’ warning.  This has seen profit forecasts for the year to 30 September reduced to £4.5m (previously £7.1m) for earnings per share of 10.7p (previously 17p).  However, there remains considerable uncertainty about the level of any exceptional charge in relation to the Vivergo Fuels contract which the company has lost.  The case against Vivergo continues.  On the positive side, new contracts have been won with AWE, British Energy, Chevron and Conoco Phillips and these are worth in excess of £10m.  Cashflow at the grouo remains in line and the group expects to be cash generative in H2.  The nuclear and defence businesses have been merged to form Redhall Nuclear Limited and this has been well received by clients. 

It is probably too early to recommend the shares as a buy, but we would not be sellers at this stage.  HOLD.