News blog

Red24

• BY: Andrew Hore |
• POSTED: 01/08/2013 |

Risk management services provider Red24 is selling its training division in order to concentrate on its core business.

Red24 is swapping the business for a 25% stake in its acquirer Linx International. The combined business will become a significant player in the security training sector and its figures will be included as an associate. Linx founder David Gill will join the Red24 board.

In the year to March 2013, Red24’s revenues rose 12% to £6.5m and pre-tax profit 9% ahead at £940,000. During that period, the ARC Training business generated a pre-tax profit of £145,000 on revenues of £1.15m.

At 14.63p a share, Red24 is valued at £7.17m. the deal should be earnings neutral. House broker finnCap forecasts a 2013-14 profit of £900,000 and a slightly higher tax rate of 22%. The shares are trading on nine times prospective 2013-14 earnings.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFJuly2013_46.pdf