News blog
Redhall Group
- BY: Andrew Hore |
- POSTED: 16/06/2015 |
Hargreave Hale has trimmed its stake in engineer Redhall to below 5% following its interim results.
Hargreave Hale has cut its stake to 4.78%.Redhall’s poor interim figures to March 2015 came as no surprise. They bore the costs of the restructuring of the group with exceptional charges were £2.46m and a goodwill write-down of £5.16m. The structure of the business has been simplified.
Revenues from continuing businesses fell from £27.6m to £22.7m, while the reported loss jumped from £1.02m to £9.55m. The continuing businesses still made an operating profit of £567,000 – not enough to cover interest costs – but it was well down.
The main engineering services businesses have been sold to Cape since the period end and this will help to reduce debt by around £5m. Net debt was £16m at the end of March 2015. Most of the remaining debt relates to a term loan owned by major shareholder Henderson. Withdrawing from nuclear services should help to reduce working capital.
At 10.5p a share, Redhall is valued at just over £5.1m. The full year figures will be poor and it is next year’s figures that are important. Redhall needs to show that it can generate more profit from its core businesses.
Manufacturing has been hit by weaker demand from the oil and gas sector and delays in nuclear investment. Rail contracts are being won. The marine coatings business has a long way to go with its Royal Navy submarine contract.
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