REG - Redhall Group PLC - Trading Statement

Thu Sep 13, 2012 9:30am EDT

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RNS Number : 2229M
Redhall Group PLC
13 September 2012
 



For immediate release                                                                                   13 September 2012

Redhall Group plc

("Redhall" or "the Group")

 

Trading Update

Redhall Group plc, the specialist engineering support services group, today provides the following update.

 

Our new Chief Executive, Richard Shuttleworth has conducted an operational review of the Group's businesses.  Following this review the Board has concluded that the level of provisioning on certain contracts should be increased.  In addition trading in the final quarter of the financial year ending 30th September 2012 is anticipated to be materially down on previous management expectations.  The Board therefore anticipates that this will lead to adjusted pre-tax profits in the current year being £1.7 million below current mid-market expectations of £3.6m.  The Board has also considered Richard's view on certain legacy contracts provided for last year and has concluded that a further exceptional provision of £1.6 million in this regard is required.  Our bankers, HSBC, remain supportive of the Group.

 

The court action brought by Vivergo is due to be heard in late October/early November and this case will help to clarify issues including the balance sheet position to be adopted at 30th September 2012.  The Board anticipates a judgement by the end of this calendar year but legal costs have increased beyond original expectations and a further exceptional provision of £2 million in this respect will be made this year.   As advised by its lawyers the Board remains satisfied that its balance sheet position regarding the Vivergo contract is recoverable. 

 

Despite these short term issues the prospects of the Group particularly for 2013/14 and beyond remain encouraging.  The Board has taken steps to strengthen its operational and commercial management and is confident that the Group can deliver more consistent results under its new Chief Executive. 

 

 

Contacts:

Redhall Group plc

Tel: +44 (0) 1924 385 386

David Jackson, Chairman


Richard Shuttleworth, Chief Executive


Chris Lewis-Jones, Interim Group Finance Director




Buchanan

Tel: +44 (0) 20 7466 5000

Tim Anderson, Fiona Henson, Sophie Cowles




Canaccord Genuity, Brokers

Tel: +44 (0) 20 7050 8000

Mark Dickenson / Peter Stewart




Altium, Financial Advisors

Tel: +44 (0) 845 505 4343

Phil Adams / Simon Lord / Paul Lines


 

 


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