New boss joins Redstone as firm loses £50m

Redstone in the red: the intergrator posted an operating loss of £49.7m

Redstone's incoming executive chairman Stephen Yapp faces a tough task returning the firm to profitability as results published today reveal the integrator suffered a near £50m operating loss last year.

In the 12 months to the end of March Redstone's revenue slipped by 1.4 per cent on last year to £197.8m. Operating losses stood at a massive £49.7m, compared with a £3.2m operating profit last year. Year end debt rose by £3.8m to £24.3m.

Despite the results, the company claims a series of recent moves have put it in good shape to rebound. Earlier this month the company announced refinancing plans, including up to £6m of additional debt funding and a restructured loan agreement with speech recognition firm Eckoh. Redstone acquired mobility specialist Symphony Telecom from Eckoh in 2006.

A £10m term loan and £8m revolving credit facility, both repayable in two year's time, have also recently been agreed with Barclays Bank.

In February, Redstone announced it had won a deal to provide the IT element of a major Building Schools for the Future contract in Birmingham. Redstone claims the deal, which is set to provide £150m in revenue over the next 15 years, is the largest in its history.

Redstone offloaded its telecoms arm to Daisy for £17m in August and, weeks later, revealed it had received further acquisitive interest from an unnamed firm.

Outgoing executive chairman Alan Coppin claimed all these factors would help the integrator regain firmer financial footing this year. In his chairman's statement, he claimed Redstone would continue to be subject to "market turbulence" for the rest of the year.

"Our industry is continuing to cope with difficult market conditions and, as one of the major players in the industry, Redstone was, and continues to be, affected by the challenges created by these conditions," he wrote.

"Such conditions demand radical and rapid measures to be taken to ensure the future security and success of the business. The board has been quick to react and far reaching changes have been made at all levels of the business."

He added: "These have clearly been difficult times, but I believe the group is now much better attuned to the reality of the economic environment it faces. Morale is improving and I am pleased to report that, throughout the organisations our people are seizing the challenges facing them.

"We continue to win significant IT engagements and currently have a strong pipeline of prospects. Inevitably, there will be some delay to project implementation as there will be to payment cycles."

Coppin departs the business today after five months in the hotseat. He is replaced by Stephen Yapp, formerly chairman of in-flight products and catering firm the Journey Group. The 52 year-old has also held senior roles at water and drainage services firm DCS Group and insurance firm Hadleigh.