After posting a 20 per cent annual revenue slump, embattled integrator Redstone has cashed in a £150m Building Schools for the Future (BSF) contract for just £4.2m.
For the year to the end of March, Redstone's revenue from continuing operations stood at £97.6m – down from £123.1m in FY09. Pre-tax losses were almost halved, but the firm was still £16.2m in the red at the end of FY10.
"Following the successful refinancing of Redstone, the associated transformation of the group's balance sheet and business restructuring completed to date, the group is well placed to build and consolidate the excellent client base maintained and extended throughout a problematical 12 months," he wrote in his chairman's statement.
"In addition, the weakness of the economy and its impact on the ICT sector provides attractive opportunities to further consolidate our areas of increased focus through corporate activity."
Redstone also confirmed yesterday that its i4e division – set up at the start of the year to manage the VAR's BSF contract in Birmingham – has now been disbanded. Working as part of a consortium, the integrator won the 15-year deal in February last year.
It would have been worth £150m to Redstone over the contract's lifespan, alth ough the scope of the project would undoubtedly have been drastically reduced in light of the BSF programme's cancellation.
Redstone has now transferred its interest in the project – including 27 employees – to consortium member Bovis Lend Lease. The VAR will receive £4.2m in cash and debt.
Tony Weaver, who arrived alongside Smith as chief executive of Redstone, said: "We are pleased to have completed the first part of our strategy of refocusing Redstone's operating activities within the sphere of its core competencies.
"Since our appointments, both Ian and I have been impressed with the operational and technical capabilities within the Group and look forward to updating further on our operational review and the implementation of our revised strategy."
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