Redstone is firmly on the path to recovery after slashing its losses by 84 per cent for its half-year financials ended 30 September 2010.
The ICT and comms reseller has seen a busy first half of its FY 2011, appointing Ian Smith and Tony Weaver to its Board in September as chairman and chief executive respectively, who have overseen significant restructuring of the company since their arrival.
In an interim statement, the firm revealed that in the last six months it has disposed of several assets, including: a Building Schools for the Future ICT contract to Bovis Lend Lease for £4.2m; certain assets of Marcom and telephone maintenance contracts of Redstone Converged Solutions for £1.75m; Redstone Technology for £2.25m and the security business of Redstone Managed Solutions for £1m.
It has also acquired Fujin Systems for £2.9m, and secured a £8.5m cash injection.
In total, operating losses were cut by 84.3 per cent to £500,000, compared with £3.2m in the same period the previous year. Loss before taxation dropped 71.8 per cent to £1.5m, compared with £5.4m in FY2010.
Gross profit increased by 10.6 per cent to £17.5m, compared with £15.8m in H1 2010, and gross margins hit 53.9 per cent compared with 42.8 per cent last year.
In his chairman’s statement, Smith said: “Following the successful refinancing of the business and the realisation of up to $7.25m of cash from our divestment programme, the Group is well placed to build and consolidate the residual business, and take advantage of any appropriate opportunities in the ICT sector which may arise from the economic fallout.”
Looking forward, Smith said macro-economic recovery continues to be "fragile" with looming government spending cuts and VAT/income tax increases further eroding consumer confidence.
“We are confident that Redstone will continue to provide ICT solutions for increasing client efficiency and as a result will continue to see opportunities to maintain and grow the refocused business,” Smith said, adding that the board is "optimistic" for the future prospects of the group.
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