Redstone shrinks debt and grows pipeline

VAR releases a positive trading update for its financial year end as it continues to regain its mojo

Networking reseller Redstone is celebrating a "positive" update on trading for its financial year ended 31 March 2012.

The firm, which recently claimed its turnaround was almost complete, admitted it was close to throwing in the towel last summer before it secured new funding and embarked on a strategy to dispose of non-core units. Last February it united all its businesses under a single trading entity.

In its latest statement, Redstone revealed its EBITDA will be in line with expectations and that it has also implemented a further £0.9m of cost savings and driven down its debt even further.

Furthermore, the firm has revealed a strong contract pipeline for the coming year, including an infrastructure deal with a global investment bank and a cabling deal with another investment bank worth just over £950,000. This comes on top of the £43m contract wins the firm has announced over the past year.

Tony Weaver, chief executive of Redstone, said in a statement: "I am pleased that the company has performed in line with market expectations. Redstone has been successfully repositioned as a leading specialist ICT provider with an attractive market offering and a stable financial position, underpinned by a return to a solid EBITDA performance.

“The underlying strength and quality of the Redstone brand and business are now beginning to deliver the results Ian Smith and I believed possible when we invested and joined Redstone in September 2010. This strength is evidenced by contract wins announced throughout the year that have totalled in excess of £45m.”

He added: “We continue to evolve and improve the company's offering to meet the needs of our clients and the markets we serve. Our stable annuity revenue base, allied to strengthened technical and sales capabilities, allow us to look to the future with confidence. While we expect the major project markets to remain challenging, the company is now positioned to deliver on our long-term strategic aim of achieving an adjusted EBITDA margin of 10 per cent."

Weaver paid tribute to the company's staff for their hard work, stressing how market conditions "were and have remained difficult", adding credence to the results achieved.