Coms upbeat despite warning of 'substantial loss'

VAR heaps praise on remaining Redstone business as it prepares market for ugly first-half losses

Having jettisoned its albatross telecoms arm in May, troubled VAR Coms struck an optimistic tone in its latest financial update, saying its remaining infrastructure business, Redstone, has enjoyed a buoyant start to the year.

Coms warned in an AGM statement this morning that it will report another "substantial loss" in its fiscal first half ending 31 July as its former telecoms arm blotted the balance sheet with red ink for four months, up until its sale to Timico on 23 May.

However, the AIM-listed firm was able to muster some optimism as it reported that one of its two remaining core businesses, Redstone, which specialises in infrastructure, smart buildings and managed services, enjoyed a "good start to the year".

Redstone snared £13m of new contracts in the first half, which Coms claimed demonstrates the unit's "broad product offering and diversified client base". This includes contracts with international financial services and accountancy firms, as well as a national gallery and search engine company, it said.

"Two new smart buildings contracts were signed and other contracts spanned ICT services, designing and delivering a datacentre, supplying datacentre services and delivering infrastructure," it added.

Coms endured an annus horribilis in its last financial year ending 31 January 2015 as its buy-and-build strategy came apart at the seams. A whopping £10m impairment charge relating to its telecoms business pushed it to an annual loss of £15.1m on revenues of £46m. In March, it parted ways with CEO David Brieth.

But with a new CEO and CFO combo having been unveiled, Coms struck an upbeat note in its latest communication to the market.

"Following the disposal of the telecommunications businesses, the board has started to make some progress in extricating itself from liabilities associated with those businesses," it said.

"With the new management team in place, and some, although not all, of the legacy issues having been resolved, the board expects the group to enter a more successful period of trading."

Coms also revealed today that CEO-elect Mark Braund will start on 1 January 2016.