Watchdog launches investigation into Redcentric’s accounts

The Financial Conduct  Authority has launched an investigation into historic overstatements in Redcentric’s accounts.

The managed IT services provider first notified the markets of its accounting errors on 7 November, following which its chief financial officer left the company.

This was followed by admissions in December that it had overstated assets and pre-tax profits by around £20.8m. It brought in Deloitte and Nabarro for a forensic investigation.

Costs relating to misstatements have reached £1m already, said the firm.

In a statement this morning, the listed company said: “Redcentric will co-operate fully with the FCA and other relevant authorities concerning this matter. A further announcement will be made in due course if appropriate.”

Despite this, the Harrogate-based company has reason to be optimistic, with half year results showing £320,000 made in pre-tax profits, compared to a restated loss of £2.5m in the same period in 2015.

Revenue was on the up, reaching £53m, up 2%.