Redhall Group restructures as revenues fall
ENGINEERING support services group Redhall has seen its revenues drop to £103.2m in 2014 from £113.1m last time as a direct result of “contract delays and increased selectivity in choice of work”.
In its preliminary results for the year to September 30, the Wakefield-based business said that its operating profit before exceptional items has also fallen to £140,000 from £2.64m last time which is in line with management expectations.
The company said that it has “taken action” over the last year to both streamline the business and reduce headcount.
In a separate strategy update, Redhall Group also said that it intends to focus on “higher margin manufacturing activities” with particular emphasis on the nuclear and oil and gas markets.
The group intends to consolidate its “considerable expertise” in these markets which encompasses the design, manufacture, installation and commissioning of fire and blast resistant doors, window and wall systems.
It has also performed a review of its daily operations and now intends to implement a number of management changes designed to “streamline internal communication, reduce cost and give a more efficient service to customers”.
The impact of these changes will be to save around £1.2m annually.
The group also announced that chairman David Jackson had resigned from the company with immediate effect and he’s been succeeded by Martyn Everett, who was appointed to the board as a non-executive director in September.
Mr Everett said: “The group’s results reflect that Redhall experienced very significant delays in major customer orders, particularly in the second half, which resulted in a marked reduction in volumes and profitability.
“Our nuclear business was particularly affected with substantial losses incurred arising from over capacity as we sought to gain assurances on committed volumes from our key customers.
“During the second half we substantially reduced headcount to right size the business.
“The management team has also announced that it will remove the divisional structure and centralise support services in order to streamline communication and generate substantial savings.
“The next financial year is key to the turnaround of Redhall’s fortunes.
“Our entire team is focussed on risk reduction, margin improvement and profitable delivery of key contracts and over time we will deleverage the business.
“Our recent restructuring provides an appropriate platform to return to profit in the short term and to deliver growth through the nuclear and oil and gas sectors.”
Redhall Group also announced that it has agreed extended bank facilities with HSBC until the end of November 2016 and this the chairman believes will provide “adequate headroom to develop the business over the next two years”.
