Redstone 'delighted' after year of takeovers
Conversant with convergence
Redstone, the long-time loss-making fixed-line telecoms firm,has morphed into a new age IT and telephony hybrid with a positive bank balance after a year of financial restructuring and acquisitions.
The turnaround followed the arrival in 2005 of a new management team led by CEO Martin Balaam and CFO Tim Perks. The last year has seen the execution of their rescue plan for the ailing group.
In the 12 months to 31 March 2007 they shunted its listing from the full London Stock Exchange to AIM, spent £49.8m acquiring four other firms, beefing out its anachronistically positioned telecoms business, erased £192m of losses accumulated since its float in 1999 by some balance-sheet off-setting, turned a profit, and even left shareholders with the hope that they might one day get a dividend.
Revenues are up 56 per cent on last year, to £113.0m. A loss of £22.5m last year has become a £100, 000 profit.
Along with more Voip business Redstone's acquisitions also filled out its IT infrastructure services business. Redstone's old telecoms business, which had been its mainstay, now accounts for only a third of its revenues. Almost 40 per cent of its sales are now in IP telephony and related services, a business that helped it win some large mid-market contracts with Lancashire Building Schools for the Future and the Bristol and Leicester shopping centre.
Balaam said in a statement to the City that he was "delighted". Redstone issued shares last year, raising enough money to spend £20m acquiring Symphony Telecom Holding plc and the Tolerant group, both of which it integrated as parts of Redstone Telecom, Redstone Mobile, and Redstone Managed Solutions.
It spent £18m on IP telephony outfit Communica and raised another £31.5m on an overdraft with Barclays, £11.5m it spent on IDN Telecom plc, beefing up its old Redstone Telecom unit and the mobile division, most of which is a distribution business "servicing" 450 phone dealers.®