Networking integrator Redstone staggers back to its feet
Down but not out after new bosses fire staff, flog assets...
Massive cost-cutting and restructuring activities have helped to reduce losses at networking integrator Redstone.
The firm had featured highly on distributors' "at threat" list but during fiscal 2010 serial entrepreneurs Ian Smith and Tony Weaver took to the helm and rang in the changes, firing staff and flogging the Irish and security reselling businesses, as well as assets of the Marcom unit.
Their work is paying dividends with operating losses for the first fiscal half of 2012 ended 30 September down from £937,000 a year ago to £458,000, while adjusted EBITDA increased to £1.9m from £100,000.
Sales for the period grew 14 per cent to £36.5m and project-based revenues were up 29.5 per cent to £18m.
Despite the challenging trading conditions that prevailed during the half year, chief exec Weaver said: "The restructuring undertaken in the previous financial years has enabled the businesses to continue to trade profitably [in terms of EBITDA]".
Operating expenses excluding integration and strategy costs plummeted 16.4 per cent to £15.6m, the results showed.
During the six months of trading, Redstone won three big contracts – including a £10m four-year managed services extension, a £21.9m deal with a UK bank to design and deliver a data centre and a £10.2m gig to deploy Managed Wide Area Networks to 1,900 UK sites.
Smith stepped down as chairman in September and planned to remain as exec director, but the firm said it would be more cost-effective for Smith to operate as a non-exec director.
Chairman Richard Ramsay gave his first state of the nation address to shareholders: "The economic outlook remains gloomy on a macro level, with enormous uncertainty as to how significantly the global debt crisis will ultimately impact UK business.
"However, despite the difficult market conditions, we continue to re-build business revenue. Our sales team is at full complement for the first time in almost two years and are enthusiastically pursuing and winning exciting opportunities to consolidate and grow the business," he said. ®