Integrator Redstone's accounts back in the black
But CEO says slow project work means cost-cutting will continue
The boss at network integrator Redstone reckons the turnaround plan initiated a couple of years ago is finally paying dividends as accounts returned to the black.
The company had stumbled and looked likely to fall over in 2010 before biz rescue specialists Tony Weaver and Ian Smith pitched up in September that year. Smith and Weaver promptly began offloading a bunch of units deemed non-core as well as reducing staffing levels.
In a second half-year trading update, AIM-listed Redstone warned that project work remains unpredictable and said that it was seeking further costs savings, but the underlying results showed it has turned the corner.
CEO Weaver said the firm was in a "stable financial position, underpinned by a return to solid EBITDA performance".
He said Redstone had bagged £45m worth of contracts wins throughout the year and trading in the second half of the year included the implementation of the first stage of a multi-year project for a major bank.
Approximately 50 per cent of the non-recurring revenues expected in fiscal 2013 are already contracted, "materially better than a year ago".
However, the CEO cautioned that the market was not yet back to normal trading patterns. He said: "Project work continues to be difficult to predict with inevitably lengthening sales cycles in uncertain economic times.
"Consequently, we have constantly monitored levels of overheads and moved to re-align the cost base in response to the lower level of activity in the project market," he added.
As a result, Redstone's management is looking to eke out "further cost reductions" to save £900,000 a year – but Weaver did not specify the areas where cuts would be made. ®