Redcentric gets back on track

Fraser Fisher, CEO of Redcentric
Fraser Fisher, CEO of Redcentric
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​​IT firm Redcentric ​said the past year has been challenging, but it is trading in line with revised expectations after winning a number of high profile contracts.

The Harrogate-based company announced a historic overstatement of net assets and profit ​last November which ​led​ to a £2​1m hole in its finances and the departure of its former chief financial officer. ​

​The group said that its finance department has been "materially strengthened" since then, sales have been strong and it has a good pipeline looking forward.

​The firm has signed up a number of new customers including high profile names such as Pizza Express and NHS Digital​.

​The group said that customers and staff have been very supportive throughout this​ turbulent period​ and it is fully​ co-operat​ing​ with the ongoing FCA investigation.

​Chairman​ Chris Cole​ said:​ ​"During this challenging period for the ​c​ompany our clients and employees have remained loyal and focused, thus ensuring the day-to-day externally-facing business operations have continued satisfactorily.

​"​At the same time the financial structure and personnel have been reinforced and changed to provide resilient and accurate reporting. We now look forward to the business operating normally and trading well in markets that provide opportunities for growth".

​​Chief ​e​xecutive​​ ​Fraser Fisher added:​ "​We have taken the necessary actions to strengthen the business where it needed work. We have a loyal client base and a solid market offering exemplified by our new business and cross selling wins. The underlying business is strong, sustainable and well positioned for the future.

​"​While the business has had a turbulent period, we have weathered the storm and can now return to business as usual, focusing on sales growth and high quality customer services.​"

​The group said s​taff numbers have increased this year to 523, with around 140 being located ​at its​ ​​Hyderabad office​ in India​. ​It has invested in additional space in both ​its Harrogate and Hyderabad offices to support the business.

​"​A huge amount of work has been carried out to ensure the challenges of this year will not happen again​," said Mr Fisher​.

​"​Significant investment in our finance department has materially strengthened the personnel and systems in place. The addition of the new back office system toward the end of the financial year will cement into place a solid scalable back office platform. The board has been strengthened both by the addition of a new ​c​hief ​f​inancial ​o​fficer and two experienced ​n​on-​e​xecutive directors.​"​

​The group reported revenue of £105m in the year to March 31​, up from the restated £102m in 2016.

​It made a pre-tax loss​ of £4.2m, ​down ​from £6.1m the year before.

A​nalyst ​Oliver Knott​ at​​ N+1 Singer said: "​​Revenue and ​adjusted​ EBITDA of £104.6m and £17.3m respectively are in​ ​line with consensus forecasts, while net debt of £39.5m was in-line with the May trading update.

​"​The remedial plan to recover from previously announced accounting misstatements is well progressed, with new auditors in place from May 2017 and more robust internal controls implemented.

​"​Operationally the business appears to be performing well, with 88 new logo wins in the year totalling £19.4m of total contract value. We believe that the solid underlying performance is a strong indicator of Redcentric’s competitive positioning within the marketplace.​"