Blackfriar: Jackson's Redhall boast comes a step nearer reality

At the time he was still smarting from losing out in the battle for Peterhouse.

Jackson was at the heart of one of Yorkshire's most bitter takeover battles in 2005 when Babcock narrowly won control of his Elland-based support services company Peterhouse.

At the time he promised to turn Wakefield-based Redhall into a far bigger company than Peterhouse ever was.

Peterhouse had a market capitalisation of 150m.

Yesterday Redhall added 1.8m to its market cap to hit 51m following the announcement of a landmark 18m contract to build a new green fuel site near Hull for oil giant BP.

Redhall will design and build a new bio-ethanol plant at the BP Chemicals Saltend site within the next nine months – an ambitious target.

Redhall has been constrained recently by a delay in signing contracts. However, with the news that British manufacturing is back on track, analysts are expecting Redhall to announce some sizeable contracts over the coming months.

You have to hand it to Redhall – they do seem to have a finger in every pie. How many other companies can flit between the nuclear sector and green renewable energy?

Yesterday Redhall chief executive Simon Foster said the Saltend project is an exciting development for the group as it establishes its green credentials.

"This is strategically very important," he said. "We are a key player in future energy markets and we see a number of opportunities for growth in the UK."

At the same time it has the nuclear new build programme.

At the end of last year it won three new nuclear and defence contracts worth 10m in total, bucking the contract delays that have beset the nuclear sector.

Since 2006 Redhall's revenues have grown fourfold from 31.6m to 129m while underlying pre-tax profits have risen over eight times to 6.5m.

Jackson looks like he could be proved right – Redhall is on track to dwarf his former company.

n TELECOMS group KCom has come a long way from its cream telephone box days.

Under executive chairman Bill Halbert, the Hull-based group is midway through a period of "transformation and execution", shedding unprofitable contracts to focus on higher margin business.

To get there will require KCom to go through some pain and the group has already taken the medicine of job cuts.

Yesterday KCom announced it is outsourcing maintenance of big contracts to Phoenix IT, plus selling a business for 1.8m.

None of this is a big surprise. When Mr Halbert commissioned the review more than a year ago, he warned it might be "brutal".

That the turnaround was needed is not in doubt. In 2008 in the days prior to Mr Halbert's appointment, KCom's shares had plummeted to about 10p as earnings slumped and the City lost faith in the group

Set that against 10 years ago, when Kingston Communications, as it was then known, was a member of the FTSE 100 and its shares were changing hands for more than 15 apiece, and it was clear a change was needed.

Analysts said under the Phoenix deal, the group is selling about 10m of revenues for 1.8m and outsourcing a further 13m.

By contrast, no value was placed on KCom's recent deal to consolidate Phones4U's telecoms – the sort of deal it is trying to win more of.

Analyst Andrew Darley at Finncap is concerned. "We remain troubled by the ability to grow profitable revenue streams at a sufficient pace to counter the exit from lower margin revenue streams," he said.

"We've covered KCom since June 2002 and it has never shown meaningful revenue growth from its managed service arm whether known as Torch, Inbusiness or Affiniti, and we don't see why the newest 'KCom' brand will change that."

Blackfriar believes the danger with KCom's strategy is that it throws away its economy ticket before the business class repla-cement has arrived in the post.