Profits warning as Redhall axes FD

The Wakefield-based firm, which supplies services including blast-proof doors for the nuclear industry, said FD John O’Kane is leaving immediately. The firm declined to say if he receives a pay-off. He is replaced on an interim basis by company secretary and head of finance Christopher Lewis-Jones.

Redhall’s shares plunged 28 per cent to 59.5p. The firm has endured a rocky 18 months, hurt by a profits warning in April over production and a disputed contract for a biofuels plant in Hull.

Redhall said a review by new chief executive Richard Shuttleworth concluded “provisioning on certain contracts” should be increased. It is making another £1.6m provision for these nuclear contracts, which were also accounted for last year.

Trading in the three months to the end of September is also “materially down” on previous management expectations.

Redhall said it expects adjusted annual pre-tax profits to be £1.7m lower than current market expectations of £3.6m.

The company faces a courtroom battle with Vivergo in late October or early November over the disputed biofuels plant. It expects a judgement by the end of 2011 but has also made another £2m provision for ballooning legal costs.

“Despite these short-term issues the prospects of the group particularly for 2013/14 and beyond remain encouraging,” said Redhall, chaired by David Jackson.

The firm added it is “confident that the group can deliver more consistent results under its new chief executive”.

Redhall insisted its bankers HSBC “remain supportive”. Its £25m facilities run until 2015.

Commercial manager Philip Brierley has also been promoted to commercial director.

No reason was given for Mr O’Kane’s departure but Mr Shuttleworth said the new appointments’ “breadth of experience will improve our management of risk and deliver enhanced returns”.