Redhall celebrates contract wins as order book doubles

Engineering support services group Redhall said that its order book has more than doubled, losses have significantly narrowed and it is confident about the future following a transitional year for the business.

Redhall said its confidence has been endorsed by the award of a number of major contracts

The Wakefield-based firm said its confidence has been endorsed by the award of a number of major contracts in the defence, nuclear decommissioning and infrastructure sectors. In September it said that the Government had approved investment in the nuclear new build project at Hinkley Point C. On Wednesday it said this is expected to be the first of a number of major projects.Chief '‹e'‹xecutive'‹ '‹Phil Brierley'‹ said: “'‹'‹We’ve done a lot of work on product development, working with the client so we can give them products that weren’t available before. For example we’ve developed doors that are fire-rated, acoustic-rated and pressure-rated,”These doors are used in nuclear environments and also in tunnels and vent shafts for Crossrail, where large doors are needed to get pieces of equipment through.The group has also made major investment in recruitment and it has invested in training.In the year to September 30, the group’s manufacturing order book rose 109 per cent to £23m, up from £11m in 2015.“We could see '‹a good pipeline '‹at the beginning of 2016'‹,” said Mr Brierley.'‹“The issue was converting it into orders which we’ve managed to do. We can see at least the same opportunity in the coming year. '‹We see the opportunities continuing, particularly in the nuclear market.”'‹R'‹edhall does not factor in nuclear new builds as it would distort the numbers.“Nuclear new build will definitely '‹have a big impact on our market place. It could be for Hinkley - we are tendering work,” said Mr Brierley.The group made a half year adjusted operating profit of £'‹900,000 which was '‹slightly ahead of market expectations'‹, reversing a loss of £700,000'‹. '‹'‹Adjusted operating profit'‹, '‹'‹before exceptional and central costs'‹, '‹were significantly ahead at '‹Â£3.3m'‹, up from £1.2m during the same period last year.'‹The company made a group loss, after exceptional items and losses of discontinued businesses'‹,'‹ of £1.7m'‹, a big reduction on the £12.2m loss last year.'‹Revenue slipped slightly from £44.7m to £43.8m.The group invested £800,000 in manufacturing capability and new product development and a further £400,000 has been approved since the year end.'‹“At an operating level the business made a profit. This year there will be another step up,” said Mr Brierley.The group said it had seen little impact from the Brexit vote.'‹'‹“It doesn’t seem to have affected us greatly,” said Mr Brierley.“Overall we’ve managed to be competitive. The triggering of Article 50 is a bit of an unknown all round, but the AWE '‹(Atomic Weapons Establishment)'‹ work and Crossrail will continue to a conclusion. I don’t think the Brexit impact on us will be great.”'‹The group’s chairman Martyn Everett'‹ said'‹:'‹ '‹“'‹We are on track to create a high integrity '‹m'‹anufacturing business engaged in the defence, nuclear decommissioning, infrastructure and nuclear new build sectors and will focus this year on delivering further improvements in profitability and operational performance and building a robust platform for a sustainable period of growth'‹.'‹”A'‹nalyst'‹ John Cummins at WH Ireland said: '‹“'‹The higher margin'‹ m'‹anufacturing division order book has increased by 109'‹ per cent to'‹ '‹Â£23m, now accounting for 80'‹ per cent'‹ of the '‹group’s total forward orders. Furthermore, the'‹ '‹tender pipeline has continued to expand, with significant opportunities being seen'‹ '‹across defence, nuclear decommissioning, major infrastructure and nuclear new'‹ '‹build. '‹“'‹It'‹ '‹should be noted that our forecasts do not include any nuclear new build contracts,'‹ '‹which could commence mid-2017. We maintain our '‹‘b'‹uy'‹‘ stance and raise our price target to 12.5p to reflect progress being made and the positive outlook for Redhall.'‹”

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