Redhall knocked by contract delays and nuclear infrastructure setback

Manufacturing and services group Redhall has warned that its annual results will be materially below previous expectations due to contract delays and a reduction in the value of a major nuclear infrastructure project.

Redhall has been hit by contract delays

The Wakefield-based group said its full year result is dependent on it securing a number of key prospects and therefore remains uncertain.

Redhall’s shares fell 26 per cent to 1.05p following the announcement.

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In March, the group said its annual expectations were based on its subsidiaries Jordan Manufacturing and Booth Industries winning a number of expected new contracts, which would drive a strong trading performance in the second half of the year.

However, on Wednesday the group said it has been affected by delays in the award of a number of these projects and a reduction, due to design changes, in the value of Jordan Manufacturing’s contract for a major nuclear infrastructure programme.

Redhall insisted that its near-term pipeline is strong, in particular for Booth Industries where it said the business has a number of prospects across the infrastructure, defence and oil & gas sectors, and for Redhall Networks where there are increasing opportunities to support the roll-out of the 5G network infrastructure programme.

Redhall said that overall, market conditions remain robust in most of its core markets and its pipeline of opportunities remains strong. It anticipates that this pipeline will deliver steady growth into 2020.

Analyst John Cummins at WH Ireland said: “This morning’s update is clearly disappointing and investors will need to see evidence of sustained progress, the pipeline of opportunities being secured and a reversal of recent working capital outflows before a re-rating of the shares is seen.”

Redhall’s results for the half year to March 31 are expected to be announced in June.