Redhall reveals a record order book worth £152m

The Yorkshire engineering group announced “significant” new contract wins including a £26m four-year deal to provide mechanical and electrical services at Sellafield in Cumbria.

Redhall also reported a major framework contract for the Atomic Weapons Establishment at Aldermaston in Berkshire. And it won an agreement for mechanical services at Dounreay in Scotland plus £8.5m worth of orders from Hyundai Heavy Industries.

Richard Shuttleworth, chief executive, told the Yorkshire Post: “We always said that 2013 was going to be a year of restructuring the business and getting the platform for growth to capitalise on the opportunities that we could see coming down the path.”

The Wakefield-based business is rebuilding itself after a series of troublesome contracts, most notably the Vivergo biofuel plant in East Yorkshire.

It went to the High Court over the disputed contract last November and is still waiting for the judgement.

Redhall reported a £4.6m pre-tax loss in the year to the end of September 2012. This was an improvement on the £8.1m pre-tax losses the prior year, but hardly a bonanza for shareholders.

In the six months ended March 31, Redhall reported adjusted revenues of £56.2m, down from £59.9m the same period last year. The group reported adjusted pre-tax profit of £574,000, down from £1.3m.

David Jackson, chairman of the group, said recent orders and the record order book give the board confidence in the immediate prospects of the business.

“The new executive management team has finished its review of contracts and systems and, with enhanced control, the business should now start to improve.

“With our order book at a record level and our focus on margins, we look forward to the future with confidence,” he added.

Redhall confirmed the appointment of Christopher Lewis-Jones as group finance director. Formerly company secretary, he assumed the role on an interim basis following the departure of John O’Kane last year.

Mr Shuttleworth said the restructuring is likely to lead to the loss of around 50 white collar jobs at the group, which employs around 1,500 mainly blue collar workers.

He said the group “collapsed” the senior team of six directors in the nuclear business; operations managers now report directly into the main board.

Redhall has launched a consultation over its three operating centres for its food manufacturing business. These are in the Midlands, Manchester and Humber Bank and one is expected to be closed.

Meanwhile, the group is planning to increase marketing of its steel door business in the oil and gas sector and later this year will establish a presence in Houston, Texas to serve the Gulf of Mexico market.

Mr Shuttleworth said: “Houston is one of the main centres for oil and gas globally. All the global players are there. We need to access that market.”

He added that Redhall is well positioned to benefit from the new-build nuclear sector in the UK once Government sets returns for developers.

The group has joint ventures with two French suppliers to EDF, which is poised to build a plant at Hinkley Point in Somerset, the first in a generation.

More generally, Mr Shuttleworth said Redhall is very careful about the work it takes on. He said the group has turned down one or two contracts in the first half of the year because the pricing was unsustainable.