Redhall suspends trading on AIM

Manufacturing and services group Redhall has suspended its shares from trading on AIM after failing to persuade creditors to provide additional funding.

Redhall has been hit by delays in the award of a number of projects

The Wakefield-based group said it is now investigating all alternative options to optimise value for stakeholders. Redhall said the outcome of this process and its impact on the company's stakeholders remains uncertain.

In a trading update, Redhall said: "Further to the trading update released on 1 May 2019, Redhall announces that overall trading remains challenging and that the company's short-term cash flows are under pressure, in particular, with regard to certain tax liabilities.

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"The board of Redhall has been in active discussions with certain of the company's major shareholders and creditors to provide additional funding capacity to allow the company to alleviate the short-term cash flow pressure.

"However, it is now clear that there is no reasonable prospect that a viable solution for additional funding capacity can be found and the board is now investigating all alternative options to optimise value for the company's stakeholders. The board notes that the outcome of this process and its impact on the company's stakeholders remains uncertain."

The board has requested that the company's ordinary shares be suspended from trading on AIM pending clarification of the company's financial position.

It said a further update will be made as and when appropriate.

On May 1, Redhall warned that its annual results would be materially below previous expectations due to contract delays and a reduction in the value of a major nuclear infrastructure project.

At the time, the group said its full year result was dependent on it securing a number of key prospects and therefore remained uncertain.

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 May 1 the group said it had 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 was 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.