Redhall wins £3.2m Sellafield contract

Wakefield-based Redhall is hopeful that the contract will be extended.

The deal is the first major award from Sellafield since new management under Helen Simms took control of Redhall’s nuclear business at the beginning of last year.

Ms Simms, who is managing director of Redhall Nuclear, said Redhall will strip out 1,000 metres of redundant pipework at Sellafield and replace it with 800 metres of new pipework.

It will also carry out work on associated insulation and electrical cabling. Work is due to start next month and will last for up to a year.

Ms Simms said Redhall has the capability to deal with a high hazard environment and all of its employees have been security cleared to work at Sellafield.

The potential danger of terrorist attacks or people being susceptible to bribery or threats means that every worker has to be security vetted by the Government.

Redhall will have around 120 workers on site at Sellafield during the length of the contract.

Ms Simms said there is the potential to extend Redhall’s work at Sellafield.

“It’s more than likely that the contract will be extended, but I can’t say by how much,” she said.

“Around 90 per cent of contracts are extended.”

Redhall said its work at both Aldermaston and Burghfield for AWE continues to perform well.

It is also working on the Astute class submarine programme at Barrow for BAE Systems.

Redhall’s chairman David Jackson said there are signs that the quality of the group’s work may lead to further opportunities with BAE.

Ms Simms added: “BAE is looking to demonstrate cost savings back to the Government. Our cost savings have been really well received and BAE has asked us to look at other areas in Barrow.”

She was speaking yesterday as Redhall announced a 33 per cent increase in underlying pre-tax profits to £1.3m for the six months to March 31.

Revenues fell from £64.3m to £60.0m although last year’s figures included £11.9m of Vivergo turnover. On a like-for-like basis, Redhall said turnover was up 14 per cent.

Mr Jackson said the Vivergo contract dispute remains unresolved. Redhall made a provision of £8.4m last year after the premature termination of its contract with Vivergo for pipework at a new biofuels plant at Saltend near Hull in March 2011.

Mr Jackson said that his preferred route is for a negotiated settlement, but he is resigned to resolving the issue through the courts if necessary and this process may take a number of months.

A court date has been set for October.

Mr Jackson said the result for the first half is an improvement on last year, but he believes the group is capable of a much better performance.

He added that the team will be enhanced by last week’s appointment of Richard Shuttleworth as chief executive.

Analyst David Buxton at FinnCap said: “Interim profits were below our expectations, although significantly higher than last year.

“On the back of a more difficult macro environment, plus additional legal and pre-nuclear bid costs, we reduce forecasts.

“Vivergo continues to be pursued with settlement expected later this year.”

He added that the recent appointment of a new chief executive should give “extra comfort and impetus” to the business.

“Nuclear new build prospects should be substantial in a group context and we look for positive news flow in 2013,” he added.

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