ENGINEERING SERVICES group Redhall said it expects to see profits pick up in the second half as its turnaround programme starts to show results.
The Wakefield-based firm, which serves the nuclear and defence industries, reported a healthy pick-up in its order book, which has risen from £21m to £24m.
The group reported a pre-tax loss of £350,000 for the six months to March 31, down from a £1.4m loss the previous year.
Redhall’s chief executive Phil Brierley said the group is now fully focused on manufacturing and specialist services as the group turnaround progresses.
“The turnaround is going very much according to plan,” said Mr Brierley.
“The order book is a key part of it and we wanted to improve manufacturing – high integrity work and that’s exactly the sort of work we’ve been winning.”
Recent wins include a £7m defence contract and £4m of decommissioning awards. Crossrail awards now exceed £6m.
“There’s a limited amount we can say about the defence contract,” said Mr Brierley.
“It’s UK-based and we will provide doors for a defence facility. These are high integrity doors in challenging environments.
“We are also supplying heavily engineered doors to Crossrail.”
Redhall expects to return to profit in the second half and analyst John Cummins at WH Ireland expects the group to break even for the full year.
Mr Cummins said: “Redhall has released a solid set of interim results, illustrating continued progress in delivering the turnaround strategy.
“Whilst manufacturing revenue and profitability moved lower in the period driven by the reduction in oil and gas capital expenditure, the divisional order book has risen in excess of 50 per cent and the pipeline is strong.
“All businesses within specialist services performed ahead of expectations.
“The group’s total order book is reported to have increased £3m since December to £24m, with wins coming through in defence, nuclear decommissioning and Crossrail and management anticipates the order book increasing further by year end.”
The group reported revenue on continuing operations of £21.4m, down from £22.7m as a result of initial design delays on some of its major projects and the downturn in the oil and gas sector. The group has reduced its reliance on oil and gas although it has the capacity to beef up operations if conditions improve.
No interim dividend will be paid in 2016.