Redhall Group PLC Full Year Trading Update (6515S)
04 October 2017 - 5:00PM
UK Regulatory
TIDMRHL
RNS Number : 6515S
Redhall Group PLC
04 October 2017
For immediate release 4 October 2017
Redhall Group plc
("Redhall" or the "Group")
Full Year Trading Update
Redhall Group plc (AIM: RHL), the manufacturing and specialist
services group, announces a full year trading update ahead of its
preliminary results for the year ended 30 September 2017.
The Group continues to pursue its growth strategy of focusing on
high integrity manufacturing and services projects, which it
delivers into complex, secure and hazardous environments. This
strategy is resulting in a growing proportion of the Group's order
book being specialist manufactured product, principally for the
nuclear sector. The Group is now successfully bidding and executing
contracts in all three of its nuclear markets: defence,
decommissioning and new build.
The Directors' full year expectations for the Group were based
around a strong second half year, driven principally by an increase
in manufacturing work in Booth Industries following a period of
significant engineering input and the commencement of projects for
Hinkley Point C in Jordan Manufacturing.
Whilst projects for high integrity engineered products can be
won on attractive margins, they can also be subject to external
client delays. The Directors build timing contingencies into their
project planning to allow for this but even so the Group has
experienced unforeseen delays on certain nuclear and infrastructure
projects which has led to work being deferred into the year ending
30 September 2018. The most significant of these relates to Jordan
Manufacturing's work on Hinkley Point C, which was due to commence
in the final quarter of the year ended 30 September 2017. As a
result of the client changing its Preferred Bidder (our client) for
its marine works, and the knock on effect this had on Jordan's
contract, the Directors now anticipate that the contract will
commence during October 2017 and will complete within the year
ending 30 September 2018.
The late timing of the delays, to this and other projects, are
disappointing and will mean that the Group's results for the year
ended 30 September 2017 will be materially below expectations.
The Directors do not expect these delays to continue and remain
confident of a strong performance from Jordan Manufacturing in
2018. The Directors are also pleased that Booth Industries has
continued to make good progress implementing engineering and
manufacturing improvements. Redhall Jex has benefited from the
previously announced large contract award from one of its major
clients which, with increased scope, has run into the current year.
Redhall Networks continues to perform well, meeting expectations in
a buoyant market.
The Group's RBC Fabrications business, which operated in the
offshore oil and gas market, was mothballed in 2015 and only a
small element trading as Chieftain Fabrications remained. Its
market remains difficult and products supplied by Chieftain can be
manufactured more efficiently elsewhere in the Group. As a result,
the decision has been taken to close this part of the business.
Outlook
The Directors continue to be encouraged by the high level of
pipeline opportunities in the Group's chosen markets within high
integrity manufacturing and are confident the Group will continue
to deliver against its strategic objectives in those markets.
Consequently, after taking account of the closure of the remaining
business within RBC, the Directors expect that Group profitability
for the year ending 30 September 2018 will remain in line with
market expectations.
The Group's results for the year ended 30 September 2017 are
expected to be announced in early December 2017.
Contact details:
Redhall Group plc Tel: +44 (0) 1924
385 386
Phil Brierley, Chief Executive
Chris Kelly, Group Finance Director
Buchanan Tel: +44 (0) 20 7466
5000
Mark Court, Sophie Cowles
Altium, NOMAD and Financial Advisors
Tim Richardson, Simon Lord Tel: +44 (0) 845 505
4343
WH Ireland, Broker
Adrian Hadden, Ed Allsopp Tel: +44 (0) 20 7220
1666
This information is provided by RNS
The company news service from the London Stock Exchange
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