Sluggish banking sector brings us down, moans Redstone

Integrator sales flat in fiscal 2012, but it's close to break even

Managed services outfit Redstone made little progress on the sales front in fiscal 2012 ended 31 March – albeit in a stagnating market – but it did come closer to breaking even, according to prelims.

Turnover at the firm edged up just £100,000 in the year to £67.2m and it made an EBITDA of £5.2m compared to £1.1m in the previous 12 months helped by a 14.3 per cent fall in op-ex to £31.6m

But after depreciation, amortisation of intangibles, and integration and strategic costs (redundancies charges) were factored into the equation, Redstone made an operating loss of £200,000, down from £5.3m.

Total losses for the group reduced by more than 85 per cent to £1.6m compared to £11m a year earlier.

Headcount in the year fell to 409 workers from 446 in the previous financial year.

Chief exec Tony Weaver said the business had more than held its own "against a very difficult market backdrop".

He said it was "all the more credible considering that the predominantly new sales team was in place for only part of a year in which we also implemented a new strategy."

Weaver came on board as CEO in September 2010 with business rescue partner Ian Smith signing up as chairman. They closed the BSF unit and sold the Marcom/ RCS units and the security reselling arm.

The firm pushed ahead with managed services and its core network operations.

Weaver said it was still "assimilating" the effects of the structural overhaul and added that keeping on top of costs "remains a priority".

Project revenues climbed 8.9 per cent in the year boosted by the early roll out of the first two phases of a £21.9m contract to upgrade a data centre at a major UK bank.

Annuity-based sales slipped 6.9 per cent, and the Campus-managed service business sunk 17.6 per cent due to a fall in discretionary spending across the banking sector.

Network connectivity and cloud services enjoyed a spike of 16.9 per cent with the Cambridge MAN a "key contributor", the company said.

Bank borrowing fell by £1.3m to £10.8m.

The company said: "The economic outlook remains fragile on a macro level, with continued uncertainty as to how significantly the Eurozone debt crisis will ultimately impact UK business". ®