Castleton shares tumble as first-half profits drop

31st Dec 2014 08:11

Castleton Technology's share price plunged on Wednesday after the software company reported a sharp drop in first-half profits as the business continues to transform following a demerger last year.The firm, formed from the separation of Redstone, is now focused on the public and not-for-profit sectors after splitting from its ICT infrastructure and data centre business in April 2013. The managed services operations were spun off into a new AIM-listed company called Redcentric.Profit over the six months to 30 September totalled just £0.03m, compared with £26.44m the previous year.The company said "the prior period [had] the benefit of the profit on demerger of the Redcentric business".During the first half, Castleton spent £3.83m on Montal Holdings, a specialist outsourced IT managed services business focused on the public sector.Group revenues totalled £1.9m in the first half, compared with nothing the year before. Montal was the only business during the period labelled as 'continuing' after the disposal of software subsidiary ABS.Since the period-end, Castleton acquired Documotive, software supplier to the social housing sector, for £4m."I welcome both [Montal and Castleton] and their employees to the group. I believe they are both excellent acquisitions and I'm sure we will all enjoy a prosperous and exciting future together," said chairman David Payne.Castletown was trading 15.2% lower at 1.95p by 08:43.