Redhall unveils new chairman and strategy after posting £5.8m loss

4th Dec 2014 09:56

Engineering support services group Redhall said chairman David Jackson will step down with immediate effect, as the firm announced a new strategic overhaul following annual losses of £5.8m.Jackson has been succeeded by Martyn Everett, who was appointed to the board as a non-executive director in September. Everett has experience both as an executive and non-executive director across a number of sectors including engineering, retail and media. According to Redhall, he has particularly strong expertise in turnaround and restructuring situations.The firm said that following a strategic review by the new management team, Redhall will now focus on higher margin manufacturing activities, with particular emphasis on the nuclear,oil and gas markets. The group will also reduce the volume of low-margin contracting operations, initiating a £1.2m cost cutting programme.A number of management changes have also been introduced to streamline internal communication.The overall implement cost of the plan is expected to be in the region of £1.5m. The group said it has secured bank support to finance the restructuring programme, with facilities extended to November 2016 as debt levels are expected to reduce with improvements in working capital.Over the last 12 months, Redhall's share price has declined more than 70% following turbulent trading conditions and the group's results for the year to 30 September marked no discernible turnaround.Redhall posted a loss before tax of £5.8m during the period, compared to a £9.9m loss for the prior year.The Wakefield-based firm said the loss reflected significant delays in major customer orders resulting in a marked reduction in volumes and profitability. In particular, Redhall's nuclear business showed substantial losses arising from over capacity as the group sought to gain assurances on committed volumes from key customers.Redhall chairman Martyn Everett said: "We have had a number of difficult years including the disappointing year just completed. This has resulted in a substantial reduction in the company's share price."The next financial year is key to the turnaround of Redhall's fortunes. Our entire team is focussed on risk reduction, margin improvement and profitable delivery of key contracts and over time we will deleverage the business."Our recent restructuring provides an appropriate platform to return to profit in the short term and to deliver growth through the nuclear and oil & gas sectors."Following poor performance results, Redhall's board announced that no dividend will be paid to shareholders.As of 10:09 on Thursday, the group's share price slumped 13.33% to 13p per share.