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Analyst Research Report Snapshot






Edison Investment Research


22 Dec 2008





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Redstone reported interim numbers that showed revenues ahead by 10% but adjusted PBT down over 40% to £2.8m due to a rapid deterioration in order levels, specifically large-scale ICT projects. Management has been quick to rationalise, taking £7m of annualised labour cost out of the business. The group consumed £7m of net cash during the first half taking net debt to £26.6m against a current market cap of £13m, but there are signs that the working capital build up is being unwound as net debt had fallen by £4m to £22.4m by 31 October. With repayments on the £20m term loan due in 2009, management is in negotiations to revise the terms of its loans to create financial headroom. Decisions on the Birmingham and Salford BSF contracts worth £170m over 11 years are due in January and we remain cautiously optimistic on the shares. FOR MORE INFORMATION ON ATTACHED RESEARCH PLEASE CALL 020 3077 5713 OR EMAIL RESEARCH@EDISONINVESTMENTRESEARCH.CO.UK OR VISIT WWW.EDISONINVESTMENTRESEARCH.CO.UK

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