RedstoneConnect Plc Trading Update
Trading for the six months ended 31 July 2016 continued to be strong, with the business performing in line with expectations.
RedstoneConnect Plc Trading update
RedstoneConnect (AIM: REDS), a leading provider of technology and services for smart buildings and commercial spaces, is pleased to announce that trading for the six months ended 31 July 2016 continued to be strong, with the business performing in line with expectations.
The Company has seen continued progress against the Board’s strategic objectives in the period with robust levels of new business enquiries from both new and existing customers for a combination of IT networking projects and the Company’s newer smart building software solutions.
This progress is further evidence of the evolving dynamics of the RedstoneConnect financial model as management focus on building the Company’s recurring revenue base whilst growing margins. In the first six months of the current financial year, the Company continued to develop its suite of software solutions for smart buildings and commercial spaces with the expectation that these will provide the Company with an increased flow of annuity based revenues in the future.
This broadening of the Company’s focus from project-based contracts to annuity, software licence and higher margin services was evidenced in new contracts in the first half of the year, which included:
- a £12 million services contract extension with one of the world’s leading financial institutions;
- a three-year framework contract extension with UBS for the global roll-out of OneSpace (the Company’s occupancy management solution), following the successful deployment of the application in London;
- a contract extension with GlaxoSmithKline to roll-out the Company’s Site Map and wayfinding application at its Asian headquarters in Singapore; and
- the award of a contract to Connect IB and Redstone for the implementation of the Company’s smart technology software at a major UK shopping centre utilising both smartphone and beacon technology to deliver a host of services.
In addition, the Board is pleased with the structural progress being made including:
- the successful rebranding of the Company as RedstoneConnect, to reflect a combination of the Company’s established presence in IT infrastructure and its newer additional focus on implementing smart application software solutions; and
- the integration of Connect IB (acquired in March 2016), which has already begun to generate a number of new cross-selling opportunities, including the deployment of Connect IB’s wayfinding, smart car parking and smart retail solutions for both new and existing customers.
Post period end, the Board was pleased to have completed the restructuring of the Group, following on from last year's successful divestment program, with the early exit of an onerous lease (not due to expire until September 2018) over 20,761 square feet of surplus office space in Stokenchurch, Buckinghamshire, previously used as the Company's headquarters; resulting in both reducing the Company's cost base and generating a significant cash saving.
The Board looks forward to providing a further update on progress with the half year results, which will be published on 11 October 2016.
Mark Braund, CEO of RedstoneConnect commented:
“We are pleased with the strong first half of trading, having secured a number of new business mandates allowing us to broaden our revenue base to include recurring project, licence and higher margin services business. The strong momentum in the first six months of the year has continued into the second half and management is confident in the Company’s prospects for the full year.
“The heavy lifting associated with our restructuring is now complete leaving the business leaner, fitter and ready to capitalise on a number of significant opportunities. The commercial deployment of our software products alongside our recent success of interconnecting our smart solutions with our traditional IT services is testament to both the quality of our people and solutions, as well as demonstrating the successful implementation of our strategy.
“We continue to trade well, buoyed by the ongoing demand from customers to deploy our services and solutions to reap the commercial and operational benefits our technologies provide.”