LONDON (Alliance News) - Crisis assistance company Red24 PLC saw its shares fall on Monday morning after it said pretax profit and revenue both fell in the first half, primarily due to the loss of work from a key customer and lower activity in its response business.
The company said its pretax profit for the half to the end of September was GBP346,000, down from GBP487,000 a year earlier primarily due to the lack of revenue from its identity theft service contract with bank HSBC Holdings PLC.
Revenue declined to GBP3.0 million from GBP3.3 million, mainly due to the loss of the HSBC contract and lower activity in its crisis response business, which had been boosted a year earlier by an evacuation event in Libya. About 75% of the HSBC revenue lost was replaced by new travel assistance customers, the group said.
In the first half, the group completed the acquisition of Singapore-based investigations business RISQ Worldwide and said this unit has been trading ahead of expectations.
The group said its interim dividend will rise 9.0% to 0.25 pence per share.
"In many ways this year was always going to be challenging for red24 and, whilst we have made great strides in replacing our lost HSBC revenues with new contracts with Allianz and others, we have also faced a tough comparable period in which we gained from particularly strong Response activity in Libya," said Chairman Simon Richards.
"This level of investment may hold back the results in the short term but places us on a firm growth path for the future," Richards added.
Red24 shares were down 17% to 23.00 pence on Monday morning, one of the worst performers in the AIM All-Share.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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