4 Jun 2009 07:00
4 June 2009
Redstone plc ("Redstone" or the "Group")
Trading Update
Redstone issues the following trading update ahead of its preliminary results for the year ended 31 March 2009.
Current Trading
Since the announcement of its interim results on 18 December 2008, trading has been slightly below expectations as a number of cost reduction measures have taken longer to implement than anticipated and market conditions remain extremely challenging. The Board currently expects that adjusted EBITDA* for the year ended 31 March 2009 will be between £7.5 million and £8.0 million.
The delay in achieving the benefit of the cost reduction measures in the current trading environment is expected to result in first half trading for the next financial year to be at a similar level to the previous six months. However, as a result of management changes and additional cost reduction measures, the Board expects trading in the second half of the year ending March 2010 to be similar to the first half of the year ended March 2009.
Balance Sheet
As at 31 March 2009, the Board expects net debt will be approximately £26 million. Following a review of the carrying value of goodwill on the balance sheet, the Board expects to record an impairment charge of approximately £32 million in respect of goodwill relating to historical acquisitions.
On 25 February 2009 Redstone announced that it had signed a revised facility agreement with Barclays Bank which expires on 31 December 2011. The Group continues to review the appropriateness of these financing arrangements with Barclays in the light of current trading conditions.
Commenting, Alan Coppin, Executive Chairman, said:
"We, along with many other companies operating in our sector, have experienced weakness in overall trading conditions as a result of the current economic downturn. However the Board believes the actions it has and is taking will ensure the Group continues to build on its strengths and that it is well positioned to take advantage of improved trading conditions as and when they arise."
*before exceptional items and stock compensation charge
Enquiries:
| Redstone plc | Tel. +44 (0)845 203 3943 |
| Alan Coppin, Executive Chairman | |
| Tim Perks, Chief Financial Officer | |
| Investec | Tel. +44 (0)20 7597 4000 |
| Andrew Pinder | |
| Tim Pratelli | |
| ICIS Limited | Tel. +44 (0)20 7651 8688 |
| Tom Moriarty | |
| Fiona Conroy |