RedstoneConnect is changing its business model and seeing mixed results in its bottom line.
According to the outfit’s results, it significant revenue growth for its smart building software which was up 194 percent to £1.7 million; and managed services businesses, up 18 percent to £9.1 million, in the first six months of FY18.
While this is not bad it did not offset a 26 percent decline in turnover from its systems integration activity, down to £9.2 million from £12.5 million in the period.
Some of RedstoneConnect’s numbers are due to the timing of income from some of its larger contracts and so there is little sign that the company is in trouble.
In fact, chief executive Mark Braund is rubbing his paws expectantly seeing designing infrastructure for smart buildings as a core part of the business.
Overall group revenue slipped three per cent year on year to £20m, with adjusted EBITDA up 12 per cent to £1 million. The company’s net loss widened to £867,000 from £485,000, with acquisition and integration costs associated with the Anders+Kern buy for £1.4 million in cash and the ongoing expenses related to the development of the software division taking their toll.
However, contracts for the deployment of in-building cellular (IBC) and distributed antennae system (DAS) infrastructure and services at two major London banks are set to boost its 2H18 and 1H19 turnover, while management remains confident that similar deals are in the pipeline.
Mark Braund, CEO of RedstoneConnect, said the firm has performed well in the first half of the year, with trading momentum weighted towards the second half.
“We continue to see good traction for our software solutions alongside our infrastructure and managed services capabilities, which is improving both the predictability and quality of our earnings”, he said.
“The integration of A+K is now complete and is contributing positively to the business, not only through the addition of services to the group, but also the diversification of our routes to market for our existing products and IP.
“Coupled with our continued investment in product development across our software solutions division, we anticipate the next 12 months will be an exciting time for RedstoneConnect.”
