Profits surge at nuclear services group

06/12/2007 James Crux

Nuclear industry support services star Redhall has energised followers with the news of a 200 per cent-plus profits surge for the year to September.

On turnover lifted 80 per cent to £57 million, pre-tax profits, before goodwill amortisation, rocketed north from £772,000 to £2.4 million, allowing for increased total dividends of 2.25p (1p), with organic growth strong and acquisitions augmenting margins.

Chief executive David Jackson, the entrepreneur who has turned the group around and formulated its ambitious growth strategy, flagged up ‘our second year of significant growth in turnover and profit’ since he was drafted in to reinvigorate the then-Booth Industries in 2005.

Growth reflected management’s strategy of investing in long-term relationships with nuclear, oil and gas, and food sector clients, with the group recording margin gains across all three of its divisions. These include nuclear services, where the group is an esteemed contractor at Sellafield and Aldermaston, the headquarters of the Atomic Weapons Establishment (AWE), specialist manufacturing, where growth is based on a huge need for storage vessels in the nuclear industry, and engineering services, seeing growth within the oil and gas, and food sectors.

Forward earnings visibility is strong, with 60 per cent of this year’s turnover ‘in hand’ at the start of the year and Redhall reporting a £64 million order book. Jackson also has his eyes on other acquisitions, mooting targets in electrical engineering and nuclear design, oil and gas and eventually businesses involved in North Sea decommissioning.

Recently recommended by Growth Company Investor at 248.5p, shares in Redhall rose five per cent to 266p in early dealings, valuing the business at £57 million.

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