Shares in Red24 (AIM: REDT) were in demand this morning after the security company announced contract wins with two major insurance underwriters in the US to provide special risk consulting services.
The first agreement is for an initial period of three years in the field of product contamination, while the second deal is for the special risk services, representing a first sales success for the additional staff hired in autumn. The contracts are expected to add US$0.7 million of additional revenues over the next calendar year.
“In the company's half yearly statement we announced that the company had taken on additional staff to offer a fuller range of special risk advice and I am delighted that this has led to such immediate success. These contracts are further evidence of the solid progress being made by the business and underpin our confidence in the future,” said chairman Simon Richards.
Red24 released its interim results earlier this month, reporting a revenue increase of 16% to £1.87 million and a pre-tax profit of £231,000 compared to last year’s £198,000. Growth in the customer base led to a 30% increase in its segment revenues. The company also managed to renew its contract with AIG Travel Assist Inc for security assistance services for another five years, which it said supported its strategy of expanding business in the Americas and Asia.
Shares in the company rose 8% on the news this morning.