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The Markets
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The Markets
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Business & education services

Red24's shares slide as interims disappoint

Lower revenue and higher costs saw profits slide in the first half

Shares in crisis management specialist Red24 (LON:REDT) dropped on Monday after its interims underwhelmed the market.

The company saw revenue and pre-tax profit fall in the first half, partly due to the loss of a contract with HSBC (LON:HSBA) and lower demand for its crisis response business.

Red24 specialises in hostage situations, evacuations and mass product recalls and agreed a deal to provide its services to Allianz Global Corporate & Specialty, the corporate insurance arm of the German insurer, earlier this year.

Revenue slipped 10% to £2.9mln from £3.2mln the year before. The lower revenue and higher costs in the US meant pre-tax profits were worse than expected, at £350,000 compared with £490,000 the previous year.

Higher than anticipated amortisation costs and a £100,000 loss on a rand/sterling hedging contract also hit the figures.

Chairman Simon Richards said: "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."

FinnCap said pre-tax profits were "lower than we had anticipated", leading to a downgrade in its full-year forecasts.

The broker noted it kept its 2017 expectations unchanged, however.

Shares fell almost 20% to 22.2p.

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