Trading Statement

RNS Number : 0777I

Redcentric PLC

28 June 2013

 



28 June 2013

REDCENTRIC PLC ("Redcentric")

TRADING UPDATE

	Redcentric plc (AIM:RCN.L), a leading end to end managed service provider delivering innovative technology to improve business productivity and efficiency, today issues the following trading statement: Highlights: ·     Trading in the period from 30th September 2012 to 31 March 2013 remained consistent with the six month period preceding as presented in the Company's Admission Document.. The significant re-organisation in preparation for the demerger of the businesses from Redstone plc resulted in management accelerating the restructuring programme that was undertaken post the acquisition of Maxima plc. It is estimated that in excess of £4 million of annualised cost savings will have been achieved following the demerger at a cost of less than £2.5 million. ·     The operational integration of the demerged businesses into a single trading entity remains on track. ·     Following the demerger the business indicators and new contract wins are encouraging, while their multi year nature augers well for future financial performance. ·     The Company's opening net debt position at the demerger effective date of 8 April 2013 was £11.2m. The Network Based Managed Services businesses that comprise Redcentric were successfully demerged from Redstone plc on 8 April 2013, and subsequently the shares of Redcentric plc were admitted to AIM on 24 April 2013. The last historic financial information disclosed for Redcentric was published in the AIM Admission Document dated 18 April 2013. The document included separate financial information for the Redstone demerged businesses (being the businesses that were demerged out of Redstone plc that were owned throughout the track record period) on a carve out basis for the period to 30 September 2012, and Redcentric MS Limited (formerly Maxima Managed Services Limited) consolidated financial information for the period to 31 October 2012. This trading statement provides a trading update for the period from the last reported financial information included in the Company's Admission Document. In addition the Company will release summarised and consolidated interim financial information regarding the businesses now comprised by Redcentric plc for the period to 31 March 2013 by 30 September 2013.
	Current trading and outlook
	The Redcentric businesses have, since the date to which the latest financial information was included in the Admission Document dated 18 April 2013, continued to renew existing contracts and win new business. Since the demerger on 8 April 2013 the Company has announced the following contract wins, worth approximately £9.4 million of total revenue over five years: ·     9 May 2013, a managed Wide Area Network ("WAN") contract with a leading UK mobile and broadband services provider. The deal will cover the monitoring and support of the WAN, managed security services and technology enhancement and management, and is worth approximately £1 million over the next 12 months, and comes after Redcentric was awarded a managed service contract renewal in December 2012 from the same customer ·     21 May 2013, a three year managed network and cloud contract with a top automotive company worth approximately £1.1m over the course of the contract, of which approximately £600k is net new business. The agreement is the renewal and expansion of a previous long term network contract, and will see Redcentric provide additional datacentre and network management services to support the client's ambitious growth plans. This contract has grown significantly in scope as a direct result of the successful business transformation that created Redcentric ·     21 May 2013, a five year cloud based managed services agreement with a charitable organisation worth approximately £1.1m over the course of the contract. Using its highly resilient cloud infrastructure, Redcentric will provide and manage for the charity a complete hosted virtual infrastructure as well as deliver application layer services. This contract win is testament to Redcentric's compelling, client tailored, cloud offering, and demonstrates success in delivering services aligned to customer needs ·     26 June 2013, provision of managed services, networking and connectivity to a property developer in a new three year contract.  The deal is worth approximately £4.7m in revenue over the course of the contract. Redcentric's consultancy services will form a key part of transitioning the new customer to its services. ·     26 June 2013, an existing governmental customer extended its managed services contract with Redcentric. The Company will continue to provide support and professional services for an additional year in a contract extension worth £1.2m.  The Company also signed a further managed service contract with the same customer for £300k to support additional elements of their environment including troubleshooting support and hardware maintenance. The Company has been pleased with the reception which the demerger received in its core markets, with all major clients responding positively to the strength of the combined managed service offering, and the establishment of a clear and focussed identity and corporate presence.
	Tony Weaver, CEO of Redcentric plc, commented:
	"The business is performing as we expected it to and I am pleased the demerger of the Redcentric businesses from Redstone plc was completed successfully and according to planned timescales. I am delighted that our key customers are already seeing the advantages that the combined product offering brings, and have the confidence to award us new contracts and renewals with additional services. Integration is proceeding according to plan and I look forward to further updating shareholders on our progress ahead of our first interim results to 30 September 2013." For further information:
Redcentric plc Tony Weaver, Chief Executive		Tel. [phone]
finnCap - NOMAD & Broker Charlotte Stranner / Stuart Andrews		Tel. [phone]
MXC Capital Advisory LLP Marc Young		Tel. [phone]
Newgate Threadneedle Josh Royston / Hilary Millar		Tel. [phone]

About Redcentric

Redcentric offers a wide range of Network Based Managed Services solutions, including:-

·    Managed security services

·    Connectivity solutions

·    Unified communications solutions

·    Hosted applications and Cloud based services

·    Physical and virtual data centre services

·    ICT project and hardware maintenance services

These services are supported 24 hours a day, 365 days a year. The Directors believe that the strength of the Company's support function is a key differentiating feature that makes its services more attractive than many of its smaller competitors, while the innovative nature of its solutions offers flexibility to meet client's needs in a way that larger rivals are sometimes unable to match

In addition to the managed services it delivers, Redcentric also has an ICT projects capability to generate business for and support its core managed services offering. These services include the design, sale and implementation of complex ICT infrastructure projects, and their on-going support and maintenance. Underscoring these capabilities, Redcentric has leading technology partners including Brocade Elite Partner status and Cisco Gold Partner accreditation.

 

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