Red24 slumps as it posts drop in interim profit, revenue

Shares in Red24 slid after the company reported a drop in first half revenue and pre-tax profit after losing a contract with HSBC.

Pre-tax profit for the six months to the end of September fell to £346,000 from £487,000 on revenue of £2.96m, down 10% from the same period last year.

The crisis management assistance company attributed the declines to the loss of a contract with HSBC, weaker demand for its crisis response business and a loss on foreign currency hedging activities.

Chairman Simon Richards said: "In many ways this year was always going to be challenging for red24 and, 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.

“In other ways the first half has been hugely exciting and has established important growth drivers for us going forward; we completed the acquisition of RISQ which is performing strongly, invested in the development of our US based Product Safety Team and launched the red24 Academy.”

The company said this level of investment may hold back its results in the short-term but places the group on a firm growth path for the future.

Red24 said confidence in these plans underpinned its decision to lift the interim dividend by 9% to 0.25p.

At 1115 GMT, Red24 shares were down 20% at 22.12p.