Redhall shares snap higher after placing shares at a premium

Redhall Group, the manufacturing and services group announced a successful placing and debt conversion at a premium as management continued to progress on the restructuring plan unveiled three years before.

The AIM-listed outfit said it raised £9.5m via a capital increase and a further £3.75m through the conversion of debt into new ordinary shares, all at a price of 10.0p per share - for an 11.1% premium.

News of the fund raising, which had been scaled back, saw the shares snap 23.61% higher to 11.12p, giving the firm a market capitalisation of £22.26m.

"The strategic focus of the past two years has seen Redhall transform from a labour intensive contracting business into a Group delivering high integrity manufactured products and services into complex, secure and hazardous environments," Chief Martyn Everett said.

Nearly five years ago the shares had traded as high as 313p.

Earlier on Wednesday morning, the company announced it had returned to an adjusted interim operating profit of £0.2m over the six months ending on 31 March, after having incurred losses of £100m in the year-earlier period.

More significantly, the order book grew from £27m to £32m, with management highlighting that it had won £8.0m-worth of projects related to Hinkley Point C.

Everett was confident regarding the outlook for the company, telling shareholders: "We continue to respond to a very high level and value of requests for tender particularly for nuclear new build and decommissioning and infrastructure projects at Booth Industries and Jordan Manufacturing and we continue to focus on converting these opportunities.

"We are delighted to have obtained a number of orders for work relating to Hinkley Point C through Jordan Manufacturing, which is based locally in Yate. We are confident that our capabilities will allow us to win further work on our own account and in conjunction with others."

Interim losses before tax ran to £619,000m, down from -£752,000 for the year before.

Wakefield-based Redhall said cash at period end stood at £350,000, down from £1.44m one year ago, amid slightly lower interest payments of £292,000 and £310,000 invested in purchase of plant and property as well as intangibles.

No interim dividend was forthcoming.