Scandal-hit Redcentric in recovery mode
MSP Redcentric is recovering from the financial reporting scandal which hit the company a year ago. AIM-listed Redcentric saw turnover decline 1% year-on-year to £51m in the half-year ended 30 September 2017, with adjusted EBITDA up 1% to £9m.
And pre-tax losses improved from £2.5m in the same period last year to just a £28,000 loss this time. Most of last year's losses were down to sorting out the financial miss-reporting mess.
Martin Courtney, an analyst at TechMarketView, said of the results: "The figures are hardly spectacular, but they do indicate that despite its recent troubles Redcentric has avoided the worst. The signs are that the company is keeping hold of existing customers - recurring revenue remains at 87% of the total - whilst speeding up its invoicing and collection processes to improve operating cash flow [which exceeded adjusted EBITDA by £2.3m]."
Net debt was cut by £6.2m to £33.3m during the period, and Redcentric expects additional benefits from an ongoing cost-cutting programme, including a small headcount reduction, and the closing of a London office and a third party data centre.
Courtney added: "As a 'new broom', recently appointed chief executive Chris Jagusz can legitimately distance himself from the fallout of Redcentric’s prior accounting miss-statements and focus on growing the business in the immediate future."