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LONDON (Alliance News) - REACT Group PLC Monday said it just missed out on turning a profit in the first half of the current financial year after managing to increase revenue by around two-thirds as the business continues to grow organically and through the addition of bolt-on acquisitions.
The rapid-response cleaning and decontamination services business said revenue rose to GBP1.2 million in the six months to the end of March from GBP704,000 a year earlier whilst the gross profit in the period increased to GBP530,000 from GBP358,000.
Administrative expenses were higher year-on-year at GBP560,000 from GBP393,000, but there were GBP1.2 million worth of costs related to its AIM listing that were booked last year which were not repeated in the most recent six month period.
Unfortunately, REACT failed to escape the red in the period but came very close by reporting a tiny GBP30,000 pretax loss in the first half of the current financial year compared to the GBP1.2 million loss booked a year earlier.
REACT is growing the business organically and through acquisitions and focused on its core business in the first half by growing the amount of new and existing clients within the specialist deep cleaning unit.
The company secured some new customers which are "niche businesses" by acquiring small companies or specialised personnel in the period at no cost which have brought customers over to REACT.
"The trading outlook remains robust; the group has a strong long term client list including 39 out of the 43 police federations in the UK. With greater regulation coming into all areas of health and safety, the company's high level of accreditations and the new ones acquired in asbestos disposal, environmental testing, drug disposal and many others continue to make this group be increasingly considered in a wider range of contract applications," said REACT.
"The board is confident that the management will continue to grow this business strongly both organically and use its well-funded base to continue to add niche businesses that will enhance the overall offering to the company's expanding base," the company added.
The company said it had cash, cash equivalents and overdrafts worth a total of GBP1.4 million at the end of March compared to GBP1.8 million a year earlier.
REACT shares were trading down 4.6% to 1.55 pence per share on Monday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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