RedstoneConnect Share News (REDS)

(ShareCast News) - RedstoneConnect has made progress in shifting its financial model towards more annuity-based revenue streams in the first half after deciding to focus on providing technology and services for smart buildings and commercial spaces.The group's revenue from continuing operations for the six months to 31 July rose 1.5% to £20.8m and its gross margin increased by 3% to 19% in six months ending 31 July 2016."RedstoneConnect continues to develop strengths in each of our core segments, concentrating on high value opportunities, as we change our business model to one with a focus on higher margin, and annuity-based recurring revenue," said Chairman Frank Beechinor.Adjusted earnings before interest, tax, depreciation and amortisation rose 50% to £0.9m and profit after tax from continuing operation rose to £0.8m from £0.02m in the previous periodCash and cash equivalents rose to £2.9m from being overdrawn by £0.1m in previous period.During the period, the firm raised £3.1m to fund the acquisition of Connect IB limited in March 2016. The integration of the newly acquired firm is now complete and delivering revenue synergies, according to the board.The two firms collaborated in the development of OneSpace, the group's occupancy management software technology, and secured its first deal with UBS.Other cross selling opportunities for the two firms have also been identified including a contract win for the company's smart technology software at a major UK shopping centre.After period-end, the company also completed its transformation into a technology and services provider after exiting its Stokenchurch lease.Earlier in 2016, the company also rebranded itself as RedstoneConnect to reflect its new business focus following the sale of its telephony services division in May 2015 and its Media division in December 2015.Beechinor said: " Our ability to combine the UK's leading smart infrastructure business with an exceptional software proposition, creating a compelling end-to-end client solution, has quickly resonated with customers as they seek to future proof their real estate infrastructure whilst leveraging efficiency gains and maximising revenue generating opportunities."Looking forward, Chief Executive Mark Braund said: "Our priorities as we move into 2017 are on working with existing and new clients to deliver high value opportunities, particularly those that will deliver higher margins and annuity-based recurring revenues. Our pipeline of sales opportunities is strong, a clear indication of our ability to leverage our traditional IT and smart infrastructure experience alongside our newer software solutions."The share price rose 1.54% to 1.60p at 1003 BST on Tuesday.