Techmarket View11 Oct 2016 11:20
RedstoneConnect, the AIM-listed managed services provider formerly known as COMS, appears to have put past troubles firmly behind it.
The Group’s adjusted H117 EBITDA grew 50% yoy to £900k in the six months ending 31st July this year, indicating it is in course to exceed the £1.3m posted in FY16 following a loss of £700k in FY15.
Revenue grew at a much lower rate, up 1.5% to £20.8m yoy, suggesting the post-COMS restructuring programme has succeeded in bringing down operational costs. Gross margin from continuing operations was also up 3% or 300-basis points on H115.
That restructuring now appears complete after the Group exited a legacy occupancy lease at the former head office in Stokenchurch and finalised the integration of its IB Connect acquisition. The £1.3m addition of the smart building software applications provider is helping RedstoneConnect win new deals, notably the contract to design a smart retail and car parking solution for Milton Keynes City Council signed in September.
The agreement involves development and delivery of smart applications backed up by underlying infrastructure support and maintenance elements, involving car parking, payment and mobile digital wayfinding apps, hosted CRM and interactive kiosk directories. We think it’s an prime example for any supplier looking to maintain infrastructure services revenue whilst assisting customers in digital transformation and laying a basis for future Internet of Things (IoT) expansion.
RedstoneConnect’s turnaround after selling off its loss-making telephony business in 2015 looks to be in full swing, with the pipeline for H216 additionally buoyed by a 5 year, £12m contract extension from an unnamed financial services institution won by its Redstone infrastructure services division, and a three year deal to deliver its SaaS based OneSpace workspace management software to UBS London.
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