Redstone Technology Ireland sold to PFH Technology

2 November 2010

Redstone plc

("Redstone", "the Company" or "the Group")

Redstone Technology Ireland sold to PFH Technology Group

Redstone plc (AIM:RED.L), the network-based provider of end to end managed services, has agreed to sell its Redstone Technology business. The sale, effected by means of a disposal of a wholly owned Irish subsidiary, comprises the entire business, undertaking and trading assets, excluding property and intra-group indebtedness of Redstone Technology Limited (arising from the acquisition of Xpert Group in 2005). The business has been acquired by PFH Technology Group Limited ("PFH"), Ireland's largest private ICT company, for a cash consideration of £2.25 million. Redstone will retain cash of approximately £0.3m. Cash consideration of £2.0 million will be received upon completion of the sale with the balance deferred until the first anniversary of the completion date.

Redstone Technology provides enterprise storage solutions and is a specialist in business critical enterprise-class servers and provides an array of professional, consulting, logistics and maintenance services throughout Ireland. It is headquartered in Dublin covering the whole of Ireland, with service personnel and associated spare parts inventory located in Dublin, Wexford, Cork, Limerick, Galway, Sligo, Tipperary, and Belfast.

In the year to 31 March 2010, Redstone Technology reported revenues of €10.9m, adjusted EBITDA (earnings before net finance costs, tax, depreciation, amortisation, exceptional items, goodwill impairment and share-based payment charges) of €0.4m and profit before tax of €0.07m. As at 31 March 2010, net assets (net of inter-company receivables and property interests) were €0.69m. The proceeds of the sale will be utilised by the Group in delivering its strategy.

The sale is in line with the Group's ongoing review process to dispose of and discontinue certain non-core assets and businesses, in order to deliver cost savings and drive higher margin revenue streams. The disposal will reduce Group overheads going forwards and is a further step in refocusing the Redstone business.

Tony Weaver, Chief Executive of Redstone, commented: "We are pleased to have completed another stage in delivering our strategy of refocusing Redstone's operating activities, enabling the Group to concentrate on building the leading network-based, end to end, managed data services and applications provider to the UK mid market."

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