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REDHALL Group-a nuclear lift in share price (RHL)     

moneyplus - 01 Aug 2006 19:12

Bought some of these today as the sp has risen sharply because of future nuclear contracts-worth some research and checking out. This one has a lot further to go IMO.

soul traders - 01 Aug 2006 19:15 - 2 of 15

No kidding! I thought your headline was uncharacteristically rampish - but recent preformance cannot be argued with. I shall put on my researching spectacles and give this the once-over.

moneyplus - 01 Aug 2006 20:40 - 3 of 15

Glad to have your opinion Soul-it seems as though this one is overlooked by small investors but something is pushing the price up. The company has only just broken into a small profit. more comments on ADVN bb. to look at.

soul traders - 02 Aug 2006 12:18 - 4 of 15

MP, looking at the state of the turnaround of this company, there's no doubt that it's ringing all the right bells.

The balance sheet is a slightly different kettle of fish - include the pension fund deficit and the co is actually in negative equity!

Given the strength of the forward order book this is something that could probably be overcome. Perhaps the state of the pension fund is something that's due for review - can't believe that with the recent strength in the markets they're still showing the same loss.

Forthcoming profits are going to depend to a great extent upon the timing of the company delivering on its contracts - the timing of revenue recognition could be crucial.

I'm comforted, however, by the small market cap - at £12 million I get the feeling that if they continue to win orders they could see a fair bit more growth. Something tells me that the market for Redhall's services is increasing and that the future should be bright.

Looking at the chart for the last two years is also pretty surprising - a year ago this co was worth only about £2.5 million. I wish I'd known about it in February when the turnaround started becoming apparent!

I'll take a look at the ADVFN stuff as well - it would be interesting to see what people's estimates are of the general market.

soul traders - 02 Aug 2006 12:19 - 5 of 15

By the way MP, any chance of a chart in your header? That ought to convince a few people!

moneyplus - 02 Aug 2006 12:41 - 6 of 15

Sorry-I'm not clever enough to do all that-dizzy blonde and all that!! but I'm sure you're right so feel free to start a new thread if you have time.

cynic - 02 Aug 2006 13:31 - 7 of 15

I suspect the interest in this stock is because the govnt has indicated it is now pro nuclear power, and of course the recent figures were good ...... While it is mildly encouraging that one of the institutions holds about 16%, the cap and number of issued shares is tiny, so any movement in any direction will be exaggerated ..... I note the indicated spread is also about 10% and NMS only 1000 shares.

spitfire43 - 04 Dec 2008 11:01 - 8 of 15

Solid full year results today, slightly ahead of expectations, the sp is up to 198p +25p. Worth a good read up of full results, they say that with the credit crunch they haven't seen any major change to opportunities afforded to the business. RHL have a net cash position of £1.86m now and EPS of 16.9p, it' worth remembering that the tax charge was only 16.7% this year, this will slowly increase to a full charge in 2011.

The pension position is much stronger now, RHL paid in £3.0m in 2007 to the pension fund. They only have a deficient of 886k due to recent stock market weakness, a slight increase from last year.

The nuclear and engineering divisions are both performing very well, though I guess the recent weakness in the sp must have been caused by doubts about how the engineering division would fair in a recession, but so far it hasn't had any effect. Lets hope this continues.

Investinggarden - 08 Jul 2009 12:03 - 9 of 15

Buy/Hold recommendation from Growth Company Investor

http://www.growthcompany.co.uk/recommendations/1051122/redhall.thtml

benlin - 27 Jan 2010 16:17 - 10 of 15

Buy Redhall Group (RHL) at 166.5p

Says The AIM & PLUS Newsletter on uk analyst

THE BUSINESS

Not a penny share but we think the share price of this free share tip will head sharply higher. Redhall is an AIM-listed business which over the years has built itself up into a group of seven specialist engineering services firms. Like all engineers the company has been hit by the recession, but on a low price earnings multiple, having a strong cash position and offering a decent dividend, we believe the shares are worth further investigation......

HARRYCAT - 16 Dec 2010 10:08 - 11 of 15



Interesting that Shares Mag also had this company as one of their top picks for 2010!
Now is on the radar once again for a re-rating in 2011.

2.12.10 LONDON (ShareCast) - Engineering support services group Redhall said annual profit slipped after substantial rebranding costs.

Chairman David Jackson said he was pleased with the group's performance in difficult market conditions.

Demand from the oil and gas was satisfactory while Defence traded exceptionally well with operating profit almost double last year, the group said. Process however traded below expectations.

For the year ended 30 September pre-tax profit fell to £4.5m after substantial exceptional costs while revenue for the period rose 12% to £144.7m. Adjusted profit before tax increased 9% to £7m.

"The medium and long term prospects remain extremely good. We are confident that we have positioned the business in key sectors in growth markets and in particular we are looking forward to the start of the Nuclear New Build programme where we have a lot to offer" said Jackson.

HARRYCAT - 20 Dec 2010 10:14 - 12 of 15

Was watching, but sadly missed the rise! Looks like it may be due to the recently announced proposed government subsidies to the nuclear industry.

HARRYCAT - 02 Jun 2011 07:48 - 13 of 15

StockMarketWire.com
Support services group Redhall reported revenue of £64.3m in the half-year to end-March (H1 2010: £65.4m), with adjusted profit before tax of £1m (H1 2010: £3.3m).

Adjusted operating profit was £1.2m (H1 2010: £3.5m).

Adjusted fully diluted earnings per share were 2.4p (H1 2010: 8p).

Net debt as at 31st March was £10.8m as a result of £14.6m outflow from operations principally due to Vivergo.

Redhall said the poor first half was largely due to the loss of the Vivergo contract.

Defence was performing well with the award of the first phase of a £20m contract from AWE.

The order book stood at at £101m including £25.6m received since 14th March 2011.

David Jackson, Chairman & CEO, commented: "Our business has suffered a set-back with the cessation of the Vivergo contract which has contributed to a disappointing first half result. The Board believes this is a low point and trading will be much improved in the second half and beyond. We are deeply committed to resolving the Vivergo issue and restoring shareholder value."

zephod - 09 Mar 2012 11:57 - 14 of 15

on a bit of a mission since xmas this one
(see harry's chart post 11)
probably due to their nuclear expertise
it's a thin market - so not for traders.
n.b. i'm a long term holder so dyor

dreamcatcher - 15 Jun 2013 14:56 - 15 of 15

Shares -

Redhall’s recovery in waiting


Nuclear support services expert Redhall (RHL:AIM) is a good example of a company which trades significantly below analyst price targets. The reasons behind the depressed price are falling earnings and an unresolved court battle which has cast a shadow over restructuring benefits and traction with cross-selling efforts. Yet analysts are unanimously positive over the company’s future.

The gap between how the market values a company versus analysts’ forecasts is the core discussion in this week’s issue of Shares. We look at several equity situations, provide guides on how to understand valuation models and explain what it would take for companies to re-rate and hit a price target.

In Redhall’s case, the market’s muted reaction yesterday to half-year results shows that investors are not yet prepared to take the plunge and consider the £15.2 million cap to be a bonafide recovery story. It needs to provide evidence of earnings recovery and resolve the legal issue relating to the termination of a contract with Vivergo.

RHL - Comparison Line Chart (Actual Values)

At 51p, Redhall trades considerably lower than broker price targets. FinnCap is looking for 80p, Charles Stanley eyes 110p and Arden has a ‘longer-term’ price target of 140p.

Interim results on 12 June showed a reduction in earnings on the previous six months, causing investors to worry about the recovery efforts. On a year-on-year basis, adjusted operating profit fell from £1.6 million to £1 million. Gross margins have fallen from 17% to 15%, no dividend was declared and net debt has risen from £10.6 million to £18.6 million over the six-month period because of working capital commitments.

A quick chat with the management yesterday reveals that cross-selling efforts could be key to earnings growth. This is securing manufacturing work for customers to whom it normally provides specialist services, and vice versa.

Unfortunately the weak earnings and subsequent downgrade to forecasts by analysts over-ruled any confidence in the management’s outlook.

So when will value investors start to reappraise the stock? The shares, after all, have nearly halved in the past 12 months and trade on a low price to earnings (PE) multiple for its sector. Based on 2013 forecasts, the PE is 8.3, a reflection of historic disappointments and present earnings and balance sheet weakness. In contrast, peer group giant Babcock International (BAB) trades on a PE of 16.2 for its current financial year.

A potential catalyst for getting investors back on side will be conclusion of the Vivergo matter. The court hearing concluded seven months ago, so Redhall may get a definitive answer over the next few months.

Charles Stanley analyst Andy Smith reckons there’s plenty of reasons to be bullish about the stock. It is worth noting that his employer is the house broker yet this analyst does know the sector very well and has made some good calls on other stocks. He says the decline in first-half profitability was largely down to the timing of new work in the nuclear and manufacturing divisions rather than a lack of volume. The group’s order book is at record levels, having increased from £119 million in September 2012 to £152 million.

Smith forecasts that Redhall will this year report a 15.8% rise in pre-tax profit to £2.2 million. This jumps to £3.9 million in 2014 and £5.9 million in 2015 which certainly implies better times for the stock ahead.

None of the analysts have forecast a resumption of the dividend. The company hopes it will eventually revive the shareholder reward but wouldn’t put a definitive time on when this will happen. It merely says the dividend will depend on strong profit, cash and resolution of the Vivergo issue.

There’s clearly plenty of reasons to be either bearish or bullish for the stock in its present situation. But one thing’s certain: you’d be foolish to not keep your eye on events given those strong earnings forecasts.
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