Specialist engineer Redhall Group has run into technical difficulties on a £20m contract for the Atomic Weapons Establishment that has delayed production schedules and will hit profits in the second half of 2011-12. But this appears to be a short-term blip that shouldn't affect the longer-term value of the business.
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Redhall's shares, however, suffered shedding over 15 per cent of their value as analysts at broker FinnCap cut their full-year EPS target by 4p to 11.3p. The issues appear to have arisen on subcontracted work that encountered quality and technical problems. Management says the problems have been resolved, but additional delays have added to costs.
