Engineering company Redhall has warned investors that trading in the final quarter to the end of September has been worse than expected, prompting a sharp cut in profit expectations. To compound this, new chief executive Richard Shuttleworth has concluded his review of the business by adding a further provision against legacy contracts.
Poor trading is likely to shave a hefty £1.7m off previous profit forecasts of £3.6m for the financial year and a further £1.6m will be put aside in the accounts against legacy contracts. The legal dispute with Vivergo Fuels, which has affected sentiment towards the company through the past year will come to court in the autumn and should be settled before the year end. This could result in a significant compensation award, but in the mean time ballooning legal costs require another £2m provision.
