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RedstoneConnect Plc

INTERVIEW: RedstoneConnect Plc Positive Results & £21.6m Disposal

RedstoneConnect Plc (LON:REDS) CEO Mark Braund talks to DirectorsTalk about final results out for the year ended 31st Jan 2018 and the announced the sale of its Systems Integration & Managed Services business. MArk runs us through the key financial highlights, the key operational points, the rationale behind the sale and what they plan to do with the funds.

RedstoneConnect Plc is focused on technologies that make real estate more efficient and businesses more effective. Its businesses, Redstone, Connect IB and Commensus, provide the infrastructure capabilities and the software applications to deliver smart building and smart workspace solutions for commercial businesses, public sector organisations, real estate owners and managers.

Outlook

There is currently a tipping point in the evolution of the workplace technology market. Until relatively recently the main focus of technology in the context of smart buildings has been on monitoring and managing energy use. However, today building operators are now far more interested in occupant well-being and space optimisation. Because this workplace technology market is in its infancy and is highly fragmented, RedstoneConnect has an opportunity to establish leadership through technology. The market is expanding rapidly with estimated compound annual growth rates between 2017 and 2022 of 25% in EMEA, North America and Asia. We want to use our available resources to capitalise on this opportunity.

Following the disposal of the Managed Services and Systems Integration business the Group will reduce in size operationally. However, we plan to use the funds realised from the disposal to accelerate the growth of our Software business. This growth will initially be organic through the development of our direct and indirect sales channels, both in the UK and overseas. However, should we identify appropriate targets, we also plan to make acquisitions of businesses which either have a customer base that can be migrated onto our OneSpace platform or offer complementary technology that can add value to the OneSpace platform.

After what has been a very traumatic number of years where we have taken the business from crisis to stabilisation we have now reached another important junction in the RedstoneConnect journey. The disposal of the Systems Integration and Managed Services business brings to an end the restructuring of the Group. From here we see a very exciting future where we build a business which is focused on high margin annuity revenues with significant international growth potential. – Frank Beechinor Chairman.