Radstone lifted by military demand

IT firm Radstone Technology posted a 17% hike in underlying profits today after seeing increased demand by the military for its computer systems.

Radstone, which supplies products to the aerospace and defence industry, saw pre-tax profits before goodwill and one-off items rise to £7.4m (€11.3m) in the year to March 31.

The Towcester-based company also said its order book stood at record levels following a year of “substantial change”.

A strong performance at Radstone’s core computing division helped offset difficult market conditions at its smaller Electronic Manufacturing Services (EMS) arm.

During the year the group started a review of the EMS arm in a bid to improve its profitability.

The relocation of this division to a new site in Milton Keynes – which can handle significantly higher demand – meant it was now a “more efficient and tightly focused” unit.

The embedded computer business – which provides systems that fit into submarines, aircraft and other military vehicles – saw gross profits increase to £19.6m (€29.6m), compared with £17.3m (€26.2m) the previous year.

In September, Radstone acquired Canada-based technology designer ICS for £21m (€31.8m), which boosted sales in this division by £4.3m (€6.5m).

Radstone said the embedded computer arm was strongly placed to build on its position in the sector.

The group said its long-term order book – which now stands at £79.3m (€119.9m) - helped provide a good foundation for the next stage if its growth.

Chief executive Jeff Perrin said: “Not only have we fulfilled a number of major milestones in terms of our strategic development, but we have also seen our profits grow for the seventh successive year.”

A fall in turnover to £43.7m (€66m) from £48.5m (€73.4m) reflected the non-recurrence of a significant automotive contract in the EMS business, as well as the weak US dollar.

At the bottom line pre-tax profits fell to £3.1m (€4.7m) from £6.1m (€9.2m), largely due to one-off charges.

The total dividend was increased by 50% to 3.0p.