Redstone plc - Overview
Martin Balaam – CEO
March 2007
Redstone plc
“Redstone is uniquely positioned as the
only IT & Communications provider
within the UK and Ireland to be able to
offer all core competencies in house.”
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Redstone Overview & Strategy
Voice
IP Solutions
Telecoms
IP Telephony
Enterprise Server
IP Network
OneNet
Internet
ISP & Management
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Redstone plc
Core Competences
Technology 6%
Managed 6%
Telecoms 31%
Fixed Line Telecoms
Mobile Telecoms
IP Networks/Convergence
Converged 39%
ISP/Security/Microsoft
Mobile 18%
Enterprise Server & Storage
IT Services: Telecoms
51%:49%
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Redstone plc
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Market Participants
IT/Telecom Competitive Landscape
Telecoms
Mobile
Converged
Solutions
Managed
Solutions
Technology
BT
O2
BT
RM
IBM
Carphone W
Vodafone
Affiniti
Ramesys
EMC
C&W
Orange
Di Data
Synetrix
Thus
T-Mobile
Azzurri
Phoenix
AT Comms
3
Logicalis
Lynx
Redstone
Redstone
Redstone
Redstone
Redstone
“Redstone is uniquely positioned as the only IT & Communications provider within the UK and
Ireland to be able to offer all core competencies in house.
Each principal division is recognised as a market leader in its own right”
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Redstone Telecom
Fixed Line Telephony Service
Redstone Network owned and managed by BT Wholesale
Outbound, Inbound, Premium Rate, Calling Cards, Follow-Me Numbers
Hosted IP Telephony, ‘Skype’ type IP telephony
Competition: BT, C&W, Thus, Kingston
Growth Opportunities
Existing Redstone customer base
Other Redstone products through 400 strong UK dealer network
Bundled products targeting SME’s
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Redstone Mobile
Service provider for O2 and Vodafone
Distributor for all 5 major networks - O2, Vodafone, 3, Orange and T-Mobile
Competition:
as a stand alone product – all major network operators
as a combined business product – none
Growth Opportunities
Existing Redstone customer base – minimal penetration
Other Redstone products through 400 strong UK dealer network
Bundled products targeting SME’s
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Redstone Converged Solutions
IP Networking Solutions - expertise in contact centres, voice and video, IP
Networks, wireless & mobility
Cisco Gold, Avaya Gold, Mitel Platinum, BT Gold partner
A market leader in Intelligent Buildings
Competition – BT, Affiniti, Logicalis, Dimension Data, Azzurri
Growth Opportunities
IP convergence becoming mass adoption
Cross selling into Redstone customer base
Move into large multi year contract – BSF, Retail Developments
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Redstone Managed Solutions
ISP, IT Outsourcing, Remote Hosting, Co-Location, Applications
Development, Network Security & Management
Microsoft Gold Certified Partner
Bespoke application development, focus on education
Competition:
education – RM, Ramesys, Synetrix, Northgate
other – fragmented market
Growth Opportunities
Redstone customer base
Network security and management
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Redstone Technology
Enterprise Server, “mainframe”, Storage Area Networks
HP Elite Partner
HP Outsourced technical skills to Redstone in Ireland
Competition – IBM, EMC/Dell
Growth Opportunities
Expansion into UK
Redstone corporate customer base
IBM solutions
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Redstone plc
Major Shareholders in Redstone are Blue Chip Fund Managers:
Schroder VG Investment Management – 20%
Gartmore Investment Management – 15%
Cycladic – 10%
Stephens Bank Inc – 6%
Canada Life Investment Management – 5%
Society Generale Asset Management – 3%
Artemis Investment Management – 5%
Herald Investment Management – 1%
UBS Investment Management -5%
F&C Asset Management – 1%
Morley Fund Management – 3%
Lloyds TSB Development Capital – 3%
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Redstone plc
Institutional Shareholders yield financial strength:
•In April 05 Redstone raised £26m cash from
shareholders to fund the acquisition of the Xpert Group.
•In July 06 Redstone’s major shareholders invested an
additional £20m cash to fund the acquisition of
Symphony plc and Tolerant Ltd
•In Feb 07 Redstone raised £40m to acquire IDN telecom
plc and Comunica
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Redstone plc
Redstone plc Board
Non Execs
Executives
Alan Coppin – Chair
Martin Balaam – CEO
David Payne - NED
Tim Perks – CFO
Oliver Vaughn - NED
Gerry Spencer - NED
Tim Sherwood - NED
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Redstone plc
Alan Coppin - Chair
Previous Roles
•CEO of Princes Trust
•CEO of Royal Palaces
•CEO Wembly plc
•NED Carrillion plc
Current NED Roles
•Dinoptra plc
•Capital & Regional plc
•Berkeley Group plc
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Redstone plc
Martin Balaam - CEO
Previous Roles
•CEO of Xpert Group
•Lloyds Development Capital
•President Hays IMS Inc
•FD Hays IMS UK
•Deloittes
Background
•Chartered Accountant
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Redstone plc
Tim Perks - CFO
Previous Roles
•CFO of Staffware plc
•CFO of Baltimore Tech plc
•FD Leading Tech Ltd
•PWC
Background
•Chartered Accountant
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Redstone plc
Locations:
Edinburgh
Thornaby
Huddersfield
Belfast
Dublin
Wicklow
Warrington
Stoke
Birmingham
Cambridge
Ipswich
Hemel
London, City
Wokingham
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Redstone plc - partners
We only partner we the worlds leading manufacturers:
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Redstone plc - customers
Department Of
Social & Family Affairs
Ireland’s National
Police Service
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Redstone plc - customers
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Redstone plc - customers
Selected Customers
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Redstone – Revenues & GM
50
45
40
£ million
35
30
Revenue
25
Gross Profit
20
15
10
5
0
H2 05
H1 06
H2 06
H1 07
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Highlights H1 2007
Revenue increased by 41.7% to £47.4m; primarily a result of acquisitions*
EBITDA increased to £2.9m from a loss of £2.0m* **
Net Cash generated from operating activities £1.8m
Acquisition of Symphony and Tolerant in July 2006
Integration of acquisitions complete
Significant customer wins – Lancashire BSF, Foxtons, TSC
* Compared with six months ended 30 September 2005
** Before IFRS 2 charges and holiday pay accrual
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Acquisition Funding
Equity
Pre Acquisitions
Debt
£89m* £11.1m
Cash
Total
£8m
£92.1m
£13m
IDN Bank Debt
£13m
Comunica Shares
£3.5m
£3.5m
Comunica Placing
£18m
£18m
Costs & Increased W/cap
£7m
£110.5m £31.1m
* Market Capitalisation on 24 January 2007 based on a share price of 7.88p and an
issued share capital of 1,140,259,263 ordinary shares of 1p each
£7m
£8m
£133.6m
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Summary - Delivering on Objectives ‘06
Status
Added Mobile offering
9
Added scale to Fixed Line business
9
Added Indirect Channel for SME market
9
Strengthened Managed Solutions Business
9
Develop long term project opportunities for Converged Solutions
9
Extend customer base and increase cross selling
9
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Core Objectives ‘07
Integrate IDN and Comunica acquisitions
Drive cross selling through whole group - organic growth
Improve revenue visibility – win more large long term contracts
Review enlarged group spending and identify procurement savings
Expand Managed Solutions & Technology business within UK
Develop SME channel
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Outlook
Continued organic growth - profit & cash
Drive down costs
Key customer/contract wins
Increasing revenue visibility
Selective M&A to add scale and customers
Sector consolidation to continue
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Redstone plc - Overview
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