React losses deepen as margins shrink; to shut asbestos unit
StockMarketWire.com - Industrial cleaning group React said its interim losses deepened and that it would shut down its asbestos removal business.
Losses for the six months through Mach of £306k compared to £192k of red ink in the previous corresponding period.
Revenue increased 16% to £1.47m but gross margins fell due to a change in mix between higher-margin emergency and specialist cleaning part of the business and the provision of janitorial contracts.
There was also price pressure in the industry more generally, React said.
As part of a cost saving review, the company said it became apparent that the asbestos side of the business was not making a contribution.
'As a consequence, given the onerous compliance obligations for licence holders, and the risks associated with this type of business, the board has taken the decision to contract out any future requirement for asbestos removal to specialist companies rather than dealing internally.'
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