LONDON (ShareCast) - (Sharecast News) - AIM-quoted industrial cleaning firm React has seen interim losses widen so far this year, leading it to shutter its asbestos removal business.
Including administrative costs, React's interim loss from continuing operations widened 95% year-on-year to £327,000 for the six months ended 31 March, despite the firm increasing revenues 16% to £1.47m as gross margins fell.

Gross margins fell as a result of a change in mix between its higher-margin 24-hour emergency and specialist cleaning part of the business and its standard janitorial services, as well as price pressures felt across the industry as a whole.

As part of a cost-saving review, React said it had become more apparent that its asbestos business was no longer 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," said chairman Gill Leates

Administrative costs expanded 33.4% to £667,000, including £91,000 of non-recurring exceptional costs.

React's cash balance at 31 March stood at £464,000, down from the £631,000 the firm had on hand six months earlier.

As of 1200 BST, React shares had shot up 11.11% to 0.50p.

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