Trading Update and Notice of Results

RNS Number : 3216X

Nexus Infrastructure PLC

29 April 2019

 

29 April 2019

Nexus Infrastructure plc ("Nexus" or the "Group")

Trading Update and Notice of Results

Nexus Infrastructure plc (AIM:NEXS), a leading provider of essential infrastructure services to the UK housebuilding and commercial sectors, announces a trading update ahead of its interim results for the six months ended 31 March 2019 which will be announced on Tuesday 21^st May 2019.

For the six months ended 31 March 2019, Nexus expects to have achieved Group revenue of £71.0m (H1 2018: £62.9m), an increase of 12.9%. The Group order book at 31 March 2019 was £311m, up 32% year on year, with growth across Tamdown, TriConnex and eSmart Networks. The Group cash position increased to £17.8m at 31 March 2018 from £14.8m in the corresponding period last year. 

Tamdown revenue was up 6.1% year on year. However, the Tamdown business has seen delays and changes to customer build programmes, affecting resource planning, increasing mobilisation costs and so impacting efficiency. Also, customer pricing pressure and higher than expected cost inflation have resulted in increased pressure on revenues and margins. Management anticipate that these current trading conditions, which are being caused in part by the uncertain political backdrop, will continue in H2. In H1 gross margins were c.13% and management expect margins to remain around this level for the remainder of the year, materially reducing profit for the full year. Despite the difficult market backdrop, Tamdown continues to win work from its extensive housebuilding client base, with an order book of £145m (2018: £118m) up 22.5% year on year.

TriConnex has performed in line with the Board's expectations in the period, delivering both revenue and operating profit growth. TriConnex continues to differentiate itself in the market through its provision of a full multi-utility connection offer, coupled with a deep focus on outstanding client service. The business continues to grow with an order book of £163m (2018: £115.7m) up 40.9% year on year and H1 revenue was up 30% year on year with a H1 gross margin of c.31%.

eSmart Networks provides Electric Vehicle (EV) charging infrastructure, battery storage and specialised distribution network services.  The business continues to scale up as is reflected in the order book which grew to £3.0m at 31 March 2019 (2018: £0.5m) up 500%. eSmart Networks is continuing to develop its ability to deliver innovative solutions for its clients.

The Board believes that the Group remains in a strong position to deliver organic growth on the back of the continuing status of the UK housing market, where there is structural under supply and Government stimulus for the sector but like many industry suppliers, is experiencing a slow-down on the back of Brexit concerns.

Mike Morris, Chief Executive of Nexus, commented:

"The underlying demand in the UK housing market remains strong and Nexus is well positioned within this market. However, customer delays and the resultant cost pressures experienced by Tamdown in H1 are likely to continue into H2 and although management are addressing these issues, they will have a significant impact on Group profitability this year. Whilst the near-term outlook for Tamdown is disappointing we are continuing to see a solid order book which gives us confidence in future growth. I am pleased to report that TriConnex and eSmart are performing well and in-line with expectations."

Enquiries:

Nexus Infrastructure plc Michael Morris, Chief Executive Officer Alan Martin, Chief Financial Officer	Tel: [phone]
Numis Securities Limited (Nominated Adviser & Broker) Oliver Hardy (Nomad)                   Heraclis Economides      Ben Stoop	Tel: [phone]
Financial Public Relations Camarco Ginny Pulbrook Tom Huddart	Tel: [phone]

Notes to Editors:

Nexus is a leading provider of essential infrastructure services to the UK housebuilding and commercial sectors. The Group comprises: Tamdown, a provider of specialised civil engineering, infrastructure and concrete frame services; TriConnex which designs, installs and connects utility networks to properties on new residential and commercial developments; and eSmart Networks which focuses on electric vehicle charging and smart grid infrastructure.

Tamdown has a well-established market position having been in operation for over 40 years and currently counts amongst its customers the majority of the top ten largest UK housebuilders. TriConnex was established in 2011 to take advantage of deregulation in the utilities market with the goal of being recognised as the UK's leading independent provider of utility connections to new developments.  eSmart Networks was set up in 2018 to respond to the UK's need for charging infrastructure as the transition from internal combustion engine vehicles to electric vehicles gathers pace.

 

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