FY23 Trading Update

Nexus Infrastructure PLC

03 October 2023

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE MARKET ABUSE REGULATION

3 October 2023

Nexus Infrastructure plc

("Nexus" or the "Group")

FY23 Trading Update

Nexus (AIM: NEXS), a market-leading provider of civil engineering infrastructure services to the UK housebuilding sector through its operational business, Tamdown, provides an update on trading for the 12 months ended 30 September 2023 (FY23).

Nexus previously reported a one-off impact due to ilke Homes going into administration. The Group is currently operating in challenging market conditions, and whilst there were signs of encouragement at the half-year from a number of housebuilders, housebuilding activity has slowed in the second half of the year as developers continue to navigate high inflation and increased interest rates. On an underlying basis[1], Nexus expects to report FY23 revenue of approximately £85 million and an operating loss in the range of £6 - £7 million. This is lower than the Board's previous expectations and is a result of ilke Homes, lack of new order activity due to difficult market-wide conditions, up-front costs in relation to rightsizing the Group's resources and a prudent approach on aged customer debt where a significant portion has been written off.

The Nexus Board and Tamdown management team have responded proactively to the current subdued market activity, with various mitigating actions taken to protect the Group, including:

·    reducing Nexus's overheads by £0.8 million to a run rate of £1.7 million per annum;

·    reducing more expensive hired plant on-site in favour of predominantly owned machinery;

·    reducing Tamdown's agency staffing; and

·    an ongoing consultation with Tamdown's site-based workforce for a c.25% reduction in headcount.

Notwithstanding this, the Group remains confident that the housebuilding sector will recover, not only due to the chronic undersupply of housing, but also because of engagement with its longstanding customers.

Nexus is well placed to benefit when housebuilding output improves, with its established offering, expert team, and reputation for high‑quality delivery of essential services. 

As at 30 September 2023, Tamdown's order book had reduced to £46 million which reflects the lack of new order intake and extended procurement cycles across the wider housebuilding industry. In the coming months, we expect the order book to significantly increase based on a number of live conversations with customers.

Nexus has a robust balance sheet with cash and cash equivalents of £14.6 million at the FY23 period end and the Board expects to pay a final dividend.

Charles Sweeney, Chief Executive of Nexus, commented: "Whilst we face challenging market conditions, we have taken decisive action to respond and rightsize the business. The strength and quality of our offering and strong financial footing mean we are well-placed to return to a growth trajectory when the housebuilding market improves."

Enquiries

Nexus Infrastructure plc	Tel: [phone]
Charles Sweeney, Chief Executive Officer
Dawn Hillman, Chief Financial Officer
Numis Securities Limited (Nominated Adviser & Broker)	Tel: [phone]
Oliver Hardy (Nomad)
Heraclis Economides
Hannah Boros
Alma (Financial Public Relations)	Tel: [phone]
Justine James Hannah Campbell

Notes to Editors

Nexus is a market-leading provider of civil engineering infrastructure services to the UK housebuilding sector through its operational business, Tamdown.

Tamdown provides a range of civil engineering and infrastructure services to the UK housebuilding sectors, with operations focused on the South-East of England and London. It has an established market-leading position, having been in operation for over 45 years.

www.nexus-infrastructure.com

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[1] Relating to continuing operations for Nexus and Tamdown (excluding TriConnex and eSmart Networks).

 

END