Trading update

RNS Number : 3197M

Nexus Infrastructure PLC

27 April 2018

 

Date: 27 April 2018 

Nexus Infrastructure plc

("Nexus" or the "Group")

Trading update

Nexus Infrastructure plc (AIM:NEXS), a leading provider of essential infrastructure services to the UK housebuilding and commercial sectors, is today providing an update on trading for the six months ended 31 March 2018. The publication of the interim results will be on 30 May 2018.

For the six months ended 31 March 2018, Nexus expects to have achieved Group revenue and operating profit ahead of the performance in H1 2017.  The Group continued to secure work in the period and the order book* as at 31 March 2018 was £234.1m, a year-on-year increase of 30% and a £31.4m increase (16%) in the first half of the financial year.  The Tamdown order book increased to £118.4m (18% year on year) and the TriConnex order book increased to £115.7m (44% year on year).  The cash balance at 31 March 2018 was £14.8m.  

During the period under review, Tamdown performed in line with the Board's expectations and is expected to report an H1 2018 operating profit ahead of H1 2017 and is continuing to build on its strong market position as the leading supplier of critical infrastructure services to housebuilders and residential developers.  The Board expects the outturn for Tamdown's operating profit for 2018 to be in line with its expectations and ahead of 2017.

TriConnex performed broadly in line with the Board's expectations and is expected to report an H1 2018 operating profit marginally ahead of H1 2017.  However, although TriConnex has secured a 44% increase in order book, it is expecting revenues and operating profit for 2018 to be in line with 2017, which is below the Board's previous expectations, for the reasons set out in the paragraph below.  We expect the order book at the end of 2018 to continue to grow further based on the current pipeline opportunities.

The conversion of the TriConnex order book to revenue is now taking longer than in previous years.  TriConnex is engaged at the very early stage of developments with its customers, and often secures contracts prior to land acquisition.  These contracts generally contribute to revenue over four to five years.  Customers continue to be active, as reflected in the increase in the order book, however, schemes are taking longer to get to start on site.  The delay is a result of an increased level of pre-commencement conditions set by the local authorities and customers continuing to appoint TriConnex very early in the preconstruction stage.  This provides good longer term visibility, though it creates a medium term delay in converting the order book to revenue.

During the period Nexus has invested in an electric vehicle charging start up.  The business is called eSmart Networks, which designs and installs rapid ev charging points.  The first 20 contracts have been secured and will be delivered in H2 2018.  We expect the revenue contribution in H2 2018 to approach £1.0m and the net start up investment to be £0.6m in the current year.

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.

Commenting on the trading update Mike Morris, Chief Executive of Nexus said:

"Nexus retains a very strong market position and the timing issue we are highlighting today is being addressed.  The depth and breadth of our customer base and geographic presence coupled with our existing order book, which continues to grow, will position us for future growth.

Longer term we believe the structural undersupply of housing in the UK will continue to drive demand for the Group's critical services and the Board is therefore confident for the future."

* The order book represents signed contracts or letters of intent with the Group's customers and does not include pipeline or future phases.

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 Infrastructure is a leading provider of essential infrastructure services to the UK housebuilding and commercial sectors.  The Group comprises two separately managed and operated businesses: Tamdown, a provider of specialised infrastructure services; and TriConnex which designs, installs and connects utility networks to properties on new residential and commercial developments.

Tamdown has a well established market position having been in operation for over 40 years and currently counts amongst its customers nine 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 recognized as the UK's leading independent provider of utility connections to new developments.

 

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