This announcement contains inside
information as stipulated under the UK version of the Market Abuse
Regulation No 596/2014 which is part of English Law by virtue of
the European (Withdrawal) Act 2018, as amended. On publication of
this announcement via a Regulatory Information Service, this
information is considered to be in the public
domain.
30 October 2024
Nexus Infrastructure
plc
("Nexus" or the
"Group")
Acquisition of Coleman Construction
& Utilities
and
FY24 Trading Update
Diversification expands sectors
critical to the UK's national infrastructure
Nexus (AIM: NEXS), a
leading provider of essential infrastructure solutions, announces the acquisition of Coleman Construction &
Utilities Limited ('Coleman'), a civil engineering &
construction business with experience in several key sectors
including water, rail, highways, and rivers & marine, for a
total consideration of up to £5.38m.
The Group also provides an update on
trading for the year ended 30 September 2024 (FY24), which is in
line with market expectations*.
Acquisition highlights
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Acquisition aligns with Nexus'
strategic objective of diversifying into additional key sectors,
critical to UK infrastructure.
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Coleman, headquartered in East
Sussex and operational across Southeast England, has extensive
experience in several sectors including water, rail, highways and
rivers & marine.
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Since its foundation in 2000, the
business has grown based on a reputation for quality of service and
customer satisfaction.
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Nexus will support Coleman in
enhancing and expanding its operations.
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The consideration
comprises initial cash consideration of £3.08m on a cash
and debt free basis, plus a further amount
of c.£1.00m, which is subject to finalising completion
accounts, in respect of net cash and cash like items
in Coleman at the date of completion. In
addition, deferred cash consideration
payments will be payable in year one and year two
of up to a maximum aggregate of £1.30m subject
to future business performance, a total aggregate
consideration of up to £5.38m. Excluding the net
cash and cash like items, the total net consideration
including the maximum deferred consideration would be
£4.38m.
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The acquisition is expected to be
immediately earnings enhancing.
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Acquisition overview and rationale
The acquisition represents a
compelling strategic fit for Nexus, entering new sectors and
bringing highly complementary services to the Group.
Expanding the Group's market through
diversification is a key pillar of Nexus' strategy and the
acquisition of Coleman provides future growth opportunities outside
of the Group's current core sector of residential housebuilding.
Coleman offers services in sectors which are critical to the UK's
national infrastructure, driven by climate change, environment
protection, shifts in societal needs, and improvements to energy
security. These sectors have multi-decade horizons and are less
prone to short-term economic pressures.
About Coleman
Coleman delivers civil engineering
and building projects in the water, rail, highways and rivers &
marine sectors. Coleman Rail (a division of Coleman) has an
extensive background of safety critical civil engineering and
building work in the rail industry.
Coleman has flexible project
solutions, to cover both minor works and larger multi-million-pound
contracts. Many of its projects are part of five-year frameworks,
such as the AMPs** programmes in the water sector (the Asset
Management Period, which is the regulatory framework used by Ofwat,
typically a five-year period, giving greater visibility of future
earnings).
Coleman Rail has an extensive record
of safety critical civil engineering and building work in the rail
industry. Its rail teams have the sector-specific qualifications
and experience which are absolute requirements to work in the
sector.
Established in 2000 by Barry
Coleman, the business has grown into a leading UK construction
group through its exemplary reputation for high quality builds and
reliable service delivery.
Over the years, Coleman has
consistently achieved revenue growth while maintaining stable gross
profit and EBITDA margins. For the year ended 31 March 2024,
Coleman reported revenues of £8.3m and Adjusted EBITDA of £0.7m. As
at 31 March 2024 Coleman's net assets were £2.3m
Charles
Sweeney, Chief Executive of Nexus, commented:
"The acquisition of Coleman
presents an exciting opportunity for Nexus, diversifying into other
critical sectors of UK infrastructure, enhancing our service
offerings and driving future growth. This move enables the Group to
benefit from long-term opportunities that are less vulnerable to
short-term economic fluctuations. Coleman's established reputation
and expertise in water, rail, highways and
rivers & marine sectors further strengthens our
portfolio and we look forward to welcoming the Coleman team to
Nexus."
Barry Coleman,
Co-Founder and Managing Director of Coleman
commented: "Coleman has grown significantly over
the years to become a leading civil engineering and construction
business. Throughout this journey, we have remained committed to
the highest standards in health and safety, quality, and customer
satisfaction and our success is a testament to our exceptional
team. Now with the support of Nexus, we are poised to further
develop our business, creating new opportunities that will benefit
our customers and everyone at Coleman. We look forward to
collaborating with Charles and the Nexus team as we embark on the
next phase of our journey."
FY24 trading update
The Group expects to report revenue
of £56.7m for the year ended 30 September 2024, in line with market
expectations.
As at 30 September 2024, Tamdown's order book
was £51.5m, (FY23: £46.0m), a 23% increase on FY23. The H1 position
of £72m was reflective of the housebuilding sector overall which
showed early signs of improvement in the first half of the year,
but those positive indications were not sustained in H2. Post
period end Tamdown has been awarded new work with a total
value of £15.9m.
The Group remains confident that the
housebuilding sector will see a significant recovery. With
improving economic indicators and the recently expressed strong
political support to address the UK's chronic long-term undersupply
of housing, the foundations are in place for a future period of
sustained market growth.
Nexus continues to review opportunities in
other key national infrastructure sectors and the post-period end
acquisition of Coleman Construction & Utilities Limited
announced today provides an excellent opportunity for the Group to
have activities in several other key sectors including water, rail,
highways and rivers & marine.
Nexus had a robust balance sheet with cash and
cash equivalents of £12.8m at the FY24 year end and the balance
sheet remains strong after taking into account the cash
consideration due pursuant to the Coleman acquisition and the Board
expects to pay a final dividend in line with FY23.
Commenting on
FY24 trading, CEO Charles Sweeney said: "I am very pleased with the progress we
have made against our strategic plan. During the year, Tamdown
continued to focus on operating discipline and the management of
costs whilst delivering a high-quality service to its clients. The
team's hard work and innovative thinking has further improved
productivity in spite of the challenging market conditions. The
business is very well placed to benefit from the widely anticipated
upturn in the housebuilding sector.
"Diversification is a principal element of Nexus' strategy,
and the acquisition of Coleman provides future growth opportunities
outside of the Group's current core sector of residential
housebuilding. Coleman offers services in sectors which are
critical to the UK's national infrastructure, driven by climate
change, environment protection, shifts in societal needs, and
improvements to energy security. It's great to welcome Coleman to
the Group and we look forward to working with Barry Coleman and all
the Coleman team."
*The Company considers that the FY24 market forecasts for
Revenue is £55.9m, and PBT loss of £2.7m.
**An Asset Management Period (AMP) is a is a five-year
regulatory cycle set by Ofwat to increase efficiencies in the water
sector in England and Wales. In March 2025 AMP 7 will
conclude and AMP 8 will begin, the eighth cycle of this regulatory
framework, which runs from April 2025 to 2030. It sets out the
financial and operational expectations for water companies across
England and Wales.
Cautionary
Statement
This announcement contains forward
looking statements which are made in good faith based on the
current information available. It is believed that the expectations
reflected in these statements are reasonable but they may be
affected by a number of risks and uncertainties that are inherent
in any forward looking statement which could cause actual results
to differ materially from those currently anticipated. Nothing in
this document should be regarded as a profits
forecast.
Enquiries
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Nexus
Infrastructure plc
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Via Alma
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Charles Sweeney, Chief Executive
Officer
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Dawn Hillman, Chief Financial
Officer
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Zeus (Nominated Adviser and Sole Broker)
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Tel + 44 (0) 20 3829 5000
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Hugh Morgan, James Hornigold
(Investment Banking)
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Dominic King (Corporate
Broking)
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Alma Strategic
Communications
(Financial Public Relations)
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Tel: 0203 405 0205
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Justine James
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Hannah Campbell
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Will Merison
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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