TIDMNXS
19th May 2009
Nexus Management Plc
("Nexus" or "the Company")
Unaudited interim results for the six months ended 31 March 2009
Nexus Management Plc, the AIM quoted provider of specialist IT Managed
Services, is pleased to announce its interim results for the six months ended
31 March 2009.
Highlights:
* Revenue up 30 per cent to GBP2.5 million (six months to 31 March 2008: GBP1.9
million)
* Gross profit up 34 per cent to GBP1.3 million (six months to 31 March 2008: GBP
0.978 million)
* Profit before tax up 71 per cent to GBP87,000 (six months to 31 March 2008: GBP
51,000)
* Cash at bank at the period end was in excess of GBP350,000
* Total assets increased from GBP5.2 million to GBP7.3 million
* Acquisition of business and assets of Scott Technology Corporation ("STC")
by newly formed wholly-owned subsidiary Resilience Technology Corporation
("RTC")
* The Nerd Force® Franchise Company continues to expand, with franchise sales
ahead of expectations
* Revenue and profit for the period under review in line with market
expectations
Enquiries:
Nexus Management Plc
Roger Richardson, Chief Executive Tel: 01862 812 107
John East & Partners Limited, a subsidiary of Merchant Securities Plc (Nomad)
Simon Clements/David Worlidge Tel: 020 7628 2200
Rivington Street Corporate Finance (Broker)
Dru Edmonstone/Monisha Varadan Tel: 020 7562 3351
Bishopsgate Communications Ltd
Robyn Samuelson/Siobhra Murphy Tel: 020 7562 3350
nexus@bishopsgatecommunications.com
Chief Executive's Statement:
The Company has performed well during the first six months of the fiscal year.
Turnover in the period has increased by 30 per cent to GBP2.5 million (2008: GBP1.9
million) compared with the corresponding period last year. Profit before
taxation for the period was GBP87,000 (2008: GBP51,000). The results for the period
reflect two weeks of post acquisition trading of the RTC business.
I am pleased with the Company's progress in spite of challenging economic
conditions. Trading conditions remain tough in the UK, however there are recent
signs the US economy is beginning to strengthen.
The Nexus management team continues to run the core businesses on a cost
effective basis and during the period the Company has grown the number of
services offered to customers and attracted new clients.
The Company's core business in the US strengthened during the period, the
result of which has seen an increase in the number of clients using the US data
centre. Consequently, the data centre will be expanded later this year to meet
the future expected demands of the core clients and the Nerd Force franchisees.
I'm pleased to report that post the period end the US business has continued to
secure new customers which is testament to the US team and the quality of the
data centre, which is considered to be a premier facility in the area north of
Boston.
The UK business is somewhat smaller than the US business which, when coupled
with the recessionary conditions that existed during the period under review
and since the period end, has resulted in the rate of growth being slower than
management's expectations. I am pleased with the efforts of the UK management
team and believe that as the economy improves we remain well positioned for
growth.
Nexus acquired the Nerd Force® Franchise Company ("Nerd Force®" or "NFFC") late
last summer and the progress in franchise sales has been impressive during the
early part of the fiscal year. The other areas of revenue generation for Nerd
Force®, including sales of managed services, have been slower to develop in the
period under review. However, the Board in recent months has taken steps to
address this through the provision of extensive training and is encouraged by
the recent results which bode well for the remainder of 2009. Nerd Force now
has over 170 signed franchise territories globally, with 22 operational
franchises, as at the end of March.
Our associate business in Los Angeles, PD Financial Corp ("PD Financial", which
trades under the name "Venue"), in which we have a 15.5 per cent shareholding,
has also suffered from the economic slowdown and tighter credit controls in the
US. However, PD Financial has achieved encouraging levels of sales growth in
the period under review and, in the last few months, sales of our service
products through this channel have steadily increased. The future for PD
Financial as the US economy recovers remains, in my view, extremely bright.
During December 2008 Nexus converted part of the debt into equity and PD
Financial continues to service its loan interest payments to Nexus in
accordance with the terms announced previously.
On 17 March 2009, the Company acquired the businesses, assets and certain
liabilities of Scott Technology Corporation (the "STC Business"). In order to
effect the acquisition the Company established a new wholly-owned subsidiary
company called Resilience Technology Corporation ("RTC"). The Board expects
this recently formed subsidiary, the business of which develops security
infrastructure products, to generate strategic and synergistic economies of
scale across the Company's other trading activities and make a significant
contribution in the second half of the fiscal year. The newly acquired
business, through its distribution channels, has provided the Company with a
new product offering for its clients as well as cross selling opportunities.
The RTC business has already made a positive contribution to the Company's
trading performance and it is also expected to be earnings enhancing in the
year ending 30 September 2010. We are continuing to grow the RTC sales force,
which is expected to positively impact the trading results of this business in
the next six to nine months.
Nexus continues to invest in targeted marketing to identify new potential
clients that are a good fit for our services. These companies are typically
small multi-nationals or small multi office organisations where their staff
travel extensively and their IT needs are more complex.
The Board remains cautiously optimistic for the second half of the financial
year. The Company has a strong recurring revenue stream and is well positioned
to take advantage of improving economic conditions. Although a number of
markets and sectors are experiencing a challenging economic climate, the IT
industry has an advantage that the provision and management of technology and
related services remains crucial to all businesses, small and large.
Post balance sheet events
On 12 May 2009 Nexus announced that it had secured additional funding to enable
it to satisfy certain payments, together with interest and charges, due to the
vendors of the STC Business under a loan note issued pursuant to the
acquisition.
The Company also announced that Rivington Street Corporate Finance Limited had
been appointed its sole broker.
Roger Richardson
Chief Executive
Consolidated Income Statement
For the six months ended 31 March 2009
6 months to 6 months to Year to
31 March 31 March 30
September
2009 2008
2008
(unaudited) (unaudited)
(audited)
(Restated)
GBP'000 GBP'000 GBP'000
Revenue - Continuing 2,366 1,894 3,791
- Acquired 91 - 27
- Discontinued - 7,208 7,208
- Less Share of Associates - (7,208) (7,208)
2,457 1,894 3,818
Cost of sales (1,147) (915) (1,859)
Gross profit 1,310 979 1,959
Operating expenses (1,213) (913) (1,699)
Share based payment expense (21) (10) (10)
Operating profit 76 56 250
Finance income/(costs) 11 (5) 2
Impairment of goodwill - - (54)
Profit before taxation 87 51 198
Taxation - - -
Profit for the period from continuing/ 87 51 198
acquired operations
Discontinued operations
Share of profit of associates - 331 331
Profit on disposal of associates - 569 569
Profit for the period 87 951 1,098
Earnings per share (pence)
Basic 0.010p 0.113p 0.129p
Diluted 0.008p 0.087p 0.009p
Consolidated Balance sheet
As at 31 March 2009
As at As at As at
31 March 31 March 30
September
2009 2008
2008
(unaudited) (unaudited)
(audited)
(Restated)
Assets GBP'000 GBP'000 GBP'000
Non-current assets
Tangible fixed assets 365 268 316
Intangible assets 427 - 22
Goodwill 636 312 463
Available for sale investments 2,524 1,364 1,364
3,952 1,944 2,165
Current assets
Trade and other receivables 2,121 2,674 2,684
Inventories 825 - -
Cash and cash equivalents 373 377 375
3,319 3,051 3,059
Total Assets 7,271 4,995 5,224
Equity and liabilities
Equity
Share capital 2,266 2,140 2,168
Share premium 4,301 4,008 4,082
Other reserves 1,135 1,204 1,170
Retained earnings (2,894) (3,128) (2,981)
4,808 4,224 4,439
Non current liabilities
Deferred tax 178 178 178
Obligations under finance leases - due 44 - 43
after one year
222 178 221
Current liabilities
Trade and other payables 2,086 504 512
Bank overdrafts and loans 58 4 3
Obligations under finance leases - due 97 85 49
within one year
2,241 593 564
Total equity and liabilities 7,271 4,995 5,224
Consolidated Cash Flow Statement
For the six months ended 31 March 2009
6 months to 6 months to Year to
31 March 31 March 30
September
2009 2008
2008
(unaudited) (unaudited)
(audited)
GBP'000 (Restated)
GBP'000
GBP'000
Cash inflow from operating activities
Profit from operations 87 51 198
Adjustments for:
Interest paid 1 6 16
Interest received (12) - (18)
Depreciation 71 40 86
Impairment - - 54
Currency exchange adjustment (93) 27 (48)
54 124 288
Share option costs 21 10 10
Increase in inventories (825) - -
Increase in receivables (396) (17) (187)
Decrease/(Increase) in liabilities 1,691 (206) (219)
Cash generated from/(used in) operations 545 (89) (108)
Interest paid - (5) (16)
Net cash generated from/(used in) 545 (94) (124)
operating activities
Cash flows from investing activities
Interest received 12 - 18
Acquisition of intangible (406) - (21)
Acquisition of goodwill (173) - (103)
Acquisition of investments (202) - -
Purchase of shares in associate - (76) (76)
Purchase of plant and equipment (4) (85) (110)
Net cash used in investing activities (773) (161) (292)
Cash flows from financing activities
Proceeds from issue of share capital 60 - -
Premium on issue 140 - -
Share issue cost - - -
Repayment of borrowings 55 (2) (4)
Finance lease principle payments (29) - (1)
Net cash generated from/(used in) 226 (2) (5)
financing activities
Net cash used in continuing operations (2) (257) (421)
Discontinued Operations
Net cash from investing activities - 150 312
Netdecrease in cash and cash equivalents (2) (107) (109)
Cash and cash equivalents at beginning 375 484 484
of period
Cash and cash equivalents at end of 373 377 375
period
Consolidated Statement of changes in equity
For the six months ended 31 March 2009
Share Share Available Foreign Share Retained Total
capital premium for sale exchange options earnings
investment reserve
reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
6 months ended 31
March 2008 (Restated)
As at 1 October 2007 2,127 3,956 - 3 802 (4,079) 2,809
Profit for the period - - - - - 951 951
Shares issued 13 52 - - - - 65
Share based payment - - - 10 - 10
charge
Movement in the year - - 415 - - - 415
Exchange differences - - - (26) - - (26)
arising on translation
of foreign operations
As at 31 March 2008 2,140 4,008 415 (23) 812 (3,128) 4,224
12 months ended 30
September 2008
As at 1 October 2007 2,127 3,956 - 3 802 (4,079) 2,809
Profit for the period - - - - - 1,098 1098
Movement in the year - - 417 (62) - - 355
Shares issued 41 126 - - - - 167
Share based payment - - - - 10 - 10
charge
As at 30 September 2,168 4,082 417 (59) 812 (2,981) 4,439
2008
6 months ended 31
March 2009
As at 1 October 2008 2,168 4,082 417 (59) 812 (2,981) 4,439
Profit for the period - - - - - 87 87
Movement in the period - - - (56) - - (56)
Shares issued 98 218 - - - - 316
Share based payment - - - - 21 - 21
charge
As at 31 March 2009 2,266 4,300 417 (115) 833 (2,894) 4,807
Notes to the Interim Results
1. Basis of preparation
The Interim Results for the six months ended 31 March 2009 are unaudited and do
not constitute statutory accounts in accordance with section 240 of the
Companies Act 1985.
Full accounts for the year ended 30 September 2008, on which the auditors gave
an unqualified report and contained no statement under Section 237 (2) or (3)
of the Companies Act 1985, have been delivered to the Registrar of Companies.
2. Adoption of International Financial Reporting Standards (IFRS)
The AIM Rules require that the annual consolidated financial statements of
Nexus Management plc for the year ended 30 September 2008 be prepared in
accordance with International Financial Reporting Standards (IFRS).
The information presented within these interim financial statements is in
compliance with IAS 34 `Interim Financial Reporting'.
3. Segmental information
The services the group provides are in regard to one activity. Accordingly the
primary segmental disclosure is based on geographical location and excludes
revenue in regard to the group's associate.
UK US Eliminations Total
GBP'000 GBP'000 GBP'000 GBP'000
6 months ended 31 March 2009
Segmental revenue - continuing 813 1,761 (117) 2,457
Segmental result 39 37 - 76
6 months ended 31 March 2008
restated
Segmental revenue - continuing 677 1,217 - 1,894
Segmental result (66) 122 - 56
12 months ended 30 September
2008
Segmental revenue - continuing 1,788 2,345 (315) 3,818
Segmental result 47 203 250
4. Earnings per share
The basic earnings per share has been calculated by dividing the retained
profit for the period of GBP86,670 (2008: GBP951,000) by the weighted average
number of ordinary shares of 876,107,063 (2008: 841,576,236) in issue during
the period. The diluted earnings per share is calculated by using the diluted
weighted average number of ordinary shares of 1,132,607,678 (2008:
1,095,142,704).
5. Dividends
No dividend is proposed for the six months ended 31 March 2009.
6. Copies of Interim Results
Copies of the Interim Results will be available on the Nexus website, Investor
Section - www.nexusmgmt.com
END
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