TIDMNXS
10 May 2010
Nexus Management Plc
("Nexus" or "the Company")
Unaudited interim results for the six months ended 31 March 2010
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 2010.
Highlights:
* Revenue up 26.5 per cent to GBP3.1 million (2009: GBP2.5 million)
* Gross profit up 24 per cent to GBP1.6 million (2009: GBP1.3 million)
* Return to profitability after operating expenses
* Cash at bank at the period end was in excess of GBP350,000
* Total Net Assets increased since year end from GBP0.5 million to GBP0.7 million
* Turnaround in performance by wholly owned subsidiary Resilience Technology
Corporation ("Resilience")
* Revenues and profit for the period under review in line with management
expectations
Commenting on the results Roger Richardson, CEO of Nexus Management, said: "We
are pleased to have returned to profitability after operating expenses in the
first half of this year. Since January 2010 we have seen some improvement,
albeit small, in trading conditions in the United States and we believe that
this will continue into the second half of the year.
"We are particularly pleased with the recent performance of Resilience, which
has won a number of significant contracts in the period under review.
"Our main focus is to build on this encouraging start and return the Company to
profitability for the full year. We have a strong recurring revenue stream and
we are well positioned to take advantage of any improvement in economic
conditions."
Enquiries:
Nexus Management Plc
Roger Richardson, Chief Executive Tel: +44 (0)1862 812 107
Merchant John East Securities Ltd (Nomad)
Simon Clements/David Worlidge Tel: +44 (0)20 7628 2200
Daniel Stewart & Company plc (Broker)
Christopher Theis Tel: +44 (0)20 7776 6550
Bishopsgate Communications Ltd
Gemma O'Hara/Siobhra Murphy Tel: +44 (0)20 7562 3350
nexus@bishopsgatecommunications.com
Chief Executive's Statement
Overview
The Company has performed well during the first six months of this financial
year. Turnover in the period under review has increased by 26.5 per cent to GBP
3.1 million (2009: GBP2.5 million) compared with the corresponding period last
year. I am pleased to report that the management team has met the key milestone
set for the first half of the year in returning the Company to profitability,
after operating expenses, following a challenging financial year in 2009.
Trading
The Company's core business in the US has consolidated its position during the
period and it has seen a modest increase in the number of clients using the US
data centre.
In February 2010, Nexus entered into a wholesale partnership with GWI, a
provider of high-speed internet access, server co-location and phone services,
based in Maine, USA. A contract was also signed with GWI to monitor and assist
in supporting GWI's state-wide voice and data network.
The partnership with GWI has also allowed us to offer managed services to both
GWI and Nexus customers at very high network speeds.
During the period under review the Company was also awarded the contract to
supply outsourced IT services to Promotion Space Limited, one of the UK's
leading commercialisation specialists. The UK management team has been working
extremely hard over the past six months in a very difficult economic climate
and I am pleased with the progress that has been made. We continue to be well
placed to take advantage of the opportunities that arise, as we see
improvements in the economy.
Resilience underwent a significant turnaround in performance during the period
under review. Resilience contributed significant revenues for the six months
ended 28 February 2010 and we still anticipate that the acquisition of
Resilience will be earnings enhancing for the year ended 30 September 2010.
During the period under review Resilience received a number of important new
orders from customers including NASA, one of North America's largest
telecommunications providers, one of Canada's largest retailers and a leading
Caribbean banking institution. These orders are an endorsement from some of the
World's premier companies of Resilience's leading applications in their
particular area of network security.
The Company raised GBP375,000 (as announced on 18 March, 2010), before expenses,
through the issue of convertible loan notes to the SF T1PS Smaller Companies
Growth Fund. The proceeds of the issue, as well as providing further working
capital for the Company, were to reduce the level of indebtedness in the
Resilience business and to redeem certain debts which carried a higher rate of
interest than the Loan Notes. Additionally, funds raised will support the
marketing of Nerd Force in the UK and US, and the development efforts in
Resilience.
Outlook
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's and Management's main focus, as well as increasing shareholder
value, is to deliver earnings in-line with or ahead of market expectations. 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
the advantage that the provision and management of technology and related
services remains crucial to all businesses, small and large.
Roger Richardson
Chief Executive
Consolidated Income Statement
For the six months ended 31 March 2010
6 months to 6 months to Year to
31 March 31 March 30 September
2010 2009 2009
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Revenue - Continuing 3,108 2,366 4,499
- Acquired - 91 978
3,108 2,457 5,477
Cost of sales (1,485) (1,147) (2,540)
Gross profit 1,623 1,310 2,937
Operating expenses (1,620) (1,213) (3,952)
Profit/(loss) after operating expenses 3 97 (1,015)
Amortisation of intangible assets (56) - (64)
Foreign exchange adjustment - - 557
Share based payment expense (27) (21) (78)
Operating (loss)/profit (80) 76 (600)
Impairment of available for sale assets - - (2,285)
Provision for bad debts - - (1,420)
Finance (costs)/income (112) 11 (249)
Impairment of goodwill - - (3)
(Loss)/Profit before taxation (192) 87 (4,557)
Taxation - - -
(Loss)/Profit for the period from (192) 87 (4,557)
continuing/acquired operations
Discontinued operations
Share of profit of associates - - -
Profit on disposal of associates - - -
(Loss)/Profit for the period (192) 87 (4,557)
(Loss)/Earnings per share (pence)
Basic (0.0002)p 0.010p (0.504)p
Diluted (0.0002)p 0.008p (0.504)p
Consolidated Balance sheet
As at 31 March 2010
As at As at As at
31 March 31 March 30 September
2010 2009 2009
(unaudited) (unaudited) (audited)
Assets GBP'000 GBP'000 GBP'000
Non-current assets
Tangible fixed assets 364 365 388
Intangible assets 1,029 427 1,027
Goodwill 1,252 636 1,082
Available for sale investments - 2,524 -
2,645 3,952 2,497
Current assets
Trade and other receivables 689 2,121 512
Inventories 490 825 491
Cash and cash equivalents 383 373 164
1,562 3,319 1,167
Total Assets 4,207 7,271 3,664
Liabilities
Current liabilities
Trade and other payables 2,201 2,086 1,852
Bank overdrafts and loans 500 58 318
Obligations under finance leases - due 62 97 79
within one year
2,763 2,241 2,249
Non current liabilities
Provisions for liabilities and charges 158 - 173
Trade and other payables 49 - 61
Loans and other borrowings 432 - 582
Deferred tax - 178 -
Obligations under finance leases - due 65 44 81
after one year
704 222 897
Total liabilities 3,467 2,463 3,146
Total assets less liabilities 740 4,808 518
Equity
Share capital 2,713 2,266 2,450
Share premium 5,015 4,301 4,803
Other reserves 742 1,135 803
Retained earnings (7,730) (2,894) (7,538)
Total equity 740 4,808 518
Consolidated Cash Flow Statement
For the six months ended 31 March 2010
6 months to 6 months to Year to
31 March 31 March 30 September
2010 2009 2009
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Cash inflow from operating activities
(Loss)/Profit from operations (192) 87 (4,557)
Adjustments for:
Interest paid 111 1 168
Interest received - (12) (34)
Depreciation 63 71 136
Impairment - - 3
Amortisation of customer list 56 - 64
Impairment of available for sale assets - - 2,285
Provision for bad debts - - 1,420
Currency exchange adjustment (201) (93) (738)
(163) 54 (1,253)
Share option costs 27 21 78
Decrease/(Increase) in inventories 1 (825) (491)
Increase in receivables (180) (396) (75)
(Increase)/Decrease in provisions for (16) - 173
liabilities and charges
Increase in liabilities 392 1,691 1,556
Cash generated from/(used in) operations 61 545 (12)
Interest paid (111) - (168)
Net cash (used in)/generated from (50) 545 (180)
operating activities
Cash flows from investing activities
Interest received - 12 34
Acquisition of intangible - (406) (1,064)
Acquisition of goodwill (124) (173) (593)
Acquisition of investments - (202) -
Purchase of plant and equipment (21) (4) (67)
Net cash used in investing activities (145) (773) (1,690)
Cash flows from financing activities
Proceeds from issue of share capital - 60 229
Premium on issue - 140 646
Share issue cost - - (54)
Increase in borrowings 455 55 909
Finance lease principle payments (41) (29) (71)
Net cash generated from financing 414 226 1,659
activities
Net cash generated from/(used in) 219 (2) (211)
continuing operations
Netincrease/(decrease)in cash and cash 219 (2) (211)
equivalents
Cash and cash equivalents at beginning 164 375 375
of period
Cash and cash equivalents at end of 383 373 164
period
Consolidated Statement of changes in equity
For the six months ended 31 March 2010
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 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 - - - (56) - - (56)
period
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
12 months ended 30
September 2009
As at 1 October 2008 2,168 4,082 417 (59) 812 (2,981) 4,439
Loss for the period - - - - - (4,557) (4,557)
Movement in the year - - (417) (28) - - (445)
Shares issued 282 775 - - - - 1,057
Share issue costs - (54) - - - - (54)
Share based payment - - - - 78 - 78
charge
As at 30 September 2,450 4,803 - (87) 890 (7,538) 518
2009
6 months ended 31
March 2010
As at 1 October 2009 2,450 4,803 - (87) 890 (7,538) 518
Loss for the period - - - - - (192) (192)
Movement in the - - - (88) - - (88)
period
Shares issued 263 212 - - - - 475
Share based payment - - - - 27 - 27
charge
As at 31 March 2010 2,713 5,015 - (175) 917 (7,730) 740
Notes to the Interim Results
1. Basis of preparation
The Interim Results for the six months ended 31 March 2010 have been prepared
in accordance with EU Endorsed International Financial Reporting Standards and
IFRIC Interpretations (IFRS). The Interim Results are unaudited and do not
constitute statutory accounts in accordance with section 435 of the Companies
Act 2006.
Full accounts for the year ended 30 September 2009, on which the auditors gave
an unqualified report and contained no statement under Section 498 (2) or (3)
of the Companies Act 2006, have been delivered to the Registrar of Companies.
2. 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 2010
Segmental revenue - continuing 743 2,501 (136) 3,108
Segmental result (14) (66) - (80)
6 months ended 31 March 2009
Segmental revenue - continuing 813 1,761 (117) 2,457
Segmental result 39 37 - 76
12 months ended 30 September
2009
Segmental revenue - continuing 1,594 4,131 (249) 5,476
Segmental result 470 (1,070) - (600)
3. Earnings per share
The basic earnings per share has been calculated by dividing the retained loss
for the period of GBP191,764 (2009: profit of GBP86,670) by the weighted average
number of ordinary shares of 1,019,544,992 (2009: 876,107,063) in issue during
the period. For 2009, the diluted earnings per share is calculated by using
the diluted weighted average number of ordinary shares of 1,132,607,678.
4. Dividends
No dividend is proposed for the six months ended 31 March 2010.
5. 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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