REG - Nexteq PLC - Audited Final Results
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RNS Number : 0450X Nexteq PLC 18 March 2026
The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.
18 March 2026
Nexteq plc
("Nexteq" or the "Group")
Audited Final Results
Performance in line, significant reorganisation to deliver three-year plan
Nexteq (AIM: NXQ), a leading technology solutions provider to customers in
selected industrial markets, is pleased to announce its audited full year
results for the 12 months ended 31 December 2025.
Year ended Year ended Change
31 December 2025 31 December 2024
Group Revenue $90.2m $86.7m 4%
Quixant Revenue $60.1m $54.8m 10%
Densitron Revenue $30.1m $31.9m (6%)
Gross margin 32.8% 35.9% (310 bps)
Adjusted profit before tax(1) $3.6m $4.8m (25%)
Adjusted EBITDA(1) $6.2m $5.9m 4%
Group profit before tax $3.2m $1.7m 88%
Adjusted diluted earnings per share(1) 3.63c 5.08c (29%)
Diluted earnings per share 3.14c 0.48c 554%
Operating cashflow $3.5m $13.0m (73%)
Net cash(2) $25.0m $29.1m (14%)
(1)Adjusted for amortisation of customer relationships, technology and order
backlog, share based payments, and revaluation of investment property. For
further details refer to note 1 and note 5 of the condensed consolidated
financial statements.
(2)Net cash is a non-GAAP measure of cash inflows from operations less cash
tax paid
FINANCIAL HIGHLIGHTS
· Group revenue increased 4% driven by demand from our Quixant gaming customers.
o Quixant revenues increased 10%, with gaming hardware platform volumes
increasing in the year with greater diversification of revenues across the
customer base.
o Densitron revenues down 6%, with softer demand across all industrial
sectors.
· Gross margin reduced by 310bps to 32.8%, despite a record gross margin % for
Densitron.
o Quixant margin impacted by changes in customer and product mix, alongside
component price increases from the surge in memory pricing eroding margin %.
o Densitron delivered its highest ever gross margin % driven by strong
new business wins from its strategy to deliver fully integrated solutions
beyond displays.
· Adjusted profit before tax reduced 25% to $3.6m (2024: $4.8m), an Adjusted PBT
margin of 4.0% (2024: 5.5%).
· Reported profit before tax increased 88% to $3.2m (2024: $1.7m), with a
Reported PBT margin up to 3.5% (2024: 2.0%), reflecting lower adjusting items
despite memory pricing pressures and a $0.7m development cost write-off.
· Operating cash conversion remained above 100%, with net cash of $25.0m (2024:
$29.1m) after $3.6m returned to shareholders and $4.0m of capital investment.
· Dividend of 3.9p per share proposed (2024: 3.7p per share) reflecting
confidence in the long-term prospects of the business and strong cash
generation.
OPERATIONAL HIGHLIGHTS
Product innovation and launches
· Prodeck won awards at two shows in 2025, with key third party software
integrations added.
· Launchpad gaming software platform showcased at G2E.
· IQON3, our latest gaming computer based on DDR-5 memory launched at G2E.
· Tactila progressing towards mass production phase with pre-mass production
units shipped from Taiwan.
Customer delivery and market engagement
· Successfully delivered Quixant cabinets which went live in UK casino venues
and Scandinavian cruise ships.
· Increased the number of $1m customers to 14 (2024: 10), delivering better
revenue diversification.
Supply chain and cost management
· Executed strategic buys of key components in H2 2025 to ensure supply and
minimise the impact of sharply increasing prices in the memory market for
DDR-4.
CURRENT TRADING OUTLOOK
· In the Gaming market vertical, the acquisition of the Group's historically
largest customer has led to a reduced revenue expectation in the Quixant
brand, but we are generating significant interest in Launchpad and IQON-3
following ICE trade show in January, with first Launchpad customer purchase
order received and secured GLi evaluated platform foundation for Launchpad. A
continued focus on new product development will see new products launched
throughout 2026.
· The impact of component shortages and subsequent cost increases is yet to be
fully seen, but this along with the consequences of tariffs and accelerating
geopolitical conflict is creating customer uncertainty, and a reluctance for
end users to commit to capital expenditure. Nexteq has however committed to
further strategic buys of DDR-4 and DDR-5 to counter increasing market prices
and extended delivery times.
· Industrial display market verticals offer Nexteq a significant growth
opportunity as we focus on full system display delivery
· Strong balance sheet with a significant net cash position, and with continuing
good operating cash generation, positioning the Group for future organic and
acquisitive growth.
· Post period, the Company completed the acquisition of a new office in Taipei,
Taiwan for total consideration of $15.5m, funded in part through a $12.2m
mortgage facility, and has entered into an agreement to sell its existing
Taipei property for $3.7m.
Duncan Faithfull, Chief Executive Officer of Nexteq plc, commented:
"Nexteq is now in the second phase of the growth plan, as presented at the
Capital Markets Day in February 2025. We achieved our financial commitments
in 2025, despite the decline in volume from our historically biggest gaming
customer being steeper than previously anticipated, following its acquisition.
As with the recent post pandemic years, the trading environment remained
complicated, with the potential tariffs and global geopolitical uncertainty
impacting customers' confidence.
Against this backdrop, we have been proactive in managing both the
availability and rising cost of DDR4 memory, a key component of our gaming
hardware platforms. These dynamics emerged through the second half of 2025 and
continue into 2026 as AI-driven demand absorbs supplier capacity. Building on
Nexteq's strong track record of navigating supply chain disruption, we have
taken decisive mitigating actions, including qualifying alternative supply
options, running a structured customer testing and validation programme for
alternative DDR4 sources, and implementing price actions to reflect higher
manufacturing costs and protect gross margins. We continue to monitor this
into 2026.
Throughout 2025, we remained focused in progressing our technology 'building
blocks' essential for pipeline and revenue growth, with the commitment to
innovation, and momentum from the successful product launches of Launchpad,
IQON3 and display solutions development. Trade shows early in 2026 have built
pipeline opportunities for our innovations, resulting in our first order for
Launchpad software licenses, with further customer win news flow expected.
It is a true honour to lead, and work with such a talented, committed and
energetic group of people. They are a constant source of inspiration, and we
are confident that Nexteq, with its OneNexteq agenda, will go from strength to
strength as our new products and solutions progress our revenue
diversification and growth potential."
Carol Thompson, Non-Executive Chair of Nexteq plc, commented:
"During 2025, we made significant progress laying the groundwork to position
Nexteq for long-term success. While we are not immune to the market-wide
headwinds that many businesses are navigating, whether from tariffs and trade
policy, memory and storage availability and costs, or broader geopolitical
uncertainty, we have a strong track record of managing our supply chain and
steering through challenges. We retain our conviction in the growth potential
of this business, and remain positive about the mid to long term future of
Nexteq."
Investor Presentation
Nexteq is hosting an online presentation open to all investors today via
Investor Meet Company at 10.00am. Anyone wishing to join the session should
register here:
https://www.investormeetcompany.com/nexteq-plc/register-investor
(https://www.investormeetcompany.com/nexteq-plc/register-investor)
(1) The consensus forecasts for the year ended 31 December 2025 are $85.5m
revenue, $6.0m adjusted EBITDA and $3.6m adjusted profit before tax.
Nexteq plc Tel: +44 (0)1223 892 696
Carol Thompson, Non-Executive Chair
Duncan Faithfull, Chief Executive Officer
Matt Staight, Chief Financial Officer
Nominated Adviser and Broker: Tel: +44 (0) 20 7220 0500
Cavendish Capital Markets Ltd
Matt Goode / Teddy Whiley / Andrea Callaghan (Corporate Finance)
Harriet Ward (ECM)
Financial PR: Tel: +44 (0)20 3405 0205
Alma Strategic Communications
Hilary Buchanan / Emma Thompson
About Nexteq
Nexteq (AIM: NXQ) is a strategic technology solutions provider to customers in
selected industrial markets. Its innovative technology enables the
manufacturers of global electronic equipment to outsource the design,
development and supply of non-core aspects of their product offering. By
outsourcing elements of their technology stack to Nexteq, customers can focus
their product development effort on the most critical drivers of their
business' success.
Our solutions are delivered through a global sales team and leverage the
Group's electronic hardware, software, display and mechanical engineering
expertise. Our Taiwan operation is at the heart of Asian supply networks and
facilitates cost effective manufacturing and strategic supply chain
management.
The Group operates in six countries and services over 500 customers across 47
countries.
Nexteq operates two distinct brands: Quixant, a specialised computer platforms
provider, and Densitron, leaders in human machine interface technology, each
with dedicated sales, account management and product innovation teams. Founded
in 2005, and later floating on the London Stock Exchange's AIM stock market as
Quixant plc, the Group rebranded to Nexteq in 2023.
Further information on Nexteq and its divisions can be found at
www.nexteqplc.com.
CHAIR'S STATEMENT
My introduction to Nexteq was as Non-Executive Director three years ago. It
was a privilege to be asked to become Chair during 2025 and have an
opportunity to shape the future of the business, working with its very
talented and engaging senior team to take advantage of the opportunities
emerging from new technology innovations and territories, and refreshed
strategy to reach wider audiences.
Nexteq is a diverse, ambitious and creative company, evolving confidently at
pace in a global economic environment, which continues to be uncertain with
well-documented headwinds impacting most technology-organisations.
Assisting and supporting the Nexteq Executive management team in delivering
the commitments made in the three-year plan continues to be a balanced mixture
of challenging, fascinating and rewarding. Quixant and Densitron serving our
vertical markets through fit-for-purpose platforms that enable customers to
focus on the user experience and delight their end users. The key to
delivering our growth remains in the focus of developing new technology, and
in delighting our customers through our innovation, supply chain excellence
and our expert, dedicated and energetic team.
Review of 2025
2024 was a year of significant change within the organisation, therefore it
was important in 2025 that the business settled into new leadership and was
given new, clear and measurable goals to coalesce around multiple
deliverables, with one mission.
In February 2025, the Group held a Capital Markets Day (CMD) to unveil a set
of objectives designed to ensure the Group focussed on creating exciting new
technology to drive growth in challenging market conditions, across our
verticals. Progress has been made against these objectives despite the
'headwinds' in our markets around the impact of tariffs; continuing component
shortages and cost increases, and the significant impact of our historically
largest customer being acquired in 2025.
To have delivered revenue growth in a year in the midst of such external
forces, demonstrates the resilience of the Group and the entire Nexteq team.
Historically, revenue concentration in a single major customer meant that a
rapid reduction in that business could have created meaningful short-term
disruption and risked slowing our investment and growth plans. Instead, we
responded by using the change as a catalyst to sharpen our strategy,
accelerate new thinking, and translate insight into new products and
commercial wins. The team have demonstrated resilience and creativity, which
is the bedrock of a flexible and robust team focused on execution and
sustainable growth.
The business delivered its revenue and adjusted PBT commitments, alongside
delivering positive operating cashflow, ending the year with $25.0m net cash
(2024: $29.1m),after returns to shareholders through its dividends of $3.0m
and $0.6m via our share buyback programme. The Group moves into 2026 with
exciting new products launching and a growing customer opportunity pipeline of
new Nexteq IP based solutions.
Headwinds continue, but new products bring optimism
At the CMD in February 2025, the Group outlined its 'signposts to success',
and its objective to hit $108m revenue, gross margins of 35%-38% and adjusted
EBITDA margins of 10%-15% by the end of 2027. Subsequent material news
regarding the acquisition of the Group's historically largest customer, led to
the market announcement in December 2025 outlining the impact on 2026
performance and on the timing of the three-year plan outcome, with the
financial objectives now targeted for 2028.
The Executive leadership team is resolute that the business is making informed
and high-quality decisions and will continue to focus on what is within its
control, with a clear focus on delivering new technology innovation.
In October 2025, Launchpad™ - our software platform for land-based gaming -
was introduced at G2E in the US. The Launchpad platform enables customers to
accelerate time-to-market in regulated jurisdictions while focusing internal
effort on content and player experience. The platform was officially unveiled
to the wider market at ICE Barcelona in January 2026. Whilst delivering the
essential differentiators to our customers, this software innovation allows us
to generate software recurring revenue opportunities alongside the repeatable
model of the gaming computers. The latest computer offerings of the IQON 3 and
the IQON Air 3, bring true innovation and the latest technology to our
customers, incorporating the latest DDR5 memory solution. The opportunity
pipeline for Launchpad is developing, and we secured our first customer in
February 2026 for this new software based revenue.
Equally exciting is the continuing development of Densitron's unique Tactila
HMI solution, alongside the award winning ProDeck, providing Densitron's
customers truly innovative, differentiated display, touch and tactile
solutions. Throughout 2026 the growing customer base adopting Tactila will be
on-boarded and is expected to contribute to Group revenue, as longer
integration cycles complete.
With this as a backdrop you will see acceleration of our plans around
targeting new market verticals with our 'OneNexteq' range of technologies and
solutions, where we combine our embedded computing and HMI technologies to
create new solutions for our customers. The thought leadership, and
engineering capability in Nexteq is a truly inspirational combination, and
will continuously drive the development of our product roadmaps.
We will continue to target M&A activity to accelerate capability
development, market expertise, and revenue growth, but will do so in a
structured way, and will be rightly demanding in what M&A opportunities
can bring. Whilst the 'headwinds' will impact revenue and margin in 2026, the
potential for exceptional growth in 2027 and beyond is clearly in sight.
Sustainable growth
Our commitment to long-term, sustainable value creation remains a central
component of our evolution. In addition to being Carbon Neutral in 2025, the
Group continues to make progress towards its target of achieving Net Zero
emissions by 2050. The work completed against the five UN Sustainability
Development Goals (SDGs) identified for the Group includes expanding
apprenticeships and continuing our contribution to carbon reduction
initiatives.
Dividend and share buyback programme
The Board has agreed to maintain the existing progressive dividend policy as
this is supported by the healthy operating cash flow and strong cash balance.
This strength enables us to fund investment and strategic change while
continuing to return value to shareholders - a position that is a rare
privilege for AIM-listed companies in the current environment.
As a result, the Board considers it appropriate to recommend a full-year
dividend of 3.9p per share (2024: 3.7 per share).
The Group's original share buyback programme, launched in H2 of 2024, returned
$0.6m of cash to shareholders during 2025 (the balance of the total $7.6m
bought back since 2024) with 100% of the approved buybacks having been
completed by the first half of 2025. A subsequent share buyback programme was
launched at the end of 2025, which has resulted in buybacks in early 2026. On
expiry of the current buyback programme, the Board intends to seek a new
authority at the AGM for a further buyback programme. It is intended that the
further buyback programme would be used selectively, if approved.
Looking ahead
Whilst we have continuing headwinds to deal with, we look forward to 2026 and
beyond with a clear direction and true enthusiasm. By focusing on the things
that we can control and having strategies to pivot around issues which we
cannot, I believe that Nexteq can deliver an exciting future for its wonderful
team of colleagues; its customers; partners and investors.
On behalf of the Board, I would like to express our gratitude to the OneNexteq
team for their skills, energy and resilience, and I look forward to
celebrating our successes in 2026 and beyond.
Carol Thompson
Chair
CHIEF EXECUTIVE'S REPORT
2025 in summary
2025 was a year of successful delivery for Nexteq, and I am extremely proud of
our achievements. We exceeded the commitments set out at our Capital Markets
Day (CMD) in February, despite well-documented external headwinds including a
significant change in the customer mix, tariffs, ongoing component
supply-chain constraints, and unexpected end-of-life (EOL) issues. The
business continued to perform strongly, underpinned by excellent customer
service and the successful delivery of market-leading, technology-based
products and solutions. Our ability to execute against our plans in a
challenging environment demonstrates the resilience of our operating model,
the strength of our customer and technology proposition, and the skill and
determination of our team.
Nexteq is an exceptional technology product business. The 'OneNexteq'
objective gathered momentum as we focussed on what sets us apart in our
markets: our ability to combine all of the skills across the Group to deliver
a unique innovation agenda.
Whilst 2025 did have its challenges, the Group delivered revenues of $90.2m
(FY24: $86.7m), 5% ahead of guidance given at the Capital Markets Day. This is
testament to the Group's product development approach; customer relationships
and effective management of three significant 'headwinds':
1. Tariffs. The Group implemented targeted actions ensuring the impact of
tariffs was minimised. In the Gaming sector, the team managed to secure zero
tariff impact, whilst in the Industrial Displays markets, a small increase to
the original tariff level was seen, with the impact passed down the supply
chain. The real impact was from tariffs on other components within customers'
bills of materials which increased end-product costs and reduced customer
demand, indirectly impacting Nexteq.
2. Component supply chain issues. Throughout 2025, the impact of
significant growth in AI solution providers relating to server development has
meant DDR4; DDR5 and SSD availability has been seriously impacted with the
volume being devoured by these AI organisations. This has led to
eye-watering and regular price increases across these products, leading to
Bill of Material (BoM) cost increases across our customer base. The Group
has a strong track record of managing supply chains and customer demand
through a combination of revised commercial terms and strategic component
stock purchases, utilising the strength of Nexteq's balance sheet to ensure
integrity of supply for our customers and minimising the impact of Nexteq's
gross margin.
3. Customer mix changes. The biggest impact on 2025 outcome was the
changing customer mix. The Group's historically largest customer was acquired
by private equity in 2025, leading to a significant reduction in their volume
in year. Whilst this acquisition was known from the start of the year, the
volume risk crystallised sooner, and more dramatically than predicted. We
previously anticipated a prudent 25% board volume reduction, but the reduction
was actually 70%, as the new organisation aggressively rationalised its
product range to deliver operating cost savings. It is important to note
that this customer was historically the Group's largest customer from a
revenue and margin perspective, highlighting the outstanding performance to
deliver the revenue growth of 4% for the Group in 2025.
Nonetheless, operational challenges can be the catalyst for innovation.
Through the launch of a new gaming hardware platform, we deepened an existing
customer relationship, helping to mitigate some of the impact of the sudden
volume reduction. The innovative new platform delivered enhanced graphics
performance, supporting our customers' product development and enabling them
to win significant volume, and generating new revenue for the Group. This new
revenue was significant, but with a lower margin yield, and this will continue
to be a 'new reality' for Nexteq to deal with on a continuing basis.
2025 was a year of integrating key business structures as we pushed ahead with
our OneNexteq agenda, to collaborate as much as possible to best utilise the
tremendous skills we have. We have combined our skills across the Product
teams, Operations and customer technical support to make us operationally
efficient, and highly effective in delivering new product roadmaps.
Positive operating cash generation continues
Nexteq operates a highly efficient business model, resulting in strong and
consistent operating cash generation across the Group. In 2025, this
underpinned the dividend payment of $3.0m, and the return of $0.6m back to
shareholders through our first share Buyback programme. Even with this, the
Group ended with $25.0m of net cash, giving us the flexibility to introduce a
further share Buyback programme, consider targeted 'bolt-on' M&A, and
invest in sourcing critical components through strategic stock purchases.
Growth strategy: performance vs strategic objectives
At the CMD in February, we outlined the 'signposts to success' for the
three-year plan, with the key objectives for customer and product development
to support long-term growth. These have become the driving force behind
OneNexteq's delivery agenda.
We made progress across our signposts to success and I am delighted with the
focus the business has on these pillars of achievement.
Signposts to success:
1. Pipeline Growth. Under our new OneNexteq sales leadership focus, and
with the new Group Customer Relationship Management (CRM) system in place, the
business had set an objective to deliver 50% growth to total contract value
(TCV) of $630m by the end of 2027. We are on track to deliver this
challenging objective, developing our pipeline to a value of over $480m by
year end 2025.
2. Nexteq IP revenue. The development of proprietary intellectual
property is a core pillar of the Group's product strategy. The Group set the
objective to generate $10m of revenue from newly created Nexteq IP by FY2027.
$3m new Nexteq IP revenue was achieved through the Group's gaming turnkey
cabinet solutions and its innovative HMI offering, particularly through its
award winning ProDeck solution. With committed orders in place for 2026 and
new innovations being introduced, the Group is well positioned to deliver
further progress towards this objective.
3. Number of $1m customers. Diversification of our revenue is a constant
focus and growing the number of $1m customers from both the Quixant and
Densitron brands, will make our business healthier in the long term and reduce
customer concentration. In 2024, the Group had ten $1m-value customers, and
this grew to 14 in 2025, with growth delivered across both brands. Quixant had
eight $1m customers (2024: seven) and Densitron had six (2024: three). A
clear focus on organic growth in current accounts, supported by product
development efforts has enabled us to deliver this. We are onboarding several
customers wins that are expected to scale to deliver the 2027 goal of 20
$1m-value customers.
Product Innovation: progress against 2025 objectives
The Group's three-year plan defined key product deliverables for 2025,
supporting the execution of its longer-term strategy.
1. Develop and launch Tactila HMI solution - ACHIEVED
Three top ten broadcasters have adopted the market leading Rotary Dial
technology and are being on-boarded through Q1 and Q2 of 2026. Revenue will
commence in H2 2026 as planned, with mass production taking place in Taiwan.
We also celebrated several prestigious industry awards in recognition of the
innovation and performance of our ProDeck solution.
2. Grow the Core business of Densitron by 10% - STILL IN PROGRESS
The Core Densitron business had a difficult 2024, with both North America and
Rest of the World regions being impacted by key components going End of Life
(EOL). New business was secured during 2025, however, given Densitron's long
product development and customer integration cycles, the revenue impact will
be weighted to 2026 and beyond.
3. Develop new Gaming Platforms for the two largest customers - ACHIEVED
We successfully developed and delivered bespoke new platforms for our two
largest customers in 2025. Both platforms utilise the latest technology to
allow maximum creativity in support of impressive new game content that will
drive cabinet sales for them, incorporating the new Quixant computer. The
new platform in our historically largest customer is a game changer, however,
following the acquisition described above, volumes are expected to reduce in
the near term, while presenting a significant opportunity to broaden our
relationship with the acquirer.
4. Develop a groundbreaking new Gaming hardware platform - ACHIEVED
The IQON 3 and IQON Air 3 are our next-generation gaming computers, delivering
market-leading AMD processing at a highly competitive price point. Available
in fan and fanless configurations, they provide greater power and performance,
and unlock new market opportunities by supporting a wider range of customer
deployments.
Crucially, these solutions were the first we delivered without shortage-driven
design compromises, instead engineered for long-term supply chain resilience
and incorporating the latest DDR5 memory. The offering was launched in the USA
at G2E in October 2025 and brought to the European market at ICE 2026, with
strong market feedback and early customer validation.
5. Successful market launch of our software solution Launchpad -
ACHIEVED
In 2025, Quixant delivered meaningful innovation in gaming software with the
launch of Launchpad, a platform designed to transform how customers deploy and
manage gaming content. By enabling customers to outsource both the hardware
and software platform, Launchpad allows them to focus resources on game
development, supporting stronger content, increased cabinet sales, and higher
demand for Quixant solutions.
Launchpad is offered alongside our hardware platforms and provides opportunity
to generate recurring revenue for Nexteq. Importantly, the platform also
enables online gaming companies to bring their content into land-based
environments, opening access to new market opportunities.
Delivering Tactila, ProDeck, IQON 3 and Launchpad demonstrates renewed
momentum in product development across Nexteq. We have focused on innovation
and clear market differentiation, with the benefits of this investment
expected to be realised through 2026 and beyond.
Gaming review - Quixant
Quixant is a market-leading provider of technology solutions to the land-based
gaming market, predominantly dealing with game manufacturers that sell slot
machines to a range of operators, from Casinos through to individual leisure
venues. Quixant supplies gaming computers, monitors and full turnkey
cabinets and has expanded its offering to include software platforms -
enabling customers to focus their R&D investment on creating better game
content.
Our customers succeed through outstanding gameplay and content; Quixant
provides the specialist technology that enables game designers to maximise
creativity and performance. We offer a broad portfolio spanning different
price points and graphics capabilities, underpinned by a common Quixant
Software Suite across our computer range. This standardised platform allows
customers to deploy different PCs within their estate to match game
performance requirements, while maintaining a consistent development and
operational environment.
Since 2020, when the Covid pandemic started, Quixant has become expert in
managing the impact of component shortages. Through its internal team of
engineers, we are able to switch between component manufacturers based on
availability, which means that our customers can ensure continuity of supply
in supply constrained component circumstances. Component supply issues
continued throughout 2025, with DDR4 memory and SSDs the latest challenge as
AI-driven demand tightened availability and increased pricing. DDR4 supply was
further constrained as the market transitioned to newer standards, with
manufacturers prioritising higher-value DDR5 production and phasing DDR4
toward end-of-life. Switching supplier of memory takes considerable
engineering resources for us and our customers, and we work with them to
minimise the impact of these changes. However, sharply rising costs have
impacted percentage margins, as price increases have been passed through to
customers without generating incremental margin on the higher cost base.
This is an essential element of how we work with our partners - we believe in
the long-term benefit of partnership , with a very loyal and stable customer
base as a result.
Throughout 2025, Quixant focused on regaining the innovation leadership in the
gaming sector. The division made strong progress against this objective
through the development of new gaming hardware platforms and the launch of its
innovative gaming software offering, described above. This enabled new
customer wins and expansion, contributing to revenue growth of 10% to $60.2m
(2024: $54.8m), offsetting significant volume reductions from the division's
historically largest customer. As a result, Quixant increased its share of
Group revenue to 67% in 2025 (2024: 63%). North America continues to be
Quixant's largest market, representing 77% of divisional revenue (2024: 75%).
Growth was driven by two key factors: the addition of a new customer in North
America, our largest by volume/revenue in 2025, and the successful deployment
of turnkey cabinets into the UK market for the first time.
Gross margins were impacted by the DDR4 challenges and the replacement of
revenue from our historically largest customer. The supply challenges around
DDR4 necessitated the testing of a substantial number of alternative DDR4
solutions to ensure continuity of supply and optimised pricing. This also
required coordinating our customers to test the new DDR4 variants to ensure
compliance with their regulatory requirements.
The development of the Launchpad software solution is a true piece of gaming
innovation and opens up a new opportunity for the business through recurring
revenue models, as well as the potential of allowing online game content
providers an entry point into the land-based environment. Quixant, as ever,
is driving the technology agenda through its unique position in this market.
Quixant creates Hardware Platforms relevant to market requirements for power:
price ratio. It has three core ranges of solutions:
· IQ: Cost effective range - designed for performance at great
prices.
· IQON: Mid-range - more power; drives more screens, offering great
performance value.
· QMAX : Customised solutions to ensure maximum performance.
The total number of gaming hardware platforms sold increased significantly in
2025 vs 2024. The 18% increase was driven by a sharp increase in the IQ
range as we secured market penetration across the USA and LatAm; and the IQON
range introduced a new product with which we secured significant growth from
an existing customer, giving a 67% uplift in this mid-range product family.
The QMAX solutions declined as a result of the changes in ownership of the
historically largest customer.
Industrial Displays review - Densitron
Our Densitron brand is critical to our OneNexteq strategy, where computer
backed displays give specific opportunity across multiple target verticals,
and will drive growth through the remainder of the three-year plan.
The brand, having celebrated its 50(th) anniversary, is a true expert in
creating advanced HMI solutions and the development and supply of display
technologies tailored to customers' specific requirements. Our engineering
teams are focused on the development of new IP-based solutions, which we are
taking across multiple market verticals. Our supply chain expertise provides
customers with a clear advantage in quality, responsiveness and speed to
market.
Densitron operates globally, with North America being its largest market.
Revenue declined by 6% year-on-year in 2025, driven by EOL component
complexity, ongoing customer de-stocking, and tariff-related pressure on
customer end markets. Customer engagement remains strong across development
cycles, positioning the business well for a recovery as market conditions
improve.
Complementing this is a new Sales and Marketing structure designed to provide
more presence across the sales regions and specifically targeted campaigns to
our target verticals, including Medical and Life Sciences, Test and
Measurement and Broadcast and ProAV. These are already showing excellent
promise, and the business expects future growth from these market specific
campaigns.
Margin management continues to be a focus of the business. Densitron continued
its progress increasing margins to a record position after multiple years of
margin increase. This is a result of winning new business at strong margins
through the delivery of fully integrated display solutions, embedding more of
our technology capability into our customers' end products, which adds more
value to those products.
Product innovation has delivered the Tactila and ProDeck platforms. Tactila
continued its transition from development into commercialisation during 2025,
progressing customer wins towards mass production. Consistent with the
typically long sales cycles in these markets, revenue is expected to build
through 2026, with a focus on converting a strong pipeline for this key
innovation.
2026 Focus areas
Nexteq will focus on a core set of objectives to develop our OneNexteq
approach and to continuously delight our customers:
1. Awesome new product delivery. Our Tactila; Launchpad; ProDeck and IQON
solutions will be executed flawlessly
2. Continued focus on R&D. We are world class engineers. Solving customer
problems with new solutions across OneNexteq is what we live for.
3. Collaboration. As a global organisation, create and develop exceptional
teams who have a customer led approach and who have a 'talk to each other
mentality
4. Be easy to do business with. Make the business run like clockwork. Do one
thing better every day and make the Densitron customer experience continuously
amazing.
5. Effective supplier management. Working with our suppliers to create new
products and solutions which aid our R&D efforts
Despite the well documented challenges in our markets around component
shortages and costs; the impact of tariffs on a business which has most of its
business in North America; and the accelerating geopolitical uncertainty,
Nexteq is focussing on what it can control and delivering the innovative
technology building blocks which can deliver profitable revenue growth for
long term shareholder value creation. Nexteq is a business built upon
engineering expertise, and utilising the technology skills in the business
will deliver an exciting future for the Group.
Duncan Faithfull
Chief Executive Officer
Financial Review
Revenue growth and operating cash flows
Statutory results
Group revenue was $90.2m, 4% higher than the $86.7m delivered in 2024. Gross
profit was $29.6m (2024: $31.1m), a reduction of 5% over the prior year, with
gross margins at 32.8% (2024: 35.9%). Operating expenses were $27.3m (2024:
$30.8m), resulting in operating profit of $2.3m (2024: $0.3m). Net finance
income was $0.8m (2024: $1.4m), resulting in profit before tax of $3.2m (2024:
$1.7m) and an income tax expense of $1.2m (2024: $1.4m), equivalent to an
effective tax rate of 39.0% (2024: 82.0%). Basic earnings per share (EPS) were
3.21cents (2024: 0.48cents), an increase of 569%. Diluted EPS were 3.14cents
(2024: 0.48cents), an increase of 554%.
Revenue
Quixant revenues were $60.1m, an increase of 10% on the prior year (2024:
$54.8m). Unit sales increased to 51,247 platforms delivered in the year,
increasing 18% on the prior year (2024: 43,569). Demand for our mid-range PCs
grew substantially, with growth in the cost-effective range also, but there
was lower demand for our high-end products in 2025. The increase in overall
Quixant revenues was largely due to the increased unit sales.
Densitron delivered revenue of $30.1m, a decrease of 6% on the prior year
(2024: $31.9m), with demand continuing to be impacted by end-of-life
challenges. New business revenues for Densitron were at substantially higher
average selling prices as a result of the Group's focus on delivering full
solutions rather than standalone displays.
Gross profit and gross profit margin
The Group generated gross profit during the year of $29.6m (2024: $31.1m)
representing a gross margin of 32.8% (2024: 35.9%). Densitron delivered a
historic high gross margin supported by new business wins delivering customer
solutions at higher margins, whilst Quixant gross margin reduced as a result
of customer and product mix changes, and component memory price challenges.
Adjusted operating expenses
Adjusted operating expenses decreased by 3% to $26.8m (2024: $27.8m). See Note
1 to the condensed consolidated financial statements for a reconciliation of
adjusted operating expenses to operating expenses. The Group continued to
invest in sales activities with travel and marketing spend at $2.4m (2024:
$2.6m), the reductions reflecting an increased focus on digital marketing
activities. The reductions in headcount implemented at the end of 2024
resulted in average employees reducing to 212 in 2025 from 223 in 2024.
Payroll costs were $19.6m, in line with the prior year (2024: $19.6m),
reflecting the impact of inflation, performance related bonuses and severance
costs off-setting the reduction in headcount.
During the year, Group expenditure on R&D increased to $4.9m (2024:
$4.6m). These costs relate to investment activities principally undertaken in
Taiwan, Italy, and the UK. Of these costs, $2.3m were capitalised (2024:
$1.8m) as the Group continued to focus on developing innovative new products
including Launchpad and Tactila, with amortisation for the year on total
capitalised development costs of $1.4m (2024: $1.2m). During the year the
Group abandoned in-progress development projects with a carrying value of
$0.7m (2024: $0.1m). These decisions were taken following internal review,
where it was determined that the projects no longer met the criteria to
capitalise product development cost as set out in IAS38. These projects were
primarily focused on solutions incorporating DDR4 memory where availability
and pricing challenges have impacted the viability of the intended products.
Impairment of trade receivables remained low, with an impairment loss recorded
in the current year of $0.1m compared with $0.2m in 2024. The Group also
recognised exchange rate gains of $0.4m (2024: $0.4m exchange rate gains).
Management continued its measures to have natural hedges in place to limit the
impact of foreign exchange fluctuations, which were more volatile than the
previous financial year.
Adjusted operating expenses also benefited from a $0.1m R&D tax credit
(2024: $0.1m charge). Since 2023 the Group qualified for the large company
Research and Development Expenditure Credit (RDEC) regime due to the size of
the Company's balance sheet. Under the RDEC scheme the tax credits are
recognised within operating expenses in line with the R&D expense.
Valuation of Aruze-related assets
Balances related to Aruze Philippines Manufacturing Inc. ('APMI'), have been
provided for in previous years, including a receivable balance of $1.0m owed
by APMI to the Group arising from the sale of goods. The Group continues to
take steps to recover this balance as part of APMI's voluntary liquidation
procedure, which has been in progress in the Philippine courts since 22 August
2023.
During the year, the Group sold the final balance of raw materials, which had
previously been written down to a value of $0.2m that were originally
earmarked for use by APMI. The raw material inventory was sold for its
recoverable value of $0.2m. Finished goods with $0.2m (2024: $0.2m) are
included in Nexteq Group's balance sheet at 31 December 2025, with $Nil (2024:
$2.2m) inventory provision remaining at 31 December 2025 in respect of APMI.
Net finance income
Finance income decreased to $0.8m (2024: $1.4m) as central banks lowered
interest rates driving a lower return on the Group's cash balances, alongside
a reduction in the average cash balance compared with the previous year.
Finance expense of $0.2m (2024: $0.0m) principally related to leases.
Adjusted profit before tax
Adjusted profit before tax reduced by 25% to $3.6m (2024: $4.8m). The
adjustments to statutory profit before tax of $0.5m (2024: $3.1m) consisted
of:
· Share-based payments charge of $0.5m (2024: $0.8m credit). During the year,
the Group granted further Long-Term Incentive Plan (LTIP) shares to employees.
The LTIP awards vest in three years providing continuous employment during the
period, and attainment of performance conditions relating to earnings per
share (EPS).
· Amortisation of acquired intangibles charge of $0.2m (2024: $0.3m). This
charge relates to intangible assets recognised in the acquisition of Densitron
and IDS.
· Gain on disposal of investment property of $0.2m (2024: $Nil). During the
year, the Group disposed of an area of land owned by the Group at Blackheath
in London. The Group had written off the previously booked value of the land.
· On 9 July 2025 the property was sold and cash proceeds of $205,846 were
received on disposal. In addition to this, directly attributable legal fees of
$4,982 were incurred, resulting in net proceeds of $200,864.
Taxation
The Group recognised a corporation tax charge of $1.2m in the year, compared
with $1.4m in 2024. The tax charge consists of a current tax charge of $1.1m
(2024: $0.9m) and a deferred tax charge of $0.1m (2024: $0.5m) relating to the
movement in deferred tax assets and liabilities in the current year.
The effective tax rate on statutory profit before tax decreased to 39.0%
(2024: 82.0%). The prior year tax rate was higher due to $3.2m of tax losses
being derecognised due to uncertainty over the recoverability. Going forward,
we expect the effective tax rate to decrease to be approximately 16%−19% as
profits increase, depending on the regional mix of profits and product mix
sold, which impact the UK patent box claims.
Earnings per share
Basic EPS increased by 569% to 3.21c per share (2024: 0.48c per share).
Adjusted diluted earnings per share decreased by 29% to 3.63c per share (2024:
5.08c per share).
Balance sheet
Non-current assets decreased to $20.5m as at 31 December 2025 (31 December
2024: $22.1m) mainly due to the $1.1m reclassification of the Group's property
in Balsham, Cambridge as an asset held for sale.
Current assets increased to $68.5m at 31 December 2025 (31 December 2024:
$63.4m) mainly due to a significant increase in trade and other receivables to
$25.6m at 31 December 2025 from $16.5m at 31 December 2024, reflecting the
strong trading activity at the end of the year. This was partly offset by a
decrease of Cash and cash equivalents by $4.2m from $29.5m at the start of the
year to $25.3m at 31 December 2025.
Cash flow
The Group generated $3.5m cash from operating activities in the year (2024:
$13.0m). Adjusted operating cash flow, which excludes tax payments, was $4.1m
(2024: $15.5m), which represented 112% of adjusted profit before tax (2024:
324%). This exceeded the Group's 2025 cash conversion KPI target of 100%.
The Group capitalised $2.3m of development costs (2024: $1.8m), which reflects
the continued development of new products as the Group expands its product
portfolio.
The Group finished 2025 with net cash of $25.0m (2024: $29.1m), comprising
cash and cash equivalents of $25.3m (2024: $29.5m) and gross debt of $0.3m
(2024: $0.4m). The debt relates to a mortgage over the Group's offices in
Taiwan.
Dividend
The Board proposes a dividend for the year ended 31 December 2025 of 3.9p per
share (2024: 3.7p per share). This dividend will be payable on 30 May 2026 to
all Shareholders on the register on 2 May 2026. The corresponding ex-dividend
date is 1 May 2026.
Foreign exchange
The Group reports its results in US Dollars as this is the principal currency
in which it trades with customers, with approximately 90% (2024: 93%) of our
revenues denominated in US Dollars.
The Group's reported results are impacted by US Dollar movements against
currencies in the territories in which it operates, principally Pounds
Sterling, Euros and Taiwan Dollars. The following are the average and closing
rates for the current and prior year:
Average rate
Income statement 2025 2024
USD/GBP 1.32 1.28
USD/Euro 1.13 1.08
USD/TWD 0.032 0.031
Closing rate
Balance sheet 2025 2024
USD/GBP 1.35 1.26
USD/Euro 1.18 1.04
USD/TWD 0.032 0.031
As most of the Group's revenues are denominated in US Dollars, the impact of
foreign exchange movements on reported revenues was minimal in 2025 and 2024.
The impact on foreign exchange movement on profit before tax is mostly due to
operating expenses incurred in Pound Sterling and Taiwan Dollars.
The average US Dollar exchange rate against currencies in the territories in
which the Group operates for 2025 were similar to 2024 levels, resulting in a
negligible impact on adjusted operating expenses, when compared to 2024
average rates. The Group recognised translational foreign exchange rate gains
of $0.4m in 2025 (2024: $0.4m exchange rate gain), with $Nil impact year over
year.
Alternative performance measures (APMs)
Throughout this preliminary announcement, alternative performance measures
(APMs) are used to describe the Group's performance. These are not recognised
under UK-adopted international accounting standards or other generally
accepted accounting principles (GAAP). When reviewing Nexteq's performance,
the Board and management team focus on adjusted results in addition to
statutory results.
APMs are non-GAAP measures and provide supplementary information to assist
with the understanding of the Group's financial results and with evaluation of
operating performance for the periods presented in the preliminary
announcement. APMs, however, are not a measure of financial performance under
IFRS and should not be considered a substitute for measures determined in
accordance with IFRS. APMs have been provided for the following reasons:
1) To present users of the preliminary announcement with a clear view of what
we consider to be the results of our underlying operations, enabling
consistent comparisons over time and making it easier for users of the report
to identify trends.
2) To provide additional information to users of the preliminary announcement
about our financial performance or financial position.
3) To show the performance measures that are linked to remuneration for the
Executive Directors.
Matt Staight
Chief Financial Officer
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME
For the years ended 31 December 2025 and 2024
2025 2024
Note $'000 $'000
Revenue 3 90,227 86,678
Cost of sales (60,618) (55,568)
Gross profit 29.609 31,110
Operating expenses (27,298) (30,809)
Operating profit 2,311 301
Finance income 1,006 1,448
Finance expense (165) (28)
Profit before tax 3,152 1,721
Taxation 4 (1,227) (1,410)
Profit for the year 1,925 311
Other comprehensive income/(expense) for the year, net of income tax
Items that are or may be reclassified subsequently to profit or loss: 1,096 (1,449)
Foreign currency translation differences
Total comprehensive income / (expense) for the year 3,021 (1,138)
Basic earnings per share 5 $0.0321 $0.0048
Diluted earnings per share 5 $0.0314 $0.0048
The Italian subsidiary, Quixant Italia Srl, is 99% owned by the Group. The
comprehensive income and equity attributable to the non-controlling interests
in this subsidiary are not material.
The consolidated statement of profit and loss and other comprehensive income
has been prepared on the basis that all operations are continuing operations.
CONSOLIDATED BALANCE SHEET
As at 31 December 2025 and 2024
Group
2025 2024
$'000 $'000
Non-current assets
Property, plant and equipment 4,643 5,688
Intangible assets 11,342 11,494
Right-of-use assets 2,025 2,403
Investment property − −
Investments in Group companies and associated undertakings − −
Deferred tax assets 2,425 2,476
Trade and other receivables 61 61
20,496 22,122
Current assets
16,456
Inventories 17,435
Trade and other receivables 25,647 16,461
Cash and cash equivalents 25,306 29,469
Assets held for sale 1,066 −
68,475 63,365
Total assets 88,971 85,487
Current liabilities (93)
Loans and borrowings (87)
Trade and other payables (15,456) (11,775)
Tax payable − -
Lease liabilities (448) (501)
(15,997) (12,363)
Non-current liabilities
Loans and borrowings (191) (271)
Provisions (530) (355)
Lease liabilities (1,752) (1,878)
(2,473) (2,504)
Total liabilities (18,470) (14,867)
Net assets 70,501 70,620
Equity attributable to equity holders of the parent
Share capital 106 106
Treasury shares (7,612) (6,996)
Share premium 6,747 6,747
Share-based payments reserve 1,068 888
Retained earnings 71,355 72,134
Translation reserve (1,163) (2,259)
Total equity 70,501 70,620
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARS ENDED 31 DECEMBER 2025 and 2024
Share Capital Share Premium Translation Reserve Share-Based Retained Total Equity
Treasury Shares Payments Earnings
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 2024 106 - 6,747 (810) 1,905 74,398 82,346
Total comprehensive expense for the year - - - - 311 311
Profit for the year -
Other comprehensive expense - - - (1,449) - - (1,449)
Total comprehensive expense for the year - - - (1,449) - 311 (1,138)
Transactions with owners, recorded directly in equity
Treasury shares purchased - (6,996) - - - - (6,996)
Share-based payment credit - - - - (751) - (751)
Deferred tax on share-based payment expense - - - - 21 - 21
Reserve transfer - - - - (261) 261 -
Share based payment awards - - - - (26) - (26)
Dividend paid - - - - - (2,836) (2,836)
Exercise of share options - - - - - - -
Total contributions by and distributions to owners - (6,996) - - (1,017) (2,575) (10,588)
Balance at 31 December 2024 106 (6,996) 6,747 (2,259) 888 72,134 70,620
Share Capital Share Premium Translation Reserve Share-Based Retained Total Equity
Treasury Shares Payments Earnings
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 2025 106 (6,996) 6,747 (2,259) 888 72,134 70,620
Total comprehensive income for the year - - - - 1,925 1,925
Profit for the year -
Other comprehensive income - - - 1,096 - - 1,096
Total comprehensive income for the year - - - 1,096 - 1,925 3,021
Transactions with owners, recorded directly in equity
Treasury shares purchased - (642) - - - - (642)
Share-based payment expense - - - - 481 - 481
Deferred tax on share-based payment expense - - - - (9) - (9)
Reserve transfer - - - - (248) 248 -
Dividend paid - - - - - (2,974) (2,974)
Exercise of share options - 26 - - (44) 22 4
Total contributions by and distributions to owners - (616) - - 180 (2,704) (3,140)
Balance at 31 December 2025 106 (7,612) 6,747 (1,163) 1,068 71,355 70,501
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEARS ENDED 31 DECEMBER 2025 and 2024
Group
2025 2024
$'000 $'000
Cash flows from operating activities 1,925
Profit for the year 311
Adjustments for: 2,185
Depreciation and amortisation 2,151
Loss on disposal of property, plant and equipment 14 118
Impairment losses on intangible assets 712 2,922
Depreciation of leased assets 702 642
Increase in provision for doubtful debts 109 245
Movement in provisions 150 44
R&D tax (credit)/expense (121) 142
Taxation charge 1,227 1,410
Finance income (1,006) (1,448)
Finance expense 165 28
Exchange rate gains 21 234
Share-based payment expense/(credit) 481 (751)
Operating cash flows before movement in working capital 6,564 6,048
(Increase)/Decrease in trade and other receivables (7,947) 9,741
Decrease in inventories 1,533 5,745
Increase/(Decrease) in trade and other payables 3,911 (6,020)
4,061 15,514
Interest paid (1) (13)
Tax paid (598) (2,524)
Net cash from operating activities 3,462 12,977
Cash flows from investing activities
Addition of development costs (1,744) (1,228)
Purchase of property, plant and equipment (293) (980)
Property purchase deposit (1,517) -
Addition of externally purchased intangible assets (535) (650)
Interest received 1,006 1,345 -
Net cash used in investing activities (3,083) (1,513)
Cash flows from financing activities (91)
Repayment of borrowings (87)
Mortgage interest paid (7) (9)
Lease liability interest paid (151) (5)
Payment of lease liabilities principal (566) (709)
Purchase of Treasury shares (642) (6,996)
Exercise of share options 4 -
Dividends paid (2,974) (2,836)
Net cash used in financing activities (4,427) (10,642)
Net increase in cash and cash equivalents (4,048) 822
Cash and cash equivalents at 1 January 29,469 28,406
Foreign exchange rate movements (115) 241
Cash and cash equivalents at 31 December 25,306 29,469
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. General information
The financial information set out above and below, does not constitute the
company's statutory accounts for the years ended 31 December 2025 or 2024 but
is derived from those accounts. Statutory accounts for 2024 have been
delivered to the registrar of Companies, and those for 2025 will be delivered
in due course. The auditor has reported on those accounts; their reports were
(i) unqualified, (ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their report, and
(iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
While the financial information included in this preliminary announcement has
been prepared in accordance with the recognition and measurement criteria of
UK-adopted international accounting standards and as applied in accordance
with the provisions of the Companies Act 2006, this announcement does not
itself contain sufficient information to comply with UK-adopted international
accounting standards. The Company expects to publish full Financial Statements
that comply with UK-adopted international accounting standards during March
2026.
Going concern
The Group's operational and financially robust position is supported by:
- Positive operating cash generation, leading to a net cash balance of $25.0m at
31 December 2025 (31 December 2024: $29.1m).
- The Group returned $3.6m (2024: $9.8m) to shareholders through its annual
dividend and share buyback programme.
In undertaking a going concern assessment, the Directors have reviewed
financial projections for a period of at least twelve months from the date of
this report (the assessment period). Management prepared a base case scenario
based on the approved budget for 2026 and forecasts for the first three months
of 2027. Management also prepared a severe but plausible downside scenario,
using the following key assumption:
- A 25% reduction in 2026 and 2027 Quixant revenues to replicate
the impact that a downturn similar to that experienced in 2019 would have on
the Group's revenues.
In this scenario, the Group continues to have sufficient cash reserves and
working capital to continue operating as a going concern through the review
period.
While the Directors have no reason to believe that customer revenues and
receipts will decline to the point that the Group no longer has sufficient
resources to fund its operations, should this occur, the Group would look to
take out additional funding facilities, as well as making further reductions
in controllable costs. There would also be an opportunity to sell certain
property and inventory assets to accelerate cash generation and/or mitigate
risk.
Consequently, the Directors are confident that the Group and Company will have
sufficient funds to continue to meet its liabilities as they fall due for at
least 12 months from the date of approval of the financial statements (17
March 2026) and, therefore, have prepared these financial statements on a
going concern basis.
Use of judgements and estimates
The preparation of financial information in conformity with UK-adopted
international accounting standards requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in
the process of applying the Group accounting policies. The areas involving a
higher degree of judgement and estimation relate to the recoverability of
goodwill, valuation of Quixant CGU inventory, capitalisation of development
costs and deferred tax asset recognition. Estimates and underlying assumptions
are reviewed on an annual basis. Revisions to estimates are recognised
prospectively.
Significant estimates
Recoverability of goodwill
The estimated recoverable amounts of CGUs have been determined based on the
higher of value-in-use calculations and fair value less costs to sell. These
calculations require the use of estimates and assumptions that are subjective
due to the inherent uncertainty involved in forecasting and discounting future
cash flows. Reasonably possible changes to the assumptions in the future may
lead to material adjustments to the carrying value of CGUs.
Quixant inventory valuation in the Quixant CGU
Inventories, which comprise goods held for resale, are stated at the lower of
cost and net realisable value, on a weighted average cost basis. The estimated
recoverable amount of the inventory balance in the Quixant CGU for the Group
financial statements and in the Parent Company financial statements is
subjective, due to the inherent uncertainty involved in forecasting of future
sales. Provisions are made to write down any slow-moving or obsolete inventory
to net realisable value.
As at 31 December 2025, the Group balance sheet and Parent company balance
sheet included Quixant inventory of $13.9m (2024: $13.9m) and $10.5m (2024:
$10.6m) respectively. The provision against slow-moving and obsolete inventory
for the Group as at 31 December 2025 is $3.3m (2024: $4.9m) and in the Parent
company is $2.5m (2024: $4.4m). A difference of 5.0% in the provision as a
percentage of gross inventory would give rise to a difference of +/- $0.8m in
gross margin. The choice of a 5.0% change for the determination of sensitivity
represents the change to the level of provisioning for the prior year.
Deferred tax asset recognition
A deferred tax asset is recognised only to the extent that it is probable that
sufficient taxable profits will be available to utilise the temporary
difference. The Group has made estimates on the likelihood that future taxable
profit will utilise the tax losses, meaning the deferred tax assets being
realised by the Group is contingent upon the estimates regarding future tax
profits of the Group in the jurisdiction where the loss exists. At the
reporting date, the Group had unused tax loss of $15.3m (2024: $16.8m)
available for offset against future profits.
In order to support the recognition of $3.1m (2024: $3.4m) deferred tax asset
on losses, modelling was undertaken to review the recovery period of the
deferred tax asset. The modelling was based on management forecasts for the
subsequent five years and showed that the deferred tax asset on losses is
expected to be fully recovered by 2030. A probability weighted model was used
to determine the loss recoverability.
This modelling is judgemental given the forward-looking nature of performance,
taking into account inherent uncertainties constraining the expected level of
profit as appropriate. Changes in the estimates will affect future taxable
profits and therefore the recoverability of the deferred tax assets. The value
of unrecognised tax losses in the UK as at 31 December 2025 is $3.2m (2024:
$3.2m). The losses may be carried forward indefinitely.
Reconciliation of adjusted performance measures
The Group uses certain alternative performance measures to evaluate
performance and as a method to provide Shareholders with clear and consistent
reporting. The Directors consider that these represent a more consistent
measure of performance by removing items of income or expense that are
considered significant by virtue of their size, nature or incidence or which
have a distortive effect on current year earnings and are relevant to an
understanding of the Group's financial performance, cash generation and
liquidity position. These measures include Adjusted Profit before tax,
Adjusted Profit after tax, Adjusted Operating expenses, Adjusted EBITDA,
Adjusted Operating cash flow and Net cash. The adjusted measures are not
defined terms under IFRS and may therefore not be comparable with similarly
titled measures reported by other companies. They are not intended to be a
substitute for, or superior to, IFRS measures. See below for analysis of the
adjusting items in reaching adjusted performance measures.
Adjusted Profit before tax
2025 2024
$'000 $'000
Profit before tax 3,152 1,721
Adjustments:
Amortisation of customer relationships, technology and order backlog(1) 182 271
Share-based payments expense/(credit)(2) 481 (751)
Restructuring charges(3) - 665
Impairment of goodwill(4) - 2,873
Gain on disposal of investment property(5) (201) -
Adjusted Profit before tax 3,614 4,779
Adjusted Profit before tax % (Adjusted Profit before tax/Revenue) 4.0% 5.5%
1. The amortisation of customer relationships, technology and order
backlog has been excluded as it is not a cash expense to the Group.
2. Share-based payments expense/(credit) has been excluded as it is
not a cash-based expense/(credit).
3. Restructuring charges relates to leaver costs incurred in headcount
reduction actions taken in December 2024.
4. The impairment of goodwill has been excluded as it is not a cash
expense to the Group.
5. The gain on disposal of investment property has been excluded as it
is non-recurring item.
Adjusted Profit after tax
2025 2024
$'000 $'000
Profit after tax 1,925 311
Adjustments:
Amortisation of customer relationships, technology and order backlog(1) 182 271
Share-based payments expense(2) 481 (751)
Restructuring charges(3) - 665
Impairment of goodwill(4) - 2,873
Gain on disposal of investment property(5) (201) -
Non-recurring tax benefits(6) (166) (46)
Adjusted Profit after tax 2,221 3,323
6. Tax on adjusted items relating to amortisation of customer
relationships, technology and order backlog of $Nil (2024: $Nil), share-based
payment expense of $0.5m (2024: credit of $0.8m) and restructuring charges of
$Nil (2024: $0.7m).
Adjusted Operating expenses
2025 2024
$'000 $'000
Operating expenses (27,298) (30,809)
Adjustments:
Amortisation of customer relationships, technology and order backlog(1) 182 271
Share-based payments expense/(credit)(2) 481 (751)
Restructuring charges(3) - 665
Impairment of goodwill(4) - 2,873
Gain on disposal of investment property(5) (201) -
Adjusted Operating expenses (26,836) (27,751)
Adjusted EBITDA
2025 2024
$'000 $'000
Adjusted Profit before tax 3,614 4,779
Adjustments:
Interest (841) (1,420)
Depreciation 1,174 1,094
Amortisation 2,242 1,476
Adjusted EBITDA 6,189 5,929
Adjusted Operating cash flow
2025 2024
$'000 $000
Net cash from operating activities 3,462 12,972
Add back:
Tax paid 598 2,524
Adjusted Operating cash flow 4,060 15,496
Adjusted Operating Cash conversion % (Adjusted operating cash flow/Adjusted 112% 324%
profit before tax)
Net cash
Group Company
2025 2024 2025 2024
$'000 $'000 $'000 $'000
Analysis of net cash
Cash and bank balances 25,306 29,469 20,284 25,212
Bank loans falling due within one year (93) (87) (93) (87)
Bank loans falling due after more than one year (191) (271) (191) (271)
Net cash 25,022 29,111 20,000 24,854
2. Business and geographical segments
The Chief Operating Decision Maker (CODM) in the organisation is an executive
management committee comprising the Board of Directors. The segmental
information is presented in a format consistent with management information.
The Group assesses the performance of the segments based on a measure of
revenue and operating profit. The segmental split of the balance sheet is not
reviewed by the CODM, and they do not look at assets/liabilities of each
division separately but combined as a group. Therefore, this split for assets
has not been included.
The operating segments applicable to the Group are as follows:
· Quixant - Design, development and manufacturing of gaming platforms and
display solutions for the casino gaming and slot machine industry.
· Densitron - Sale of electronic display products to global industrial markets.
IDS is included in the Densitron reporting segment, since the nature of IDS
business, the products that are sold and the market that the business operates
in are all consistent with that segment.
Reconciliation of segment results to profit after tax:
2025 2024
$'000 $'000
Quixant 11,432 12,100
Densitron 4,944 3,152
Segment results 16,376 15,252
Corporate cost (14,065) (14,952)
Operating profit 2,311 301
Net finance income/(expense) 841 1,420
Profit before tax 3,152 1,721
Taxation (1,227) (1,410)
Profit after tax 1,925 311
Year to 31 December 2025 Year to 31 December 2024
$'000 $'000 $'000 $'000 $'000 $'000
Quixant ( ) Densitron Total(1) Quixant Densitron Total(1)
Other information
Depreciation of owned assets 132 14 146 110 11 121
Amortisation of intangible assets 992 402 1,394 847 387 1,234
Impairment of intangible assets(2) 712 - 712 - 2,922 2,922
1,836 416 2,252 957 3,320 4,277
(1) (Depreciation and amortisation of $1,165k (2024: $796k) were not allocated
to segments as these are considered corporate costs.)
(2 Includes impairment of Densitron CGU Goodwill of $Nil (2024: $2,873k
impairment of Densitron Europe CGU).)
3. Analysis of revenue
2025 2025 2025 2024 2024 2024
$'000 $'000 $'000 $'000 $'000 $'000
Quixant ( ) Densitron(1) Total Quixant Densitron(1) Total
By primary geographical market
Asia 2,926 8,453 11,379 1,727 8,286 10,013
Australia 397 66 463 1,870 30 1,900
UK 2,307 2,969 5,276 2,805 2,062 4,867
Europe excl. UK 7,787 7,946 15,733 6,656 8,711 15,367
North America 46,640 9,106 55,746 41,301 11,619 52,920
Rest of World 107 1,523 1,630 407 1,204 1,611
60,164 30,063 90,227 54,766 31,912 86,678
(1) (2025 Densitron revenue from products splits into Densitron $29.0m (2024:
$31.0m) and IDS $1.1m (2024: $0.9m). IDS revenue included service revenue of
$0.5m (2024: $0.4m) recognised throughout the performance period.)
( )
The above analysis includes sales to individual countries in excess of 10% of
total turnover of:
2025 2024
$'000 $'000
USA 54,800 51,840
Three customers (2024: two customers) individually accounted for more than 10%
of Group revenues in 2025, with revenues of $13.5m (2024: $1.9m), $11.8m
(2024: $9.0m) and $11.7m (2024: $22.2m), respectively. These revenues are
attributable to the Quixant segment.
4. Taxation
Recognised in the profit and loss account
2025 2024
$'000 $'000
Current tax expense
-
UK corporation tax 3
Foreign tax 1,211 1,063
Adjustments for prior years (43) (152)
Current tax expense 1,168 914
Deferred tax
(223)
Origination and reversal of temporary differences 350
Adjustments for prior years 282 136
Change in deferred tax rate - 10
Deferred tax 59 496
Total tax expense in the income statement 1,227 1,410
Reconciliation of effective tax rate
2025 2024
$'000 $'000
Profit for the year 1,925 311
Total taxation expense 1,227 1,410
Profit excluding taxation 3,152 1,721
Tax using the UK corporation tax rate of 25% (2023: 23.52%) 788 430
Non-deductible expenses 118 96
Fixed asset differences 62 81
Patent box tax relief(1) (338) (1,187)
Foreign tax expensed 302 296
Capital gains 26 -
Change in deferred tax rate to 25% - 10
Effect of tax rates in foreign jurisdictions 67 (14)
Unrecognised tax losses - 811
Deferred tax credited directly to equity 9 21
Change to estimates related to prior years 239 (16)
Impairment of goodwill - 718
Other (46) 164
Total taxation expense in statement of profit and loss 1,227 1,410
(1 The Group has elected into the UK patent box regime under which patent box
profits from certain patents are taxed at a reduced rate of corporation tax.)
Deferred tax credit arising in the reporting period and not recognised in net
profit or loss or other comprehensive income but directly credited to equity:
2025 2024
$'000 $'000
Deferred tax asset - share-based payments (9) (21)
Total (9) (21)
5. Earnings per ordinary share (EPS)
2025 2024
$'000 $'000
Earnings
Earnings for the purposes of basic and diluted EPS being net profit 1,925 311
attributable to equity shareholders
Number of shares Number Number
Weighted average number of ordinary shares for the purpose of basic EPS 59,975,348 65,002,312
Effect of dilutive potential ordinary shares: 1,249,656
Share options 369,742
Weighted number of ordinary shares for the purpose of diluted EPS 61,225,004 65,372,054
Basic earnings per share $0.0321 $0.0048
Diluted earnings per share $0.0314 $0.0048
Calculation of adjusted diluted earnings per share: $'000 $'000
Earnings
Earnings for the purposes of basic and diluted EPS being net profit 1,925 311
attributable to equity shareholders
Adjustments
Amortisation of customer relationships, technology and order backlog 182 271
Share-based payments expense 481 (751)
Restructuring charges - 665
Impairment of goodwill - 2,873
(201) -
2,387 3,369
Tax effect of adjustments (166) (46)
Adjusted earnings 2,221 3,323
Adjusted basic earnings per share $0.0370 $0.05111
Adjusted diluted earnings per share $0.0363 $0.05088
6. Post balance sheet events
The Group's second share buyback programme approving the repurchase of up to
5,990,849 shares, launched at the end of 2025. This did not result in any
shares being repurchased before 31 December 2025 under this programme. After
the reporting date, the Company has purchased 3,984,263 ordinary shares as at
17 March 2026 under the programme for an aggregate consideration of $3.9m.
Shares repurchased under the share buyback programme are held in treasury.
The Company, through its Taiwan branch, made an offer in December 2025 for the
purchase of a new office in Taipei, Taiwan. This non-binding offer included a
returnable guarantee deposit of $0.2m, with a further $1.6m deposit
transferred before 31 December 2025. This total of $1.8m was included within
prepayments at the reporting date.
In 2026, a further $1.5m deposit has been paid. Following Board approval, on
6(th) March 2026 the property acquisition was completed for a total
consideration of $15.5m, with $12.2m funding provided through a new mortgage
facility with TCB bank. The mortgage funding is secured on a 20-year repayment
with an interest rate of 1.95%.
On 10th March 2026, the Company entered into agreement to sell its existing
property in Taipei for consideration of $3.7m. The transaction is scheduled to
complete towards the end of 2026, once the Company has moved into its new
office.
There were no other material post balance sheet events that were required to
be disclosed.
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