REG - Nexteq PLC - Trading Update and Notice of Results

NexteqAnnouncement

15/01/2025 07:00

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RNS Number : 3211T  Nexteq PLC  15 January 2025

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.

 

15 January 2025

Nexteq plc

("Nexteq" or the "Group")

 

Trading Update and Notice of Results

 

Nexteq (AIM: NXQ), a leading technology solutions provider to customers in
selected industrial markets, today provides an update on trading for the
financial year ended 31 December 2024 ("FY24").

 

Trading performance

The Board confirms that trading for 2024 was in line with expectations, as set
out in the 31(st) October 2024 update. Group revenue is expected to be $86.7m
(FY23: $114.3m), reflecting a backdrop of economic challenges across the
markets, and wider industry de-stocking, as well as the delay of several
customer projects into the new 2025 budget year. As predicted, gross margin
performance was maintained through Q4 at historically high levels, but with a
reducing run rate, with operating costs reducing as expected. As a result,
full year adjusted profit before tax is expected to be in line with market
expectations(1).

The Quixant Gaming business posted revenues of $54.8m, 21% down against the
$69.2m recorded in 2023, largely driven by reduced volume of sales of Gaming
Hardware Platforms to the largest customers, as they faced challenges in their
own market. The Industrial displays business, Densitron, achieved revenues of
$31.9m, 29.3% down against the $45.1m recorded in 2023.  This was driven by
continued de-stocking and the impact of end-of-life components in 2023.

Financial position

Net cash on 31st December 2024 was $29.1m (FY23: $27.9m), in line with Board
expectations and reflecting continued healthy operating cash flow generation.
The Group's share buyback programme returned $6.7m of cash to shareholders in
the second half of 2024, resulting in the cash balance reducing from $36.9m at
HY24.

Outlook

The Board expects revenues in 2025 to be broadly in line with 2024, and with a
reduced margin due to short-term pricing pressure and investment in market
strategy for key opportunities in the Gaming sector.  Following a business
restructuring in Q4 2024, operating costs have been reduced by $1.6m and
refocussed on the areas of the business driving new product development and
new business wins.  With significant secured business wins across the Group
for 2025, the Board expects positive movements in order book generation to be
seen through 2025, and into 2026.

Notice of Results

The Group expects to report its full year results for 2024 on 19(th) March
2025.

Duncan Faithfull, Chief Executive Officer of Nexteq plc, commented: "2024 was
a year of unprecedented change within our organisation, and significant
challenges in our markets.  The continued de-stocking within our customer
base, alongside continuing economic uncertainty impacted our revenues.  The
newly installed Senior Leadership Team (SLT) has conducted a strategic review
of the business and are now focussed on the delivery of a plan designed to
deliver a diversified group, and a significant improvement in profitability.

In Q4 2024 The SLT structured the business to focus on our core objectives and
is now focussed on delivering the key milestones of a three-year plan that
will deliver significant growth, driven by organic growth within our current
product suite, alongside M&A activity to accelerate the growth in our
target market verticals, utilising the robust financial position built in
recent years.

2024 has been a tough trading year, but with the new structure, leadership and
three-year plan, we are excited about the potential to deliver significant
growth."

 

(1) The range of forecasts for the year ended 31 December 2024 at the date of
this announcement is revenue of between $84.5m and $85.5m with a consensus of
$85.0m with consensus adjusted profit before tax of at least $6m.

 

 Nexteq plc                                        Tel: +44 (0)1223 892 696

 Duncan Faithfull, Group Chief Executive Officer

 Matt Staight, Group Chief Financial Officer

 Nick Jarmany, Interim, Chair

 Nominated Adviser and Broker:                     Tel: +44 (0)20 7220 0500

 Cavendish Capital Markets Ltd

 Matt Goode / Teddy Whiley (Corporate Finance)

 Tim Redfern / Harriet Ward (ECM)

 Joint Broker:                                     Tel: +44 (0)20 7523 8000

 Canaccord Genuity Limited

 Simon Bridges / Andrew Potts

 Financial PR:                                     Tel: +44 (0)20 3405 0205

 Alma Strategic Communications

 Hilary Buchanan / Kieran Breheny

 

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 (http://www.nexteqplc.com) .

 

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