REG - Nexus Infrastructure - FY23 Trading Update

Nexus InfrastructureAnnouncement

03/10/2023 07:00

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RNS Number : 4452O  Nexus Infrastructure PLC  03 October 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE
MARKET ABUSE REGULATION

 

3 October 2023

 

Nexus Infrastructure plc

("Nexus" or the "Group")

 

FY23 Trading Update

 

Nexus (AIM: NEXS), a market-leading provider of civil engineering
infrastructure services to the UK housebuilding sector through its operational
business, Tamdown, provides an update on trading for the 12 months ended 30
September 2023 (FY23).

 

Nexus previously reported a one-off impact due to ilke Homes going into
administration. The Group is currently operating in challenging market
conditions, and whilst there were signs of encouragement at the half-year from
a number of housebuilders, housebuilding activity has slowed in the second
half of the year as developers continue to navigate high inflation and
increased interest rates. On an underlying basis 1 , Nexus expects to report
FY23 revenue of approximately £85 million and an operating loss in the range
of £6 - £7 million. This is lower than the Board's previous expectations and
is a result of ilke Homes, lack of new order activity due to difficult
market-wide conditions, up-front costs in relation to rightsizing the Group's
resources and a prudent approach on aged customer debt where a significant
portion has been written off.

 

The Nexus Board and Tamdown management team have responded proactively to the
current subdued market activity, with various mitigating actions taken to
protect the Group, including:

 

·    reducing Nexus's overheads by £0.8 million to a run rate of £1.7
million per annum;

·    reducing more expensive hired plant on-site in favour of
predominantly owned machinery;

·    reducing Tamdown's agency staffing; and

·    an ongoing consultation with Tamdown's site-based workforce for a
c.25% reduction in headcount.

Notwithstanding this, the Group remains confident that the housebuilding
sector will recover, not only due to the chronic undersupply of housing, but
also because of engagement with its longstanding customers.

 

Nexus is well placed to benefit when housebuilding output improves, with its
established offering, expert team, and reputation for high‑quality delivery
of essential services.

 

As at 30 September 2023, Tamdown's order book had reduced to £46 million
which reflects the lack of new order intake and extended procurement cycles
across the wider housebuilding industry. In the coming months, we expect the
order book to significantly increase based on a number of live conversations
with customers.

 

Nexus has a robust balance sheet with cash and cash equivalents of £14.6
million at the FY23 period end and the Board expects to pay a final dividend.

 

Charles Sweeney, Chief Executive of Nexus, commented: "Whilst we face
challenging market conditions, we have taken decisive action to respond and
rightsize the business. The strength and quality of our offering and strong
financial footing mean we are well-placed to return to a growth trajectory
when the housebuilding market improves."

 

Enquiries

 Nexus Infrastructure plc                  Tel: 01376 559 550
 Charles Sweeney, Chief Executive Officer
 Dawn Hillman, Chief Financial Officer

 Numis Securities Limited                  Tel: 0207 260 1200

 (Nominated Adviser & Broker)
 Oliver Hardy (Nomad)
 Heraclis Economides
 Hannah Boros

 Alma                                      Tel: 0203 405 0205

 (Financial Public Relations)
 Justine James

Hannah Campbell

 

Notes to Editors

Nexus is a market-leading provider of civil engineering infrastructure
services to the UK housebuilding sector through its operational business,
Tamdown.

 

Tamdown provides a range of civil engineering and infrastructure services to
the UK housebuilding sectors, with operations focused on the South-East of
England and London. It has an established market-leading position, having been
in operation for over 45 years.

 

www.nexus-infrastructure.com
(https://protect.checkpoint.com/v2/___http:/www.nexus-infrastructure.com/___.YzJlOm5leHVzaW5mcmFzdHJ1Y3R1cmVwbGM6YzpvOmM5NDIwODQ1MmMxZGM2NzdlNWE2NDIxMTUxNmY4MThmOjY6YTE2NDphMzQ0NTFiMzA2OTY3MGUyNTM0YTQ5YjQ2NzViNzRkMDExMjg4YmM0NGVjMDZkZjFhY2I2NmJlOWRiN2NiMDZjOnA6VA)

 1  Relating to continuing operations for Nexus and Tamdown (excluding
TriConnex and eSmart Networks).

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