REG - Nexus Infrastructure - Preliminary Full Year Results
07/03/2024 07:00
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RNS Number : 9016F Nexus Infrastructure PLC 07 March 2024
7 March 2024
Nexus Infrastructure plc
("Nexus" or the "Group")
Preliminary results for the year ended 30 September 2023
Strong balance sheet, well positioned for market upturn
Nexus Infrastructure plc (AIM:NEXS), a leading provider of essential
infrastructure solutions, announces its preliminary results for the year ended
30 September 2023 (FY23).
Commenting on the year in review, Charles Sweeney, Chief Executive Officer of
Nexus, said:
"FY23 was a year of change for Nexus, following the successful sale of two
subsidiaries and the return of £60.5m to shareholders. During the second half
of the year, we restructured the Group and its support framework, introduced
improvements to processes and reduced costs in line with our strategy. With a
strong balance sheet, a loyal customer base and a committed team, we are well
placed for the future.
"The Group's main trading subsidiary, Tamdown, provides a range of civil
engineering solutions to the UK housebuilding sector. Market conditions
significantly deteriorated in H2 as the major developers made cuts to their
budgets and postponed new project activities. ilke Homes entering into
administration was a high-profile example of the turbulence in the sector and
Tamdown was significantly impacted by this failure. Decisive actions were
taken to right-size the business, in order to protect and improve margins and
to ensure we are well-positioned to return to a growth trajectory when the
housebuilding market rebounds.
"Our strong balance sheet continues to underpin our stability. FY24 has
started in line with the Board's expectations and the order book has grown by
24%, from the year end position, by the end of January 2024. The horizon
presents several new opportunities, a testament to the strength of our
offering, providing confidence in the long-term success of the Nexus Group."
Financial summary
· Continuing revenue(1) of £88.7m (2022: £98.4m) of which Tamdown
delivered £87.9m (2022: £98.4m), reflecting the continued challenging wider
economic environment and the slowdown in housebuilding activity.
· Operating loss of £8.4m (2022: £0.3m) including exceptional items
of £0.6m (2022: £0.0m) with the decrease in profitability impacted by ilke
Homes entering administration.
· Earnings per share(2) (basic) of 239.0p (2022: 6.0p). (3)
· Order book(4) at the year end 30 September was £46.0m (2022:
£95.5m) reflecting a resilient performance during a year of exceptionally
challenging market conditions. As at 31 January 2024, a number of key new
contract awards had been secured, increasing the order book to £57.2m.
· A robust balance sheet as the Group's cash(5) remained high at
£14.6m (2022: £4.6m).
· Final dividend of 2.0p, bringing full year dividend to 3.0p.
· Net assets remain strong following sale of TriConnex and eSmart
Networks subsidiaries at £33.0m (2022: £34.1m).
1. Excluding discontinued operations being TriConnex and eSmart Networks which
were disposed in February 2023.
2. Continuing operations (being Tamdown as the main trading subsidiary of the
Group) including the profit on disposal on the sale of TriConnex and eSmart
Networks.
3. Variation is as a result of the capital return by way of Tender Offer
(following the sale of TriConnex and eSmart), which on completion in February
2023 resulted in the cancellation of the associated Ordinary Shares.
4. Secured work yet to be carried out for continuing operations.
5. Cash and cash equivalents less borrowings for continuing operations.
Strategic highlights
· Disposal of TriConnex and eSmart Networks in February 2023
returning £60.5m to shareholders, realising the inherent value of these
businesses and ensuring Tamdown is well capitalised for the future.
· Completed a restructuring to reflect the new requirements of the
Group and to benefit from a reduction in costs where possible.
· Cost controls implemented, while maintaining customer engagement
in the current economic environment to support future growth.
· Group is well positioned to innovate and leverage know-how across
Nexus.
Outlook for FY24 and beyond
The fundamental market growth drivers for the Group remain positive as the
UK's housing market has been in a long-term position of structural undersupply
for many years. Tamdown continues to focus on customer service, winning
high-quality contracts with longstanding customers, and improving operating
margins.
Tamdown's refreshed position and the Group's strong financial footing mean
Nexus is well-placed to return to a growth trajectory when the housebuilding
market improves.
Market sentiment anticipates a recovery in the housebuilding market over the
next 18 months. Tamdown's services, capabilities and expertise form the
principal element of activities at the start of new developments and will
therefore feature early when conditions in the housebuilding sector improve.
The Board will continue to review a range of future growth options to deliver
expansion and diversification opportunities, to take full advantage of the
Group's capabilities and experience.
Nexus Infrastructure will be hosting its Annual General Meeting at 9:00am on
27 March 2024 at Nexus Park, Avenue East, Skyline 120, Great Notley,
Braintree, Essex, CM77 7AL.
The Directors have made arrangements to enable shareholders to either attend
the meeting in person or virtually. To attend virtually, shareholders must
pre-register by contacting the Company Secretary by
email: investors@nexus-infrastructure.com
(mailto:investors@nexus-infrastructure.com) .
For more information, please contact:
Nexus Infrastructure plc via Alma
Charles Sweeney, Chief Executive Officer
Dawn Hillman, Chief Financial Officer
Deutsche Numis (London) Tel: 0207 260 1200
(Nominated Adviser & Broker)
Oliver Hardy (Nomad)
Heraclis Economides
Hannah Boros
Alma Strategic Communications Tel: 0203 405 0205
Justine James nexus@almastrategic.com
Hannah Campbell
Will Merison
Notes to Editors
Nexus is a market-leading provider of essential infrastructure solutions.
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___.YzJlOm5leHVzaW5mcmFzdHJ1Y3R1cmVwbGM6YzpvOmUzODFiMDAzMjhhNmE5NDlhNzU0OTllMDA1NmUxNWEwOjY6N2I4NTozOGVhNDdkMTYwMjZkOTQwZmY4YzVjOGE1YmVlZjY4OTgwNTc2YTM1ZTMxMGJhN2FkZWU2MjBlMWFiMTE2YzNkOnA6VA)
Chairman's statement
Overview of the year
It has been a year of significant change for Nexus with the successful sale of
TriConnex and eSmart Networks in February 2023, which saw the return of
£60.5m via a tender-offer process to shareholders and crystallised the
inherent value of these businesses as well as helping to ensure that the Group
was well capitalised for the future. The strategic disposal marked an
important step change for the Group. As a Board, we are extremely proud of the
team's hard work and commitment to achieving a successful outcome. Following
the disposal, Mike Morris and Alan Martin stepped down from their respective
roles as CEO and CFO. We would like to thank them for their significant
contributions in completing the disposal and for their leadership in driving
the development of Nexus during their time with the Group. Mike will continue
to provide input and guidance to the Board in his role as a Non-Executive
Director.
Following the completion of the sale, Tamdown became the main trading business
of Nexus. The business navigated a challenging market and performed well in
the first half, successfully growing revenues and profit, securing new work,
and maintaining a good order book despite the difficult environment. The
widely expected market upturn in the second half did not materialise and
housebuilding activity in fact, slowed significantly. The decline in house
sales negatively impacted several of Tamdown's customers, resulting in a
significant reduction in new housing developments. ilke Homes, filed for
administration in June 2023, causing a material one-off impact on the
business. In response to the declining market conditions, the team carried out
an operational review and implemented a range of cost management measures and
decisions to right size the business. This has now been completed and it
ensures we are well placed to benefit when housebuilding output improves
again.
As a Board, we remain confident in the strength of Tamdown and its ability to
deliver once market conditions normalise. We believe that there is a positive
outlook for the housebuilding sector in the future due to the chronic
undersupply of good-quality housing across the UK.
Board and governance
Upon completion of the sale of TriConnex and eSmart Networks, we welcomed
Charles Sweeney to the Nexus Board as CEO and Dawn Hillman as CFO, to lead the
Group. Both have deep knowledge and experience in the leadership of
construction businesses, including a collective total of 43 years with the
Group. Since their appointment, they have played a crucial role in
transitioning the Group and ensuring that Tamdown is effectively organised for
current market circumstances and has the foundations in place for growth as
conditions improve. The Board and the management team are also developing a
refreshed strategy, to ensure the Group remains a high-quality business,
continues to grow over the long-term, and delivers diversification
opportunities, taking full advantage of the Group's capabilities and
experience.
Post-period end, after seven and a half years as a Non-Executive Director, we
announced that Alex Wiseman will not stand for re-election at the forthcoming
AGM in March 2024 and will step down from the Board. Alex has had a huge
impact on the Group since he was appointed in June 2016 and played a pivotal
role in the growth of the business and the successful disposal of TriConnex
and eSmart Networks. We wish him all the very best for the future.
A primary driver of Nexus' success is the team of highly skilled, driven, and
loyal employees across the Group. Nexus places great importance on engaging
with and developing its employees and providing a platform for personal growth
and successful career development. On behalf of the Board, I would like to
congratulate and thank our employees for their continued hard work and
dedication throughout the year.
Dividend
Nexus continues to operate with a robust balance sheet, with net cash of
£14.6m at year-end. The Board intends to recommend the payment of a final
dividend of 2.0p per share.
Stakeholder engagement
The Board recognises the importance of stakeholder engagement to the long-term
success and sustainability of our business. The Group is committed to
developing effective dialogue and relationships with all stakeholder groups
and the Board continually develops our business using learnings from these
interactions.
We remain focused on our mission to be recognised as the leading provider of
essential infrastructure solutions in the UK, by delivering outstanding
performance through a focus on delivery, customer service and diversification;
stakeholder engagement helps us to achieve this.
Sustainability
At the heart of our purpose, Building Bright Futures, is a commitment to
sustainability - for our people, communities, and the planet. Nexus and our
people continue to challenge assumptions across our operations and find better
ways to ensure quality delivery while also improving our sustainability as a
business.
Our dedication to Health & Safety was recognised by the Royal Society for
the Prevention of Accidents (RoSPA) with Tamdown receiving its 14(th)
consecutive Gold Award and the RoSPA President's award. We also launched a
bespoke Behavioural Safety Programme to influence actions towards safer
outcomes.
We continued our wellbeing initiatives to support our people, as well as our
volunteering scheme and fundraising efforts to support the communities we
operate within.
Our teams are working to continuously improve our and our customers' journeys
to; lower emissions, decrease carbon footprint and reduce the environmental
impact of project operations. During the year Tamdown undertook a Plant
Renewal Programme investing in new machinery to improve fuel and other
efficiencies. We also adopted a greener fleet to reduce our emissions, and
worked with suppliers at our Nexus Park head office to improve our waste
management and energy consumption.
We see sustainability as a journey for our business alongside our customers
and suppliers, and it is a journey we are fully committed to.
Summary and outlook
The Group has taken effective mitigating actions during the year and continues
to be committed to protecting and improving margins to ensure we are
well-positioned to support established and new customers when market
confidence returns. The balance sheet has remained resilient, which was
particularly demonstrated in the second half of the year, and continues to
support us in FY24. Despite the challenging environment, the
long-term fundamental market growth drivers for Tamdown are positive. The
housing market has been in a long-term position of structural undersupply and
the recent downturn in new housebuilding is only exacerbating the situation.
Trading in the first quarter of FY24 is in line with the Board's expectations.
There are several new opportunities on the horizon, reflecting the strength of
our offering and the value Tamdown brings to its customer base, providing
confidence in the long-term success of Nexus.
Richard Kilner
Non-Executive Chairman
Executive review
This year has been one of change. Following the sale of TriConnex and eSmart
Networks in February 2023, a new management team is now in place, and we have
made a number of adjustments in Tamdown, including reducing overhead, plant
and labour costs, to reflect the subdued market conditions in the
housebuilding sector. Tamdown is now well placed to benefit fully from the
upturn in the sector which the market expects in the years ahead. In parallel
, we are developing our strategy that will deliver a path of long-term
sustainable growth for the Group, to deliver expansion and diversification
opportunities, to take full advantage of the Group's capabilities and
experience.
The sale of TriConnex and eSmart Networks returned £60.5m via a tender-offer
process to shareholders and ensured that the Group was well capitalised for
the future. However, Tamdown subsequently faced a significant decline in
market conditions and the expected upturn in the housebuilding sector in the
second half of 2023 did not materialise. Housebuilding activity slowed
dramatically in an environment of high inflation and elevated interest rates.
There were several high-profile 'casualties' during the year, including the
modular housebuilder, ilke Homes which entered into administration and was
formally liquidated with unpaid debts in excess of £300m. Tamdown had been
working on two projects for ilke Homes.
Tamdown's order book was £46.0m at year-end. Since then, Tamdown has
continued to focus on customer service, winning high-quality contracts, and
improving gross margins. By the end of January 2024 , a number of key new
contract awards had been secured, increasing the order book to £57.2m.
Overall, the Group revenues for the continuing operations for FY23 were
£88.7m (2022: £98.4m) with an operating loss of £8.4m (2022: £0.3m)
including exceptional items of £0.6m.
Nexus has a robust balance sheet with cash and cash equivalents of £14.6m at
the FY23 year-end (2022: £4.6m). Having taken the prudent actions mentioned
above, the Board is confident that the Group is well-positioned to fully
benefit from the widely anticipated improvement in the residential
housebuilding market.
Operational update: Nexus Infrastructure
Following the sale of TriConnex and eSmart Networks, a 'Transition Project'
was implemented to ensure these subsidiaries were separated from the Group in
an efficient and orderly way.
The Nexus organisation was restructured to reflect the new requirements of the
Group and to benefit from a reduction in costs where possible. A review of our
external service providers was undertaken with new arrangements introduced as
necessary. This included the appointment of new auditors (MHA) and financial
PR company (Alma Strategic Communications).
The Group also considered if it would be appropriate to change its banking
arrangements. After a detailed evaluation process, we were pleased to secure
Barclays as an additional banking services provider.
Operational update: Tamdown
Tamdown provides a range of essential civil engineering and infrastructure
solutions to the UK housebuilding sector. These services include earthworks,
building highways, substructures and basements, and installing sustainable
drainage systems. It has an established market-leading position having been in
operation for over 45 years. It is particularly recognised for its experience
and capabilities in the safe delivery of large, complex, multi-phase
developments. It has a strong brand and a loyal customer base.
Tamdown's performance in Health & Safety was again recognised by the Royal
Society for the Prevention of Accidents (RoSPA), receiving a Gold Award for
the 14th consecutive year. Tamdown was also awarded the RoSPA President's
Award. A Behavioural Safety programme was rolled out across the business and
this, along with a number of other initiatives, was used to proactively
protect the health and safety of our site and office personnel and all those
working at or visiting our facilities. Tamdown's Accident Incidence Rate (AIR)
for the year was 122 (2022: 369). By comparison, the Health and Safety
Executive's figures, published in November 2023, state that the equivalent
average for the UK construction industry overall in 2022/23 was 296.
During the first half of the year, Tamdown won work from several customers,
leveraging its strong relationships and reputation for quality delivery.
However, in the second half, the major housebuilders experienced a material
decline in new house sales and, as a result, significantly reduced the award
of new projects. As noted above, there were several high-profile 'casualties'
during the year, including the modular housebuilder, ilke Homes which entered
into administration and thereafter was formally liquidated with unpaid debts
in excess of £300m. Tamdown had been working on two projects for ilke Homes
and, as an unsecured creditor, debts of £2.9m went unpaid, impacting
Tamdown's profits and cash collection. There were further impacts due to the
removal of work in progress and the future expected revenues listed in the
order book.
Tamdown's order book was £46.0m (2022: £95.5m) at the year-end but,
following the award of a number of new projects post period-end, the order
book by the end of January 2024 had improved to £57.2m.
At the end of FY23, we implemented a restructuring of our organisation to
reduce costs and to position the business for recovery when the inevitable
market upturn takes place. We have maintained our reputation and relationships
with our supply chain, this loyalty is in line with our values and we expect
will be returned in-kind as we return to growth.
Financial Review
Revenue and profits
Revenue for the Group (for continuing operations) decreased to £88.7m (2022:
£98.4m). Tamdown's revenue decreased to £87.8m (2022: £98.4m), reflecting
the challenging market for housebuilders in the second half.
Gross profit for the Group (for continuing operations) decreased to £6.0m
(2022: £9.9m). The gross profit margin for Tamdown decreased to 5.8% (2022:
17.4%) reflecting the significant impact of Ilke Homes on profitability.
Administrative expenses for the Group (for continuing operations) increased in
the year to £10.8m before exceptional items (2022: £10.2m). The
exceptional items for the year relate to restructuring costs.
The Group's operating loss, for the year was £8.4m (2022: £0.3m). The sale
of TriConnex and eSmart Networks generated profits of £67.3m taking the
profit attributable to equity holders of the parent company to £58.8m (2022:
£2.7m).
The net finance charge for the year totalled £0.16m (2022: £0.6m). Interest
received on bank deposits increased to £0.4m (2022: £0.0m) due to the
increase in interest rates. Interest payable on bank borrowings was £0.0m
(2022: £0.2m) due to borrowings being settled in 2022. Interest on lease
liabilities of £0.6m (2022: £0.4m) increased due to lease liabilities
increasing following the sale and leaseback of Nexus Park.
Tax
The Group recorded a tax charge for the year of £(0.05)m (2022 £0.1m)
representing an effective tax rate of 22% (2022 21.5%). The income tax
expense relates to continuing operations
Strong balance sheet and cash
The Group continues to maintain a strong balance sheet with shareholders'
funds increasing during the year to 30 September 2023 to £33.0m (2022:
£34.1m) the movement representing the trading performance of the Group less
the payment of dividends totalling £0.09m and the return to shareholders of
£60.5m following the sale of TriConnex and eSmart Networks.
The cash and cash equivalents balance at 30 September 2023 was £14.6m (2022:
£4.6m). Operating cash outflows before working capital movements were
£5.9m (2022: inflows £1.5m). Working capital decreased during the year by
£7.2m (2022: £2.9m outflow).
Tax and interest payments amounted to £0.1m (2022: £0.8m). Cash generated
from investing activities totalled £60.2m (2022: £11.9m).
Net cash outflows from financing activities totalled £62.1m (2022: £14.0m)
with £1.5m of lease repayments, £0.09m (2022: £1.1m) on dividend payments,
and £60.5m on returns to shareholders following the sale of TriConnex and
eSmart Networks.
The Group introduced a new banking relationship with Barclays in the year
alongside its ongoing relationship with Allied Irish Bank ("AIB"), a good
indicator of the strength of the business. The facilities provided by AIB
including the undrawn revolving credit facility of £5.0m, and an associated
accordion of £5.0m were cancelled in the year as these are no longer
considered to be required by the business.
Order book
The order book stood at £46.0m (2022: £95.5m), which the board considers to
reflect a resilient performance during a year of exceptionally challenging
market conditions. By the end of January 2024, a number of key new contract
awards had been secured, increasing the order book to £57.2m.
Treasury risk management
The Group's cash balances are centrally pooled and invested, ensuring the best
available returns are achieved, consistent with retaining liquidity for the
Group's operations. The Group deposits funds only with financial institutions
which have a minimum short-term credit rating of A. As the Group operates
wholly within the UK, there is no requirement for currency risk management.
Market Update
The fundamental market growth drivers for the Group remain positive. The UK's
housing market has been in a long-term position of structural undersupply for
many years and the number of new houses being built has failed to keep pace
with the rate of household formation. This structural undersupply provides us
with confidence that our housebuilding customers will continue to demand our
quality services when conditions normalise.
Market sentiment is that there will be a recovery in the housebuilding market
over the next 18 months. Tamdown's services, capabilities and expertise form
the principal element of activities at the start of any new development and
will therefore feature early in the cycle when the market upturn takes place.
Summary and outlook
FY23 was a year of significant change for the Group, with Tamdown now the
primary operating business of Nexus. Whilst Tamdown operated in difficult
market conditions, we took decisive action to respond and right-size the
business. As a result of this, along with our strong financial footing, we are
well-placed to return to a growth trajectory when the housebuilding market
improves.
It has been widely reported that market conditions in the UK are expected to
improve over the next 18 months, which alongside our long-standing
relationships, a loyal and dedicated team, strong management of cash, and a
range of potential strategic opportunities, means we can look to the future
with confidence.
Charles Sweeney
Chief Executive Officer
Dawn Hillman
Chief Financial Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2023 2022
Note £'000 £'000
Continuing operations
Revenue 2 88,691 98,392
Cost of sales (82,719) (88,482)
Gross profit 5,972 9,910
Administrative expenses (10,779) (10,225)
Impairment Loss (2,935) -
Operating loss before exceptional items (7,742) (315)
Exceptional items 4 (645)
Operating loss (8,387) (315)
Finance income 5 447 13
Finance expense 5 (599) (607)
Loss before tax (8,540) (909)
Taxation 6 46 (109)
Loss from continuing operations (8,494) (1,018)
Discontinued operations
Profit from discontinued operations (after tax) 11 67,292 3,729
Profit and total comprehensive income for the year attributable to equity 58,799 2,711
holders of the parent
Earnings/(losses) per share (p per share)
Basic (p per share) - total operations 8 238.96 5.96
Diluted (p per share) - total operations 8 238.96 5.89
Basic (p per share) - continuing operations 8 (34.52) (2.24)
Diluted (p per share) - continuing operations 8 (34.52) (2.24)
Basic (p per share) - discontinued operations 8 273.48 8.20
Diluted (p per share) - discontinued operations 8 273.48 8.10
There are no recognised gains and losses other than those shown in the income
statement above and therefore no separate statement of other comprehensive
income has been presented.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2023
Group Group
2023 2022
Note £'000 £'000
Non-current assets
Property, plant and equipment 9 5,377 5,459
Right of use assets 10 11,435 12,620
Goodwill 2,361 2,361
Investments in subsidiaries
Deferred tax asset
Total non-current assets 19,173 20,440
Current assets
Inventories 44 43
Trade and other receivables 24,135 30,388
Contract assets 2,784 8,120
Corporation tax asset 27
Cash and cash equivalents 14,626 4,597
41,589 43,175
Assets classified as held for sale 11 57,411
Total current assets 60,763 100,586
Total assets 60,763 121,026
Current liabilities
Trade and other payables 15,540 21,698
Contract liabilities 552 3,543
Lease liabilities 1,826 1,663
Corporation tax liability 18
17,936 26,904
Liabilities associated with assets classified as held for sale 11 49,094
Total current liabilities 17,936 75,998
Non-current liabilities
Lease liabilities 9,818 10,793
Deferred tax liabilities 95
Total non-current liabilities 9,818 10,888
Total liabilities 27,754 86,886
Net assets 33,010 34,140
Equity attributable to equity holders of the Company
Share capital 181 911
Share premium account 9,419 9,419
Retained earnings 23,410 23,810
Total equity 33,010 34,140
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Share Share Retained Total
capital premium account earnings
Note £'000 £'000 £'000 £'000
Equity as at 1 October 2021 908 9,419 21,805 32,132
Profit for the period 2,711 2,711
Total comprehensive income for the period 2,711 2,711
Transactions with owners
Dividend paid 7 (1,091) (1,091)
Share-based payments 385 385
Issue of share capital 3 3
3 (706) (703)
Equity as at 30 September 2022 911 9,419 23,810 34,140
Profit for the period 58,799 58,799
Total comprehensive income for the period 58,799 58,799
Transactions with owners
Dividend paid 7 (90) (90)
Share buyback (743) (59,808) (60,551)
Share-based payments 700 700
Issue of share capital 13 13
(730) (59,198) (59,929)
Equity as at 30 September 2023 181 9,419 23,410 33,010
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Group Group
2023 2022
Note £'000 £'000
Cash flow from operating activities
(Loss)/Profit before tax continuing operations 58,753 3,454
Adjusted by:
Gain on sale of subsidiaries (67,292)
Profit on disposal of property, plant and equipment - owned (573)
Share-based payments 700 385
Finance expense (net) 5 152 588
Depreciation of property, plant and equipment - owned 9 726 833
Depreciation of property, plant and equipment - right of use 10 1,618 1,215
Operating profit before working capital changes (5,917) 6,475
Working capital adjustments:
Decrease/(Increase) in trade and other receivables 6,949 (7,384)
Decrease/(Increase) in contract assets (91) (6,818)
(Increase) in inventory (744) (430)
(Decrease)/Increase in trade and other payables (7,398) 4,155
(Decrease)/Increase in contract liabilities (59) 1,565
Cash (used in)/generated from operating activities (7,260) (2,437)
Interest paid 5 (599) (244)
Taxation paid 242 (550)
Net cash (used in)/generated from operating activities (7,617) (3,231)
Cash flow from investing activities
Purchase of property, plant and equipment - owned 9 (759) (795)
Purchase of property, plant and equipment - right of use 10 (1,088)
Proceeds from disposal of property, plant and equipment - owned 9 1,408 13,555
Sale of available for sale investments
Sale of discontinued operations 11 60,168
Interest received 5 447 39
Net cash generated from/(used) in investing activities 60,176 12,799
Cash flow from financing activities
Dividend payment 7 (90) (1,091)
Draw down of HP facility 587
Sharebuy back (60,551)
Repayment of term loan (11,663)
Principal elements of lease repayments (1,472) (2,753)
Net proceeds from the issue of share capital 13 3
Net cash (used in)/generated from financing activities (62,100) (14,917)
Net change in cash and cash equivalents (9,542) (5,349)
Cash and cash equivalents at the beginning of the year 24,168 29,517
Cash and cash equivalents at the end of the year 14,626 24,168
Reconciliation of cash and cash equivalents at the end of the year
Held by continuing operations 14,626 4,597
Held by discontinued operations 19,571
Cash and cash equivalents at the end of the year 14,626 24,168
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1. Accounting policies
The financial information does not constitute the Company's financial
statements for the years ended 30 September 2023 or 2022 but is derived from
those statements. Financial statements for 2022 have been delivered to the
Registrar of Companies and those for 2023 will be delivered following the
Company's General Meeting in April 2024.
While the financial information included in this preliminary announcement have
been prepared in accordance with UK adopted International Accounting Standards
and with the requirements of the Companies Act 2006 as applicable to companies
reporting under those standards, this announcement itself does not contain
sufficient information to fully comply with those Standards.
The accounting policies used to prepare these preliminary results are the same
as those used in the preparation of the Group's audited accounts for the year
ended 30 September 2022 which have been delivered to the registrar of
Companies.
2. Revenue
Revenues from external customers for continuing operations are generated from
the supply of services relating to civil engineering and construction
contracts. Revenues from external customers for discontinued operations are
generated from the supply of design, installation and connection of
multi-utility networks, and energy transition projects. Revenue is recognised
in the following operating divisions:
2023 2023 2023
Continuing Operations Discontinued Operations Total
£'000 £'000 £'000
Segment revenue 88,691 23,484 112,175
Inter-segment revenue
Revenue from external customers 88,691 23,484 112,175
Timing of revenue recognition
Over time 88,691 23,484 112,175
Customer type
Residential 87,839 17,992 105,831
Non-residential 852 5,492 6,344
88,691 23,484 112,175
2022 2022 2022
Continuing Operations Discontinued Operations Total
£'000 £'000 £'000
Segment revenue 98,392 75,011 173,403
Inter-segment revenue
Revenue from external customers 98,392 75,011 173,403
Timing of revenue recognition
Over time 98,392 75,011 173,403
Customer type
Residential 98,392 55,670 154,062
Non-residential 19,341 19,341
98,392 75,011 173,403
3. Segmental analysis - Income Statement
The Group has one operating division under the control of the Executive Board,
which is identified as the Chief Operating Decision Maker as defined under
IFRS 8: Operating Segment:
· Tamdown
All of the Group's operations are carried out entirely within the United
Kingdom.
The results for TriConnex and eSmart Networks have been presented as
discontinued under IFRS 5, with the Tamdown and Group administration expenses
comprising the continuing operations below. The related assets and liabilities
of these operations have been similarly presented.
Segment information about the Group's operations is presented below:
2023 2022
£'000 £'000
Revenue from continuing operations
Tamdown 87,839 98,392
Nexus Infrastructure plc 841 -
Nexus Park Ltd 11 -
Inter-company trading
Total revenue from continuing operations 88,691 98,392
Revenue from discontinued operations
TriConnex 17,992 55,670
eSmart Networks 5,492 19,341
Inter-company trading
Total revenue from discontinued operations 23,484 75,011
Total revenue 112,175 173,403
Gross profit from continuing operations
Tamdown 5,120 9,910
Nexus Infrastructure plc 841 -
Nexus Park Ltd 11 -
Total gross profit from continuing operations 5,972 9,910
Gross profit from discontinued operations
TriConnex 4,649 16,319
eSmart Networks 1,256 4,024
Total gross profit from discontinued operations 5,905 20,343
Total gross profit 11,036 30,253
Operating (loss)/profit from continuing operations after exceptional items
Tamdown (6,031) 2,272
Group administrative expenses (2,356) (2,587)
Total operating loss from continuing operations after exceptional items (8,387) (315)
Operating profit/(loss) from discontinued operations after exceptional items
TriConnex 850 5,568
eSmart Networks (1,102) (1,212)
Total operating (loss)/profit from discontinued operations after exceptional (252) 4,356
items
Total operating (loss)/profit after exceptional items (8,639) 4,041
The value of depreciation included in the measure of segment profit is:
2023 2022
£'000 £'000
Tamdown 1,284 814
Group 1,060 733
Total depreciation - continuing operations 2,344 1,547
TriConnex 351
eSmart Networks 150
Total depreciation - discontinued operations 501
Total depreciation 2,344 2,048
4. Exceptional items
2023 2022
£'000 £'000
Continuing operations
Redundancy Costs 645 0
Total 645 0
5. Finance income and expense
2023 2022
£'000 £'000
Finance income
Continuing operations
Interest on bank deposits 447 13
Discontinued operations
Interest on bank deposits 26 26
Finance expense
Continuing operations
Interest on bank loan (186)
Interest on hire purchase agreements (56)
Interest on lease liabilities (543) (421)
(599) (607)
Discontinued operations
Interest on bank loan
Interest on lease liabilities (21) (20)
(21) (20)
Finance expense (net) (152) (588)
6. Taxation
2023 2022
£'000 £'000
Current tax - continuing operations:
UK corporation tax on profits for the year 79
Adjustment in respect of prior periods 50
Total current tax 50 79
Deferred tax - continuing operations:
Origination and reversal of timing differences (34) (94)
Adjustment in respect of prior periods (55) 124
Effect of tax rate change on opening balance (8)
Total deferred tax - continuing operations (96) 30
Total deferred tax (96) 30
Total tax charge (46) 109
The tax assessed for the year is higher than (2022: higher than) the standard
rate of corporation tax as applied in the UK. The differences are explained
below:
2023 2022
£'000 £'000
Profit/(loss) before tax 58,813 3,454
Profit/(loss) before tax multiplied by the respective standard rate of 12,998 657
corporation tax applicable in the UK (22.01%) (2022: 19.0%)
Effects of:
Fixed asset differences (11) (168)
Non-deductible expenses 1,760 229
Income not taxable for tax purposes (16,713)
Other tax adjustments, reliefs and transfers (59)
Chargeable gains/losses (58)
Group income 247
Adjustment in respect of prior periods - current tax 38 (19)
Adjustment in respect of prior periods - deferred tax (55) 124
Remeasurement of deferred tax for changes in tax rates (251)
Movement in deferred tax not recognised 1,999 (22)
Total tax charge (46) 742
Income tax expense from continuing operations (46) 109
Income tax expense from discontinued operations 633
Total tax charge (46) 742
There was no income tax (charged)/credited directly to equity in the year
(2022: £nil).
At the balance sheet date, the Group has unused tax losses of £7.85m (2022:
£0) and other fixed asset and short term temporary differences of £142k
(2022 : £0) available for offset against future profits with an indefinite
expiry period. Based on the projections, there are insufficient future
taxable profits to justify the recognition of a deferred tax asset. On this
basis no deferred tax asset has been recognised in the current year, the
unrecognised deferred tax asset calculated at the substantively enacted rate
in the UK of 25% amounts to £1.99m as at 30 September 2023 (2022: £0).
7. Dividends
Group and Company
2023 2022
£'000 £'000
Amounts recognised as distributions to equity holders in the year:
Interim dividend for the year ended 30 September 2023 of 1.0p per share (2022: 90 456
1.0p per share)
Final dividend for the year ended 30 September 2022 of £nil per share (2021: 635
1.4 per share)
90 1,091
The proposed final dividend for the year ended 30 September 2023 of 2.0p per
share (2022 £nil per share) makes a total dividend for the year of 3.0p (per
share (2022 1.0p per share). The proposed final dividend is subject to
approval by shareholders at a GM and has not been included as a liability in
these financial statements. The total estimated final dividend to be paid is
£180,666
8. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to
equity shareholders of the Company by the weighted average number of shares in
issue for the year.
Diluted earnings per share is calculated by adjusting the weighted average
number of shares in issue for the year to assume conversion of all dilutive
potential shares.
The calculation of the basic and diluted earnings per share is based on the
following data:
2023 2022
£'000 £'000
Weighted average number of shares in issue for the year 24,605,883 45,482,193
Effect of dilutive potential ordinary shares: 0
Share options (number) 0 578,508
Weighted average number of shares for the purpose of diluted earnings per 24,605,883 46,060,701
share
Profit for the year attributable to equity shareholders 58,799 2,711
Basic earnings (p per share) 238.96 5.96
Diluted earnings (p per share) 238.96 5.89
Continuing operations
Loss for the year from continuing operations (8,494) (1,018)
Basic losses (p per share) (34.52) (2.24)
Diluted losses (p per share) (34.52) (2.24)
There are no share options in place so no dilutive effective on the earnings
per share
Discontinued operations
Profit for the year from discontinued operations 67,292 3,729
Basic earnings (p per share) 273.48 8.20
Diluted earnings (p per share) 273.48 8.10
9. Property, plant and equipment
Group Freehold land and buildings Leasehold improvements Plant and machinery Motor vehicles Fixtures and fittings Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 October 2021 16,921 657 1,943 1,040 2,008 22,569
Additions 41 185 196 373 795
Disposals (13,569) (130) (93) (6) (13,798)
Transfer to leasehold improvements (3,393) 3,393
Transfer from right of use assets 232 232
Transfer to assets held for sale (99) (1,008) (491) (1,598)
At 30 September 2022 4,050 2,131 135 1,884 8,200
Additions 183 299 347 829
Disposals (2,826) (54) (68) (2,948)
Transfer from right of use assets 2,384 2,384
At 30 September 2023 4,050 1,872 380 2,163 8,465
Accumulated depreciation
At 1 October 2021 38 657 1,417 585 288 2,985
Charge for the year 137 85 99 119 394 834
Disposals (175) (91) (76) (342)
Transfer from right of use assets 154 154
Transfer to assets held for sale (56) (542) (292) (890)
At 30 September 2022 742 1,523 86 390 2,741
Charge for the year 170 156 33 367 726
Disposals (1,983) (49) (28) (2,060)
Transfer from right of use assets 1,681 1,681
At 30 September 2023 912 1,377 70 729 3,088
Net book value
At 30 September 2021 16,883 526 455 1,720 19,584
At 30 September 2022 3,308 608 49 1,494 5,459
At 30 September 2023 - 3,138 495 310 1,434 5,377
10. Right of use assets and lease liabilities
The Group has leases for freehold property, plant and machinery, motor
vehicles and fixtures and fittings. Leases for freehold property relate mainly
to office properties, whilst the plant and machinery leases are predominantly
large machinery used in site operations.
The statement of financial position shows the following information relating
to right of use assets and leases:
2023 2022
£'000 £'000
Right of use assets
Freehold property 10,217 10,881
Plant and machinery 610 873
Motor vehicles 604 861
Fixtures and fittings 4 5
11,435 12,620
Lease liabilities
Current 1,826 1,663
Non-current 9,818 10,793
11,644 12,456
11. Assets held for sale and associated liabilities, and discontinued
operations
On 30 December 2022, the group announced its intention to dispose of the
subsidiaries TriConnex Ltd and eSmart Networks Ltd.
The associated assets and liabilities were consequently presented as held for
sale in the 2022 financial statements.
The disposal completed on 3rd February 2023 and the former subsidiaries are
reported in the current period as a discontinued operation.
Financial information relating to the discontinued operations for the period
to the date of disposal are set out below.
The financial performance and cash flow information presented are for the four
months ended 31 January 2023 (2023 columns) and the year ended 30 September
2022.
Total TriConnex eSmart Total TriConnex eSmart
2023 2023 2023 2022 2022 2022
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 23,484 17,992 5,492 75,011 55,670 19,341
Expenses (23,795) (16,942) (6,853) 70,655 50,102 20,553
Loss before income tax (312) 1,049 (1,361) 4,356 5,568 (1,212)
Income Tax expense 60 (199) 259 (633) (624) (9)
Loss after income tax of discontinued operation (252) 850 (1,102) 3,723 4,944 (1,221)
Gain on sale of subsidiaries (see below) 67,545
Total gain on sale of subsidiary 67,292
Consideration received: Total TriConnex eSmart
2023 2023 2023
£'000 £'000 £'000
Cash 77,700 - -
Carrying amount of net assets sold 7,746 9,080 (1,333)
Costs related to the sale of the discontinued operations (2,409)
Gain on sale after income tax 67,545 - -
The carrying amounts of assets and liabilities as at the date of sale (3
February 2023) were :
Total TriConnex eSmart Total
2023 2023 2023 2022
£'000 £'000 £'000 £'000
Non-Current Assets
Property, plant and equipment 798 643 155 708
Right of use assets 1,585 1,153 432 1,228
Total non-current assets 2,383 1,796 587 1,936
Current Assets
Inventories 3,625 2,781 844 2,882
Trade and other receivables 14,450 9,210 5,240 15,146
Contract assets 23,232 19,335 3,897 17,805
Corporation tax asset 330 71 259 71
Cash 15,123 14,217 906 19,571
Total current assets 56,760 45,615 11,146 55,475
Total assets 59,143 47,411 11,733 57,411
Current liabilities
Trade and other creditors 15,123 9,633 5,490 16,357
Contract liabilities 34,449 27,322 7,127 31,517
Lease liabilities 513 331 182 382
Corporation tax liability 314 314
Total current liabilities 50,399 37,600 12,799 48,256
Non-current liabilities
Lease liabilities 883 648 235 723
Deferred tax liabilities 115 83 32 115
Total non-current liabilities 998 731 267 838
Total liabilities 51,397 38,331 13,066 49,094
Net assets 7,746 9,080 (1,333) 8,317
12. Events after the reporting year
Group and Company
There are no events after the reporting year to disclose.
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