Nasstar's H1 revenue rises in line with expectations

Nasstar, a provider of hosted managed and cloud computing services, reported a rise in half year revenue as the company was trading in line with management expectations.

For the six months ended 30 June, revenue grew 22% £8.08m, compared to the same period last year, which resulted in a 21% rise in gross profit to £5.6m.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 14% to £1.5m.

Monthly recurring revenue run rate increased by 6% to £1.23m and the company said an additional £17,000 per month of signed recurring revenue will impact results from the second half of the year.

Adjusted earnings per share was maintained at 0.3p and basic loss per share was also kept at 0.1p.

Net debt narrowed by about 4% to £4.9m.

The AIM listed company said Vesk, the UK’s largest managed cloud computing provider which was bought in October 2015, was progressing and should be fully integrated by the second half of the year.

Chief executive Nigel Redwood, said: "The first half of the year has progressed positively with trading in line with management expectations. I am pleased to report a healthy level of growth in the monthly recurring revenue base, running at 6% during the first half reflecting the benefits of some of the new management initiatives we have taken.”

He added that the company is optimistic for the second half of the year and it was progressing in line with full year expectations.

During the six months, the company secured hosted desktop contracts in the legal and recruitment sectors while cross-selling its new public cloud integrated services to other customers.

Nasstar's development of the sub-board management layer and the new single brand has positioned the company to act on synergy opportunities presented.

The company also launched a marketing plan which involved Nasstar being redesigned and re-launched.

Since the end of June the company has raised £13.3m through a share placing to fund the acquisition of Modrus, a hosted managed services specialist, and to reduce net debt. The pro forma net debt position following the placing and acquisition was £3.5m.

Redwood said Modrus adds markets which they are not currently active in including media, property services and independent software vendors.