Nexus Infrastructure revenues improve in full year

The AIM-traded firm said that its “strong” order book had been maintained, with the total standing at £286.4m, compared to £282.0m at the end of the 2020 financial year.

It said it was expecting group operating profit for the full year to be in line with its expectations.

The company’s multi-utility business TriConnex had performed “very well” in the year, delivering both revenue and profit growth.

Revenue for the year exceeded £50m for the first time,making for substantial growth of 29% year-on-year, while continuing to deliver a gross margin of 30%.

The board said the business continued to “thrive”, with the order book increasing during the year to £189m from £185.4m.

Its smart energy business eSmart Networks, meanwhile, gained strong traction during the year with revenue increasing by 370% year-on-year.

Revenue for the year would exceed £10m, and the board said the business would record a small operating profit for the full year, swinging from a 2020 loss of £0.8m.

The order book had increased “substantially” during the year, by £8.3m to £12.1m, or 218%.

Nexus said the business was establishing an “impressive” client base in the electric vehicle charging, industrial electrification and renewable infrastructure sectors, with visibility over a pipeline worth more than £400m.

Its civil engineering business Tamdown saw revenue decrease in the year to £78m, following low levels of contract awards in the Covid-19-impacted 2020, with “significant” inflationary price pressures in its cost base having materialised in the fourth quarter.

The board said it was “pleased” to have completed the sale of Tamdown's former office in the period, recognising a profit on disposal, and so Tamdown was profitable for the year.

Tamdown was successful in winning contracts in 2021, but due to the inflationary environment it was being disciplined on project selection, and as a result the order book had reduced to £85.3m from £92.8m.

The board said the group's strong balance sheet was maintained, with a “high” cash and cash equivalent balance of £29.5m, compared to £32.1m a year earlier, and net cash balances after bank borrowings and lease liabilities of £15.3m, compared to £19.2m.

Nexus’ board said it was in a strong position to deliver organic growth, supported by the structural undersupply in the UK housebuilding market and government stimulus, along with the considerable opportunities within the smart energy sectors.

The group's strong balance sheet and order book left the company “well-positioned” for future growth, particularly within TriConnex and eSmart Networks, where market fundamentals were strong, trading momentum was encouraging, and the government was actively supporting investment into green technologies and infrastructure.

“With a return to profitability and a strong balance sheet, we were pleased to reinstate the payment of dividends in 2021,” said chief executive officer Mike Morris.

“The business has continued to expand, with the completion of our new head office Nexus Park and the opening of an office in Belfast.

“TriConnex and eSmart Networks have performed extremely well in the year, growing both revenue and profitability.”

Morris said that while Tamdown had been “challenged” by significant inflationary pressures in the latter part of the year, it had performed well operationally.

“We have been disciplined across the business to maintain selectivity on the projects we take on, providing visibility of earnings and leaving us well placed for the future.

“Looking forward, we expect profits to grow in the year ahead and the business is in a strong position to meet the anticipated increased level of activity driven by a fundamental undersupply of housing and infrastructure in the UK.

“This is coupled with the growing opportunities to support the UK's energy transition.”

At 0803 BST, shares in Nexus Infrastructure were down 0.38% at 236.1p.