Turnaround at Nexus
Article Date: Feb 04 2009Managed IT services provider Nexus Management has turned an annual loss of £599,000 into a £198,121 pre-tax profit.
The AIM-quoted company, which provides remote server management, disaster recovery, data storage, desktop support and kindred services to clients in the UK and USA, increased turnover 15 per cent to £3.8 million in the year to September. London-based Nexus says it has been cutting costs as some clients review their spending plans in the recession and, with £375,000 cash at the end of its financial year, is looking for more ‘earnings-enhancing’ acquisitions.
In July, the company bought Nerd Force, a New York-based on site computer and technology support concern, for $500,000 (£351,000) in paper and cash. Roger Richardson, Nexus’s chief executive, says franchise sales at Nerd Force have since then grown ‘much faster than expected’, while it also offers opportunities for cross-selling from elsewhere in Nexus.
In the UK, however, sales last year were ‘disappointing’ and the company suggests this slow development is likely to continue ‘for a while’, which is one reason why it is looking for acquisitions which might speed things up. Richardson says there has been ‘a general tightening of budgets for new projects’ and a few client companies have ceased trading, but, since Nexus aims to offer clients ways of reducing their IT costs in these straightened times, he argues that ‘we are well placed to increase revenues in the coming year’.
Nexus shares have hardly been money-spinners, so far at least. Floated eight years ago at 2p, they now trade at only 0.86p, valuing the company at £7.6 million.
Save 50% off your first year’s subscription to Growth Company Investor magazine, and gain immediate access to all the recommendations online. Click here.
This story is from Growth Company Investor, the independent voice on fast-growing companies. Subscribe today for the latest AIM recommendations.
