Nexus Infrastr. Regulatory News (NEXS)

15 May 2025

Nexus Infrastructure plc

("Nexus" or the "Group") Interim results for the six months ended 31 March 2025

Solid progress in its strategic objectives delivered improved results

Nexus Infrastructure plc (AIM:NEXS), a leading provider of essential infrastructure solutions, announces its interim results for the six months ended 31 March 2025 (HY25).

Charles Sweeney, Chief Executive of Nexus, commented: "It has been an encouraging first half for Nexus Infrastructure, during which we have delivered notable progress against our three strategic objectives.

"Tamdown has experienced growth in both revenue and order book, we delivered our first step in diversification through the acquisition of Coleman Construction & Utilities, and our focus on financial delivery has once again resulted in an improvement in Tamdown's gross margin - despite the challenging market backdrop across the housebuilding sector. New work generation in H2 has started well, with additional new contracts secured post the period end, further increasing our order book.

"The Group continues to be well placed to benefit from the recovery of the housebuilding sector. In addition, we can now look forward to the opportunities which will arise from the significant increases in water sector budgeted expenditure included in the AMP8 programme of works, beginning later this year."

Financial Summary

Strategic Highlights

Outlook

*An Asset Management Plan (AMP) period is a is a five-year regulatory cycle period set by Ofwat to increase efficiencies in the water sector in England and Wales. AMP8 is, the eighth cycle of this regulatory framework, which runs until 2030. It sets out the financial and operational expectations for water companies across England and Wales.

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Notes to Editors 

Nexus is a leading provider of civil engineering infrastructure solutions through its two subsidiaries: Tamdown Group Limited ("Tamdown") and Coleman Construction & Utilities Limited ("Coleman").

Tamdown provides a range of civil engineering and infrastructure solutions to the UK housebuilding sector, with operations focused on the South-East of England and London. It has an established market-leading position, having been in operation for over 48 years.

Coleman delivers civil engineering and building projects in the water, rail, highways and rivers & marine sectors. Since its foundation in 2000, the business has grown based on a reputation for quality of service and customer satisfaction.

www.nexus-infrastructure.com

CEO Statement

Solid progress and M&A in HY25

Nexus made good progress in its strategic objectives and delivered improved results in line with Board expectations, notwithstanding the global uncertainties which have unsettled the UK economy. The Group has successfully enhanced operational efficiencies and diversified its service offering to position it for future growth.

Revenue for HY25 grew to £30.6m, an increase of 18.5% on HY24, with gross margins also strengthening to 14.9% (HY24 13.5%). The figures included improvements resulting from the actions taken on operating discipline and in the management of costs, whilst continuing to provide high-quality services to customers.

New contract awards were also encouraging. The housebuilding sector edged upwards and Tamdown secured several new contracts, growing its order book to £80.8m (HY24 £72m). Post the half-year end, further contracts have been secured to the value of £16m. Safely delivering the very best level of service remains vital to the success of the business, and the new wins are a testament to the efforts of all involved.

The acquisition of Coleman Construction & Utilities Limited was completed in October 2024 for an initial cash consideration of £3.1m. Operating in the water, rail, highways, and rivers & marine sectors, Coleman has diversified the Group's activities into new high potential sectors which are less exposed to short-term economic pressures. Coleman's operations have continued without disturbance and the business is benefiting from the support being provided by Nexus.

Nexus continues to retain a strong balance sheet with cash and cash equivalents of £9.6million (HY24 £9.3m). Maintaining a robust balance sheet will continue to be a principal element of management's ethos into the future.

Overall, performance in the first half has been positive with revenue, gross margins, order book and cash all ahead of HY24. This is in spite of the economic uncertainties which have evolved in recent months.

Strategy

Nexus made progress on its core strategic objectives in HY25, all of which will bring benefits to the Group in the years ahead:

Growing With Our Customers

Through quality of service and attention to detail, Tamdown has continued to grow relationships with the national housing developers on large multi-phase schemes which often last between five and ten years.

Tamdown works with longstanding customers including Taylor Wimpey, Bellway, Vistry and Persimmon to name a few, and has made good progress in the first half. Through its quality of service and longstanding, loyal customer base Tamdown won new contracts on several multi-phase projects. This momentum is reflected in the growth of the order book which increased by 11.1% to £80m versus £72m in HY24.

The fundamentals remain strong for the sector and with the market showing some early signs of recovery. This has been illustrated in the order book uptick. Tamdown continues to be well placed to benefit from a recovery in the housebuilding sector.

Expanding Our Market

During HY25, Nexus successfully completed the acquisition of Coleman. Integration is progressing well with operational efficiencies already being delivered as Coleman benefits from support from the wider Nexus Group. Coleman has performed in line with management expectations in the first half, delivering gross margins of c28%.

Many of Coleman's projects are related to high-profile long-term frameworks, such as the AMP programmes (Asset Management Plan) in the water sector. The Coleman team is completing the final phases of the longstanding AMP7 project and attention now turns to the new AMP8 period*. Preparation for AMP8 is underway, with projects expected to start late Q4 with a significant increase in activities in FY26.

The Group continues to review other opportunities for diversification and will evaluate future opportunities in a considered manner.

Focus on Financial Delivery

As outlined above, Nexus made good progress in successfully driving operational efficiencies by focussing on operating discipline and the management of costs, whilst delivering high-quality services.

By working closely with supply chain partners, the businesses continue to seek better ways to prepare, plan and execute projects in the most cost effective, safe and efficient ways.

Whilst the whole sector continues to face cost inflation in labour, plant and materials, efforts in this area have reaped rewards with the Group improving its gross margins.

Summary

Positive strides have been made across the three strategic objectives during the first half.

Tamdown revenues, gross margins and order book have all increased and with the gradual improvement of the housebuilding sector, it is anticipated that further progress will be achieved in the second half of the year.

With the addition of Coleman, Nexus is now active in other areas that are critical to UK infrastructure. The water and rail sectors have pre-agreed budgets for capital expenditure within cycle periods each of at least five years. The Group's activities are now much more diversified bringing greater assurance of future sustainable growth.

Nexus continues to be prudent in its approach to business and will maintain a strong balance sheet to enable assured growth into the future.

Charles Sweeney

Chief Executive Officer

14 May 2025

CFO Review

HY25 Overview

Group revenue for the period increased to £30.6m (H1 2024: £25.8m) including 5 months revenue from Coleman Construction following the acquisition at the end of October. The Group's gross profit margin increased to 14.9% (H1 2024: 13.5%) and the operating loss reduced to £1.1m before exceptional items reflecting the continual focus on operational and cost control.

Cash was £9.6m (H1 2024: £9.3m) supported by the focus on reducing debtor and retention balances. The Group will see working capital requirements increase over the coming months due to the recent work won by Tamdown. The start of the AMP 8 programme by Coleman will also draw on working capital towards the end of 2025 and into 2026.

The Board is maintaining its dividend policy and will be paying a 1 pence per share interim dividend on 27 June 2025.

Tamdown's order book was £80.8m (H1 2024: £72m) at the end of the period and has continued to grow post period end with a further £16m secured.

Revenue

Revenue is split between the housing (Tamdown) and water (Coleman) sectors reflecting the Group's diversification strategy. 

Gross Profit

The Group's gross profit has increased by 31%. Tamdown continues to control operating costs and focus on increasing the gross profit margin. Coleman's gross profit margin shows the positive impact to the Group from this sector.

Loss/Profit before tax and exceptionals

The Group's operating loss before exceptionals was £1.1m (H1 2024: loss £1.3m).

The Tamdown business is set up for the expected increase in revenue which will be coming through from the order book. The delays incurred from securing the work has meant that the loss has increased in H1 as resource has been focused on pricing new contracts.

Exceptional costs of £502k have been incurred by Nexus Infrastructure for the acquisition of Coleman Construction & Utilities Ltd. These costs relate to professional fees for due diligence and legals.

Proposed dividend per share (p)

The Board is declaring an interim dividend of 1 pence per share being paid on 27 June 2025 to shareholders on the register at the close of business on 23 May 2025. The shares will go ex-dividend on 22 May 2025.

Total dividend per share

The Board is pleased to maintain its dividend policy and has declared an interim dividend of 1 pence per share for the third consecutive year. (H1 2024: 1 p per share, H1 2023: 1 p per share). 

The total dividend per share for FY 2024 was 3 p per share and for FY 2023 3 p per share.

Working Capital

Working capital has increased by £960k. There has been a significant reduction in trade receivables due to the operational actions taken including the appointment of a Commercial Director. Both trade receivables and retentions have reduced creating a positive impact to working capital.

Cash

The Group cash balance at H1 2025 is £9.6m (H1 2024: £9.3m) an increase of 3% from 2024. Cash has benefited from the focus on reducing trade receivables and retentions. The cash balance is in a positive place to support working capital requirements of the increase in order book for Tamdown and Coleman when AMP 8 programmes come through.

Order book

Tamdown's order book has increased by 12% to £80.8m (H1 2024: £72m).  Further work to the value of £16m was secured in April 2025.

Acquisition

The acquisition of Coleman Construction & Utilities Ltd completed on 29 October 2024. The accounts at 31 March 2025 include 5 months of trading for Coleman. This includes revenues of £2.8m, gross profit of £0.8m and operating profit of £0.1m as AMP 7 contracts conclude. Revenues from AMP 8 are expected to start from Q4 FY2025 with a significant increase during 2026.

Outlook

With an increased order book to start H2 2025, Tamdown expects to see an increase to revenue during the second half of the year. Despite the loss in the first half of the year, this is not expected to be repeated in the second half with the increased revenues.

Coleman will continue to conclude the works on AMP 7 projects and start initial works on AMP 8 projects.

The Group's cash position will continue to support the businesses as they start to see an increase in activity.

Dawn Hillman

Chief Financial Officer

14 May 2025

Condensed consolidated statement of comprehensive income for the six months to March 2025

Condensed consolidated statement of financial position as 31 March 2025

Condensed consolidated statement of changes in equity for the six months to March 2025

Condensed consolidated statement of cashflows for the six months to 31 March 2025

Notes to the condensed consolidated financial statements

For the six months to 31 March 2025

1. Basis of preparation and accounting policies

The interim report of the Group for the six months ended 31 March 2025 has been prepared in accordance with UK-adopted IAS 34 "Interim financial Reporting" and the AIM Rules for Companies.

The interim report does not constitute financial statement as defined in Section 434 of the Companies Act 2006 and is neither audited nor reviewed. It should be read in conjunction with the Report and Accounts for the year ended 30 September 2024, which is available upon request from the Group's registered office, Nexus Park, Avenue East, Skyline 120, Great Notley, Braintree, Essex CM77 7AL or can be downloaded from the website www.nexus-infrastructure.com.

The comparative information for the financial year ended 30 September 2024 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been reported on by the Company's auditor and delivered to Regsitrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters which the auditor drew attention by the way of emphasis without qualifying their report and (iii) did not contain statements under section 498 (2) or (3) of the Companies Act 2006.

The interim report has been prepared on the basis of the accounting policies as set out in the Report and Accounts for the year ended 30 September 2024.

In preparing this interim report, the significant estimates and judgement made by the Directors in applying the Group's accounting policies and financial risk management objectives were the same as those set out in the Report and Account for the year ended 30 September 2024.

Going concern

In determining the appropriate basis of preparation of the interim report, the Directors are required to consider whether the Group can continue in operational existence for the foreseeable future. After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for at least 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the interim report.

2. Revenue

Revenues from external customers are generated from the supply of services relating to construction contacts. Revenue is recognised over time in the following divisions:

3. Segment analysis

The group has two operating divisions under the control of the Executive Board, which is identified as the Chief Operating Decision Marker as defined under IFRS8: Operating Segments.

· Tamdown

· Coleman

All of the group's operation are carried out entirely within the United Kingdom.

Segment information about the Groups' operations is presented below:

4. Exceptional items

5. Taxation

Where applicable, taxation is recognised based on management's estimate of the weighted average effective annual tax rate expected for the full financial year. The estimated effective tax rate applied to the pre-tax income for Coleman Construction & Utilities Ltd pre-acquisition profits for the six months ended 31 March 2025 is 25%.

The group has unused tax losses which will offset any corporation tax charges for the remainder of the subsidiaries.

6. Dividends

A final dividend payment for the year ended 30 September 2024 of 2p per share was approved by shareholders at a general meeting on 12/03/25 and was paid to shareholders on 17/04/25. This has not been included as a liability in these financial statements. The final dividend paid was £181k.

The board is declaring an interim dividend of 1 pence per share. The interim dividend will be paid on 27/06/25 to shareholders on the register at the close of business on 23/05/25 The shares will go ex-dividend on 22/05/25.

7. Earning 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:

8. Related Party Transactions

The Group's key management personnel are the Executive and Non-Executive Directors, as identified in the Annual Roert for the year ended 30 September 2024.

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated in full on consolidation.

Statement of Directors responsibilities

The Directors confirm, that, to the best of our knowledge:

9. Business Combinations

On 29 October 2024 the group acquired 100% of the issued shares in Coleman Construction & Utilities Ltd, a civil engineering and construction business trading in the water, rail, highways and rivers & marine sectors, for a consideration of £5.38m.

The operating results and assets and liabilities of the acquired company have been included in consolidation from 30 October 2024.

Details of the consideration transferred are:

The provisionally determined fair values of the assets and liabilities of Coleman Construction & Utilities Limited as at the date of acquisition are as follows: