Trading Statement

Nasstar plc

("Nasstar", "Company" or "Group")

Trading Statement

18th January 2016

Nasstar (stock code: NASA), a provider of hosted managed and cloud computing services, is pleased to provide the following trading update for the year ended 31 December 2015.

Trading during the second half of the year continued to yield the benefit derived from the integration of e-know.net, Kamanchi and Nasstar, whilst the acquisition of VESK towards the end of the year has provided further momentum. Therefore, the Directors are confident that full year revenues and adjusted EBITDA* will be in line with expectations.

During the second half of the year, the Group secured the three year renewal of their largest customer Pertemps Network Administration Ltd. The Agreement increases the contracted minimum users from 700 to 1,125 hosted desktop users per month. The three year term which will generate some £3m of recurring revenues also includes an option to extend to five years.

As part of the Group strategy to expand into new vertical markets Nasstar plc tendered for and was successful in achieving G-Cloud 7 status, the latest iteration of the Government Digital Marketplace framework. This complements VESK's original G-Cloud 1 and subsequent agreements and opens up the services of the wider Group to prospects in the public sector, such as local authorities, schools and other central and local government organisations.

The Group secured some prestigious new clients in the second half of the year outside of its traditional sector focus of legal, finance and recruitment, further demonstrating the expanded capability of the Group. Such wins included the Royal College of Radiologists and The Royal Aeronautical Society.

Trading from the recent acquisition of VESK has been in line with Board expectations. Group financial working disciplines have already been rolled out within VESK and the four Group operating businesses are now working closely together to cross sell their respective services across the Group.

VESK successfully put live the contracted 850 seats (referenced in the acquisition announcement) when Whistl (formally TNT) went live on their hosted desktop platform in Dec 2015.

Strong cash control resulted in group cash at year end being ahead of expectations at £1.6m. This was achieved despite the added costs associated with the VESK acquisition and resulted in a year end net debt position of £5.3m.

Group results for the full year ended 31st December 2015 are expected to be released on 11 April 2016.

*Comprising earnings adjusted for interest, taxation, depreciation, amortisation, exceptional items and share based payments.

For further information, please contact:-

Nasstar plc +44 (0) 1952 225 000

Nigel Redwood, Chief Executive Officer

Niki Redwood, Finance Director

finnCap Limited (Nominated Adviser & Broker) +44 (0) 20 7220 0500

Julian Blunt, James Thompson (Corporate Finance)

Stephen Norcross (Corporate broking)

About Nasstar plc

Nasstar (www.nasstar.com) and its wholly owned operating businesses e-know.net (www.e-know.net), Kamanchi (www.kamanchi.co.uk) and VESK (www.vesk.com) provide hosted managed and cloud computing services that enable subscribers to access their corporate desktop, files, applications, data and email in the Cloud rather than using local server infrastructure. Hosted desktop and cloud computing is a highly scalable service that provides benefits including anywhere access to computing, a standardised corporate solution that can be accessed globally and in multiple languages and cost savings when compared to the traditional IT ownership model, replacing capital expenditure with a simple usage based payment model.

Nasstar (AIM:NASA) was founded in 1998, admitted to AIM in December 2005, acquired e-know.net Limited in a reverse takeover in January 2014, Kamanchi Limited in July 2014 and VESK in October 2015.

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