15th Sep 2014 11:36
LONDON (Alliance News) - Nasstar PLC Monday expressed confidence in meeting full-year expectations, despite posting a widened pretax loss in the half-year to the end of June on exceptional costs.
The cloud computing company posted a pretax loss of GBP1.2 million, widened from GBP573,000 in the previous year, as revenue rose to GBP5.0 million from GBP1.0 million, although this was offset by a step up in operating and administrative expenses and exceptional costs of GBP799,000, said the company.
Exceptional costs related to the company's acquisition of Denara Holdings Ltd, a provision for onerous contracts, and GBP537,000 in reorganisation costs.
The rise in revenue was driven by the integration of its acquisition e-know.net Ltd. Gross margin improved to 68% from 38% as a result of synergy cost cutting, new pricing policies and the acquisition of e-know.net.
Nasstar also consolidated its data centres, reducing its number to four from six by the end of May. It focused on restructuring its UK operations by introducing new pricing policies, which helped the subsidiary to move to positive earnings.
As a result of posting a loss, Nasstar has not proposed an interim dividend.
Following the year-end the company acquired Kamanchi Ltd, an IT outsourcer and hosted desktop provider in the recruitment sector, for GBP2.5 million in cash and shares. The acquisition is expected to add to earnings immediately. Nasstar said the acquisition bolsters its recurring revenue base by around GBP875,000 per month.
Nasstar said it enters the second-half in a good position to deliver on expectations for the full-year.
Shares in Nasstar were trading up 1.5% at 8.50 pence per share.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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