30th Oct 2024 14:28
(Alliance News) - Nexus Infrastructure PLC on Wednesday said it expected to report a fall in annual revenue in line with market expectations, as a result of "challenging market conditions".
The Braintree, England-based provider of civil engineering and infrastructure services to the UK housebuilding sector expected to report GBP56.7 million of revenue for the financial year that ended September 30, which would be a 36% fall from GBP88.7 million in 2023.
This would be in line with market expectations, Nexus said, citing a company-compiled market forecast of GBP55.9 million in revenue and a pretax loss of GBP2.7 million, which would be narrowed from the pretax loss of GBP8.5 million in 2023.
Despite the housebuilding sector showing "early signs of improvement in the first half of the year", Nexus said, "those positive indications were not sustained in the second half".
However, the company said it "remains confident" that the UK housebuilding sector will see "a significant recovery", as improving economic indicators and recent political support mean "the foundations are in place for a future period of sustained market growth".
It said Tamdown, its operational business, had an order book of GBP51.5 million on September 30, up 12% from GBP46.0 million last year. After the year-end, Tamdown also won contracts valued at GBP15.9 million.
Nexus also on Wednesday announced its GBP5.4 million acquisition of Coleman Construction & Utilities Ltd, a civil engineering and construction business for the water, rail, highways, and rivers & marine sectors. Coleman reported revenue of GBP8.3 million and adjusted earnings before interest, tax, depreciation and amortisation of GBP700,000 for its most recent financial year that ended March 31.
The group said this acquisition would enable it "to benefit from long-term opportunities that are less vulnerable to short-term economic fluctuations".
Chief Executive Officer Charles Sweeney said: "I am very pleased with the progress we have made against our strategic plan. During the year, Tamdown continued to focus on operating discipline and the management of costs whilst delivering a high-quality service to its clients. The team's hard work and innovative thinking has further improved productivity in spite of the challenging market conditions. The business is very well-placed to benefit from the widely anticipated upturn in the housebuilding sector.
"Diversification is a principal element of Nexus' strategy, and the acquisition of Coleman provides future growth opportunities outside the group's current core sector of residential housebuilding. Coleman offers services in sectors which are critical to the UK's national infrastructure, driven by climate change, environment protection, shifts in societal needs, and improvements to energy security."
Shares in Nexus Infrastructure were down 2.7% at 126.50 pence each in London on Wednesday afternoon.
By Emily Parsons, Alliance News reporter
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