Nexus Infrastructure profit dives amid margin pressure
Nexus Infrastructure on Tuesday reported a slump in full year profits as delays and pricing pressure saw higher costs overshadow revenue growth.
The infrastructure services provider booked a profit before tax of £5.7m for the 12 months ended 30 September, down 38% compared to the year before, after gross margin declined from 20.5% to 18.0% on the back of industry-driven delays that hit its Tamdown business.
Customer pricing pressure and cost inflation also added to the drop in margin, though the company said it has now taken mitigating actions to increase it resilience.
The AIM traded company kept its dividend unchanged at 6.6p per share.
Meanwhile, a 15% increase in sales to £155.1m was driven by 30% turnover growth from the TriConnex business, which Nexus attributed to an increase in contracts and project acceleration.
Elsewhere, Tamdown revenue jumped by 10% to £112.2m and sales from its eSmart Networks electric vehicles business climbed from £1.8m to £2.1m.
Nexus said it would increase its focus on efficiency in the coming months, adding that its order book and balance sheet have given the board confidence in the groups prospects over the next few years.
Chief executive Mike Norris said: "We believe that the structural demand for housing in the UK, the low interest rate environment and government-supported incentives in the sector from all major political parties, all play well to Nexus' strengths as a trusted supplier.
"On the basis that trading conditions remain stable, the group is well placed to maximise opportunities within its chosen markets and deliver future value for shareholders."
Nexus Infrastructure shares were down by 6.04% at 160.68p at 1132 GMT.