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Nexus Management

  • BY: Andrew Hore |
  • POSTED: 04/02/2009 |

IT managed services provider Nexus Management reported a turnaround from loss to profit in the year to September 2008.

Revenues from continuing activities improved from £3.35m to £3.82m, while a loss of £599,000 was turned into a profit of £198,000. There was a small contribution from the Nerd Force technology support service business.

The UK managed services business is depressed but the New England market is buoyant according to chief executive Roger Richardson. Nexus will need to invest in extra capacity at its data centre in New England. Net cash was £281,000 at the end of September 2008. This may be needed to finance this capital spending.

These figures are benefiting from managed services business that was gained on the back of computer sales by US retailer PD Financial before it lost its original finance provider. PD has got a new finance provider but it will take time for sales to build up again.

Nexus found it difficult to retain much of the original managed services contracts gained via PD. These are running out and the newer business is yet to kick in.

That means that trading will be weaker in the first half of the current year. Analysts forecast a profit of £350,000 on revenues of £4.43m in the year to June 2009. Much of that is likely to come through in the second half of the year.

Shares in Nexus rose 0.06p to 0.81p each, which values the company at £7.14m.

Share issues to acquire Nerd Force will dilute earnings per share from 0.13p to 0.05p a share in 2008-09. That puts the shares on 16 times prospective earnings. 

Nerd Force, and managed services packages sold via the franchise network, should have a greater impact in 2009-10. 

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