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Nexus Management

  • BY: Andrew Hore |
  • POSTED: 23/05/2009 |

Nexus Management has improved its interim profits and still has to see the benefits of its most recent acquisitions.

Nexus offers managed IT services as well as IT support services for small businesses through its franchise operation Nerd Force. Pre-tax profits improved from £51,000 to £87,000, while revenues rose 30% to £2.5m in the six months to March 2009. The majority of the growth has come from the US managed services business. Nerd Force is growing its revenues but still losing money.

Retail associate PD Financial has started building up sales since it found a new source of finance. Nexus owns 15.5% of PD which sells electronic and other goods. It offers an annual services contract with Nexus to the buyers of computers. These revenues are recognised over a 12 month period by Nexus. 

Net cash was £174,000 at the end of March 2009. Nexus generated cash from operations and that was mostly spent on the acquisition of the Resilience Technology Corporation near the end of the period. Since then the terms have been revised. The new terms are an initial payment of $400,000 and $1.085m of convertible loans. The loans are repayable in five differing instalments with a final payment of $605,000 at the end of October 2009. Since March 2009, Nexus has raised £125,000 via a share placing at 1p a share and £150,000 from a secured loan.

The plan is to sell RTC’s security services through the existing distribution channels. 
Profits of £630,000 are forecast for the year to September 2009. The shares are trading on 25 times 2008-09 forecast earnings. If the 2009-10 profit forecast of £1.8m is achieved that multiple will fall to nine.

No more acquisitions are envisaged in the short-term. Nexus wants to get the most out of its recent acquisitions.

At 1.26p a share, Nexus is valued at £11.6m.

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