Preliminary Full Year Results

About this update from Nexus Infrastructure Plc

7 March 2024 Nexus Infrastructure plc ("Nexus" or the "Group") Preliminary results for the year ended 30 September 2023 Strong balance sheet, well positioned for market upturn   Nexus Infrastructure plc (AIM:NEXS), a leading provider of essential infrastructure solutions , announces its preliminary results f or the year ended 30 September 2023 (FY23). Commenting on the year in review, Charles Sweeney, Chief Executive Officer of Nexus, said : "FY23 was a year of change for Nexus, following the successful sale of two subsidiaries and the return of £60.5m to shareholders . During the second half of the year, we restructured the Group and its support framework, introduced improvements to processes and reduced costs in line with our strategy. With a strong balance sheet, a loyal customer base and a committed team, we are well placed for the future. "The Group's main trading subsidiary, Tamdown, provides a range of civil engineering solutions to the UK housebuilding sector. Market conditions significantly deteriorated in H2 as the major developers made cuts to their budgets and postponed new project activities. ilke Homes entering into administration was a high-profile example of the turbulence in the sector and Tamdown was significantly impacted by this failure. Decisive actions were taken to right-size the business, in order to protect and improve margins and to ensure we are well-positioned to return to a growth trajectory when the housebuilding market rebounds. "Our strong balance sheet continues to underpin our stability. FY24 has started in line with the Board's expectations and the order book has grown by 24%, from the year end position, by the end of January 2024. The horizon presents several new opportunities, a testament to the strength of our offering, providing confidence in the long-term success of the Nexus Group." Financial summary ·    Continuing revenue 1 of £ 88.7m ( 2022: £98.4m ) of which Tamdown delivered £87.9m (2022: £98.4m), reflecting the continued challenging wider economic environment and the slowdown in housebuilding activity. ·     Operating loss of £8.4m ( 2022: £0.3m ) including exceptional items of £0.6m (2022: £0.0m) with the decrease in profitability impacted by ilke Homes entering administration. ·      Earnings per share 2 (basic) of 239.0p (2022: 6.0p). 3 ·      Order book 4 at the year end 30 September was £46.0m ( 2022: £95.5m ) reflecting a resilient performance during a year of exceptionally challenging market conditions. As at 31 January 2024, a number of key new contract awards had been secured, increasing the order book to £57.2m. ·    A robust balance sheet as the Group's cash 5 remained high at £14.6m (2022: £4.6m). ·    Final dividend of 2.0p, bringing full year dividend to 3.0p. ·    Net assets remain strong following sale of TriConnex and eSmart Networks subsidiaries at £33.0m (2022: £34.1m). 1. Excluding discontinued operations being TriConnex and eSmart Networks which were disposed in February 2023. 2. Continuing operations (being Tamdown as the main trading subsidiary of the Group) including the profit on disposal on the sale of TriConnex and eSmart Networks. 3. Variation is as a result of the capital return by way of Tender Offer (following the sale of TriConnex and eSmart), which on completion in February 2023 resulted in the cancellation of the associated Ordinary Shares.   4. Secured work yet to be carried out for continuing operations. 5. Cash and cash equivalents less borrowings for continuing operations. Strategic highlights ·      Disposal of TriConnex and eSmart Networks in February 2023 returning £60.5m to shareholders, realising the inherent value of these businesses and ensuring Tamdown is well capitalised for the future. ·       Completed a restructuring to reflect the new requirements of the Group and to benefit from a reduction in costs where possible. ·       Cost controls implemented, while maintaining customer engagement in the current economic environment to support future growth. ·       Group is well positioned to innovate and leverage know-how across Nexus.   Outlook for FY24 and beyond   The fundamental market growth drivers for the Group remain positive as the UK's housing market has been in a long-term position of structural undersupply for many years. Tamdown continues to focus on customer service, winning high-quality contracts with longstanding customers, and improving operating margins. Tamdown's refreshed position and the Group's strong financial footing mean Nexus is well-placed to return to a growth trajectory when the housebuilding market improves. Market sentiment anticipates a recovery in the housebuilding market over the next 18 months.  Tamdown's services, capabilities and expertise form the principal element of activities at the start of new developments and will therefore feature early when conditions in the housebuilding sector improve. The Board will continue to review a range of future growth options to deliver expansion and diversification opportunities, to take full advantage of the Group's capabilities and experience.   Nexus Infrastructure will be hosting its Annual General Meeting at 9:00am on 27 March 2024 at Nexus Park, Avenue East, Skyline 120, Great Notley, Braintree, Essex, CM77 7AL.   The Directors have made arrangements to enable shareholders to either attend the meeting in person or virtually. To attend virtually, shareholders must pre-register by contacting the Company Secretary by email:  [email protected] . For more information, please contact:     Nexus Infrastructure plc   via Alma  Charles Sweeney, Chief Executive Officer  Dawn Hillman, Chief Financial Officer  Deutsche Numis (London)   (Nominated Adviser & Broker)  Tel: 0207 260 1200  Oliver Hardy (Nomad)  Heraclis Economides  Hannah Boros  Alma Strategic Communications   Justine James  Tel: 0203 405 0205  [email protected]  Hannah Campbell  Will Merison   Notes to Editors     Nexus is a market-leading provider of essential infrastructure solutions.    Tamdown provides a range of civil engineering and infrastructure services to the UK housebuilding sectors, with operations focused on the South-East of England and London. It has an established market-leading position, having been in operation for over 45 years.    www.nexus-infrastructure.com   Chairman's statement Overview of the year   It has been a year of significant change for Nexus with the successful sale of TriConnex and eSmart Networks in February 2023, which saw the return of £60.5m via a tender-offer process to shareholders and crystallised the inherent value of these businesses as well as helping to ensure that the Group was well capitalised for the future. The strategic disposal marked an important step change for the Group. As a Board, we are extremely proud of the team's hard work and commitment to achieving a successful outcome. Following the disposal, Mike Morris and Alan Martin stepped down from their respective roles as CEO and CFO. We would like to thank them for their significant contributions in completing the disposal and for their leadership in driving the development of Nexus during their time with the Group. Mike will continue to provide input and guidance to the Board in his role as a Non-Executive Director.   Following the completion of the sale, Tamdown became the main trading business of Nexus. The business navigated a challenging market and performed well in the first half, successfully growing revenues and profit, securing new work, and maintaining a good order book despite the difficult environment. The widely expected market upturn in the second half did not materialise and housebuilding activity in fact, slowed significantly. The decline in house sales negatively impacted several of Tamdown's customers, resulting in a significant reduction in new housing developments. ilke Homes, filed for administration in June 2023, causing a material one-off impact on the business. In response to the declining market conditions, the team carried out an operational review and implemented a range of cost management measures and decisions to right size the business. This has now been completed and it ensures we are well placed to benefit when housebuilding output improves again.    As a Board, we remain confident in the strength of Tamdown and its ability to deliver once market conditions normalise. We believe that there is a positive outlook for the housebuilding sector in the future due to the chronic undersupply of good-quality housing across the UK. Board and governance   Upon completion of the sale of TriConnex and eSmart Networks, we welcomed Charles Sweeney to the Nexus Board as CEO and Dawn Hillman as CFO, to lead the Group. Both have deep knowledge and experience in the leadership of construction businesses, including a collective total of 43 years with the Group. Since their appointment, they have played a crucial role in transitioning the Group and ensuring that Tamdown is effectively organised for current market circumstances and has the foundations in place for growth as conditions improve. The Board and the management team are also developing a refreshed strategy, to ensure the Group remains a high-quality business, continues to grow over the long-term, and delivers diversification opportunities, taking full advantage of the Group's capabilities and experience.   Post-period end, after seven and a half years as a Non-Executive Director, we announced that Alex Wiseman will not stand for re-election at the forthcoming AGM in March 2024 and will step down from the Board. Alex has had a huge impact on the Group since he was appointed in June 2016 and played a pivotal role in the growth of the business and the successful disposal of TriConnex and eSmart Networks. We wish him all the very best for the future.   A primary driver of Nexus' success is the team of highly skilled, driven, and loyal employees across the Group. Nexus places great importance on engaging with and developing its employees and providing a platform for personal growth and successful career development. On behalf of the Board, I would like to congratulate and thank our employees for their continued hard work and dedication throughout the year. Dividend    Nexus continues to operate with a robust balance sheet, with net cash of £14.6m at year-end. The Board intends to recommend the payment of a final dividend of 2.0p per share.   Stakeholder engagement   The Board recognises the importance of stakeholder engagement to the long-term success and sustainability of our business. The Group is committed to developing effective dialogue and relationships with all stakeholder groups and the Board continually develops our business using learnings from these interactions.    We remain focused on our mission to be recognised as the leading provider of essential infrastructure solutions in the UK, by delivering outstanding performance through a focus on delivery, customer service and diversification; stakeholder engagement helps us to achieve this.    Sustainability   At the heart of our purpose, Building Bright Futures, is a commitment to sustainability - for our people, communities, and the planet. Nexus and our people continue to challenge assumptions across our operations and find better ways to ensure quality delivery while also improving our sustainability as a business.   Our dedication to Health & Safety was recognised by the Royal Society for the Prevention of Accidents (RoSPA) with Tamdown receiving its 14 th consecutive Gold Award and the RoSPA President's award. We also launched a bespoke Behavioural Safety Programme to influence actions towards safer outcomes.   We continued our wellbeing initiatives to support our people, as well as our volunteering scheme and fundraising efforts to support the communities we operate within.   Our teams are working to continuously improve our and our customers' journeys to; lower emissions, decrease carbon footprint and reduce the environmental impact of project operations. During the year Tamdown undertook a Plant Renewal Programme investing in new machinery to improve fuel and other efficiencies. We also adopted a greener fleet to reduce our emissions, and worked with suppliers at our Nexus Park head office to improve our waste management and energy consumption.   We see sustainability as a journey for our business alongside our customers and suppliers, and it is a journey we are fully committed to.   Summary and outlook   The Group has taken effective mitigating actions during the year and continues to be committed to protecting and improving margins to ensure we are well-positioned to support established and new customers when market confidence returns. The balance sheet has remained resilient, which was particularly demonstrated in the second half of the year, and continues to support us in FY24. Despite the challenging environment, the long-term fundamental market growth drivers for Tamdown are positive. The housing market has been in a long-term position of structural undersupply and the recent downturn in new housebuilding is only exacerbating the situation.   Trading in the first quarter of FY24 is in line with the Board's expectations. There are several new opportunities on the horizon, reflecting the strength of our offering and the value Tamdown brings to its customer base, providing confidence in the long-term success of Nexus. Richard Kilner Non-Executive Chairman       Executive review   This year has been one of change. Following the sale of TriConnex and eSmart Networks in February 2023, a new management team is now in place, and we have made a number of adjustments in Tamdown, including reducing overhead, plant and labour costs, to reflect the subdued market conditions in the housebuilding sector. Tamdown is now well placed to benefit fully from the upturn in the sector which the market expects in the years ahead. In parallel , we are developing our strategy that will deliver a path of long-term sustainable growth for the Group, to deliver expansion and diversification opportunities, to take full advantage of the Group's capabilities and experience .   The sale of TriConnex and eSmart Networks returned £60.5m via a tender-offer process to shareholders and ensured that the Group was well capitalised for the future. However, Tamdown subsequently faced a significant decline in market conditions and the expected upturn in the housebuilding sector in the second half of 2023 did not materialise. Housebuilding activity slowed dramatically in an environment of high inflation and elevated interest rates. There were several high-profile 'casualties' during the year, including the modular housebuilder, ilke Homes which entered into administration and was formally liquidated with unpaid debts in excess of £300m. Tamdown had been working on two projects for ilke Homes.   Tamdown's order book was £46.0m at year-end. Since then, Tamdown has continued to focus on customer service, winning high-quality contracts, and improving gross margins. By the end of January 2024 , a number of key new contract awards had been secured, increasing the order book to £57.2m.   Overall, the Group revenues for the continuing operations for FY23 were £88.7m (2022: £98.4m) with an operating loss of £8.4m (2022: £0.3m) including exceptional items of £0.6m.   Nexus has a robust balance sheet with cash and cash equivalents of £14.6m at the FY23 year-end (2022: £4.6m). Having taken the prudent actions mentioned above, the Board is confident that the Group is well-positioned to fully benefit from the widely anticipated improvement in the residential housebuilding market. Operational update: Nexus Infrastructure   Following the sale of TriConnex and eSmart Networks, a 'Transition Project' was implemented to ensure these subsidiaries were separated from the Group in an efficient and orderly way.   The Nexus organisation was restructured to reflect the new requirements of the Group and to benefit from a reduction in costs where possible. A review of our external service providers was undertaken with new arrangements introduced as necessary. This included the appointment of new auditors (MHA) and financial PR company (Alma Strategic Communications).   The Group also considered if it would be appropriate to change its banking arrangements. After a detailed evaluation process, we were pleased to secure Barclays as an additional banking services provider.   Operational update: Tamdown   Tamdown provides a range of essential civil engineering and infrastructure solutions to the UK housebuilding sector. These services include earthworks, building highways, substructures and basements, and installing sustainable drainage systems. It has an established market-leading position having been in operation for over 45 years. It is particularly recognised for its experience and capabilities in the safe delivery of large, complex, multi-phase developments. It has a strong brand and a loyal customer base.   Tamdown's performance in Health & Safety was again recognised by the Royal Society for the Prevention of Accidents (RoSPA), receiving a Gold Award for the 14th consecutive year. Tamdown was also awarded the RoSPA President's Award. A Behavioural Safety programme was rolled out across the business and this, along with a number of other initiatives, was used to proactively protect the health and safety of our site and office personnel and all those working at or visiting our facilities. Tamdown's Accident Incidence Rate (AIR) for the year was 122 (2022: 369). By comparison, the Health and Safety Executive's figures, published in November 2023, state that the equivalent average for the UK construction industry overall in 2022/23 was 296.   During the first half of the year, Tamdown won work from several customers, leveraging its strong relationships and reputation for quality delivery. However, in the second half, the major housebuilders experienced a material decline in new house sales and, as a result, significantly reduced the award of new projects. As noted above, t here were several high-profile 'casualties' during the year, including the modular housebuilder, ilke Homes which entered into administration and thereafter was formally liquidated with unpaid debts in excess of £300m. Tamdown had been working on two projects for ilke Homes and, as an unsecured creditor, debts of £2.9m went unpaid, impacting Tamdown's profits and cash collection. There were further impacts due to the removal of work in progress and the future expected revenues listed in the order book.   Tamdown's order book was £46.0m (2022: £95.5m) at the year-end but, following the award of a number of new projects post period-end, the order book by the end of January 2024 had improved to £57.2m.   At the end of FY23, we implemented a restructuring of our organisation to reduce costs and to position the business for recovery when the inevitable market upturn takes place. We have maintained our reputation and relationships with our supply chain, this loyalty is in line with our values and we expect will be returned in-kind as we return to growth.     Financial Review   Revenue and profits   Revenue for the Group (for continuing operations) decreased to £88.7m (2022: £98.4m).  Tamdown's revenue decreased to £87.8m (2022: £98.4m), reflecting the challenging market for housebuilders in the second half.   Gross profit for the Group (for continuing operations) decreased to £6.0m (2022: £9.9m).  The gross profit margin for Tamdown decreased to 5.8% (2022: 17.4%) reflecting the significant impact of Ilke Homes on profitability.   Administrative expenses for the Group (for continuing operations) increased in the year to £10.8m before exceptional items (2022: £10.2m).  The exceptional items for the year relate to restructuring costs.   The Group's operating loss, for the year was £8.4m (2022: £0.3m). The sale of TriConnex and eSmart Networks generated profits of £67.3m taking the profit attributable to equity holders of the parent company to £58.8m (2022: £2.7m).   The net finance charge for the year totalled £0.16m (2022: £0.6m). Interest received on bank deposits increased to £0.4m (2022: £0.0m) due to the increase in interest rates. Interest payable on bank borrowings was £0.0m (2022: £0.2m) due to borrowings being settled in 2022. Interest on lease liabilities of £0.6m (2022: £0.4m) increased due to lease liabilities increasing following the sale and leaseback of Nexus Park. Tax   The Group recorded a tax charge for the year of £(0.05)m (2022 £0.1m) representing an effective tax rate of 22% (2022 21.5%).  The income tax expense relates to continuing operations Strong balance sheet and cash   The Group continues to maintain a strong balance sheet with shareholders' funds increasing during the year to 30 September 2023 to £33.0m (2022: £34.1m) the movement representing the trading performance of the Group less the payment of dividends totalling £0.09m and the return to shareholders of £60.5m following the sale of TriConnex and eSmart Networks.   The cash and cash equivalents balance at 30 September 2023 was £14.6m (2022: £4.6m).  Operating cash outflows before working capital movements were £5.9m (2022: inflows £1.5m).  Working capital decreased during the year by £7.2m (2022: £2.9m outflow).   Tax and interest payments amounted to £0.1m (2022: £0.8m). Cash generated from investing activities totalled £60.2m (2022: £11.9m).   Net cash outflows from financing activities totalled £62.1m (2022: £14.0m) with £1.5m of lease repayments, £0.09m (2022: £1.1m) on dividend payments, and £60.5m on returns to shareholders following the sale of TriConnex and eSmart Networks.   The Group introduced a new banking relationship with Barclays in the year alongside its ongoing relationship with Allied Irish Bank ("AIB"), a good indicator of the strength of the business. The facilities provided by AIB including the undrawn revolving credit facility of £5.0m, and an associated accordion of £5.0m were cancelled in the year as these are no longer considered to be required by the business. Order book   The order book stood at £46.0m (2022: £95.5m), which the board considers to reflect a resilient performance during a year of exceptionally challenging market conditions. By the end of January 2024, a number of key new contract awards had been secured, increasing the order book to £57.2m. Treasury risk management   The Group's cash balances are centrally pooled and invested, ensuring the best available returns are achieved, consistent with retaining liquidity for the Group's operations. The Group deposits funds only with financial institutions which have a minimum short-term credit rating of A. As the Group operates wholly within the UK, there is no requirement for currency risk management.   Market Update   The fundamental market growth drivers for the Group remain positive. The UK's housing market has been in a long-term position of structural undersupply for many years and the number of new houses being built has failed to keep pace with the rate of household formation. This structural undersupply provides us with confidence that our housebuilding customers will continue to demand our quality services when conditions normalise.   Market sentiment is that there will be a recovery in the housebuilding market over the next 18 months. Tamdown's services, capabilities and expertise form the principal element of activities at the start of any new development and will therefore feature early in the cycle when the market upturn takes place. Summary and outlook   FY23 was a year of significant change for the Group, with Tamdown now the primary operating business of Nexus. Whilst Tamdown operated in difficult market conditions, we took decisive action to respond and right-size the business. As a result of this, along with our strong financial footing, we are well-placed to return to a growth trajectory when the housebuilding market improves. It has been widely reported that market conditions in the UK are expected to improve over the next 18 months, which alongside our long-standing relationships, a loyal and dedicated team, strong management of cash, and a range of potential strategic opportunities, means we can look to the future with confidence.   Charles Sweeney Chief Executive Officer   Dawn Hillman Chief Financial Officer   CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 SEPTEMBER 2023     2023 2022   Note £'000 £'000         Continuing operations       Revenue 2 88,691 98,392         Cost of sales   (82,719) (88,482)         Gross profit   5,972 9,910         Administrative expenses   (10,779) (10,225)         Impairment Loss   (2,935) -         Operating loss before exceptional items   (7,742) (315) Exceptional items 4 (645)           Operating loss   (8,387) (315)         Finance income 5 447 13 Finance expense 5 (599) (607)         Loss before tax   (8,540) (909)         Taxation 6 46 (109)         Loss from continuing operations   (8,494) (1,018)         Discontinued operations       Profit from discontinued operations (after tax) 11 67,292 3,729                 Profit and total comprehensive income for the year attributable to equity holders of the parent   58,799 2,711         Earnings/(losses) per share (p per share)               Basic (p per share) - total operations 8 238.96 5.96 Diluted (p per share) - total operations 8 238.96 5.89         Basic (p per share) - continuing operations 8 (34.52) (2.24) Diluted (p per share) - continuing operations 8 (34.52) (2.24)         Basic (p per share) - discontinued operations 8 273.48 8.20 Diluted (p per share) - discontinued operations 8 273.48 8.10                 There are no recognised gains and losses other than those shown in the income statement above and therefore no separate statement of other comprehensive income has been presented.     CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2023     Group Group     2023 2022   Note £'000 £'000         Non-current assets       Property, plant and equipment 9 5,377 5,459 Right of use assets 10 11,435 12,620 Goodwill   2,361 2,361 Investments in subsidiaries     Deferred tax asset     Total non-current assets   19,173 20,440         Current assets       Inventories   44 43 Trade and other receivables   24,135 30,388 Contract assets   2,784 8,120 Corporation tax asset   27 Cash and cash equivalents   14,626 4,597   41,589 43,175 Assets classified as held for sale 11 57,411 Total current assets   60,763 100,586 Total assets   60,763 121,026         Current liabilities       Trade and other payables   15,540 21,698 Contract liabilities   552 3,543 Lease liabilities   1,826 1,663 Corporation tax liability   18     17,936 26,904 Liabilities associated with assets classified as held for sale 11 49,094 Total current liabilities   17,936 75,998         Non-current liabilities       Lease liabilities   9,818 10,793 Deferred tax liabilities   95 Total non-current liabilities   9,818 10,888 Total liabilities   27,754 86,886         Net assets   33,010 34,140         Equity attributable to equity holders of the Company       Share capital   181 911 Share premium account   9,419 9,419 Retained earnings   23,410 23,810         Total equity   33,010 34,140   CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 SEPTEMBER 2023     Share Share Retained Total     capital premium account earnings     Note £'000 £'000 £'000 £'000 Equity as at 1 October 2021   908 9,419 21,805 32,132         Profit for the period     2,711 2,711 Total comprehensive income for the period     2,711 2,711           Transactions with owners         Dividend paid 7   (1,091) (1,091) Share-based payments     385 385 Issue of share capital   3   3   3 (706) (703)                   Equity as at 30 September 2022   911 9,419 23,810 34,140         Profit for the period     58,799 58,799 Total comprehensive income for the period     58,799 58,799           Transactions with owners         Dividend paid 7   (90) (90) Share buyback   (743) (59,808) (60,551) Share-based payments     700 700 Issue of share capital   13   13   (730) (59,198) (59,929)         Equity as at 30 September 2023   181 9,419 23,410 33,010   CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 SEPTEMBER 2023     Group Group     2023 2022 Note £'000 £'000       Cash flow from operating activities     (Loss)/Profit before tax continuing operations   58,753 3,454 Adjusted by:     Gain on sale of subsidiaries   (67,292) Profit on disposal of property, plant and equipment - owned   (573) Share-based payments   700 385 Finance expense (net) 5 152 588 Depreciation of property, plant and equipment - owned 9 726 833 Depreciation of property, plant and equipment - right of use 10 1,618 1,215 Operating profit before working capital changes   (5,917) 6,475       Working capital adjustments:     Decrease/(Increase) in trade and other receivables   6,949 (7,384) Decrease/(Increase) in contract assets   (91) (6,818) (Increase) in inventory   (744) (430) (Decrease)/Increase in trade and other payables   (7,398) 4,155 (Decrease)/Increase in contract liabilities   (59) 1,565 Cash (used in)/generated from operating activities   (7,260) (2,437)       Interest paid 5 (599) (244) Taxation paid   242 (550)     Net cash (used in)/generated from operating activities   (7,617) (3,231)       Cash flow from investing activities     Purchase of property, plant and equipment - owned 9 (759) (795) Purchase of property, plant and equipment - right of use 10 (1,088) Proceeds from disposal of property, plant and equipment - owned 9 1,408 13,555 Sale of available for sale investments     Sale of discontinued operations 11 60,168 Interest received 5 447 39 Net cash generated from/(used) in investing activities   60,176 12,799       Cash flow from financing activities     Dividend payment 7 (90) (1,091) Draw down of HP facility   587 Sharebuy back   (60,551) Repayment of term loan   (11,663) Principal elements of lease repayments   (1,472) (2,753) Net proceeds from the issue of share capital   13 3 Net cash (used in)/generated from financing activities   (62,100) (14,917)       Net change in cash and cash equivalents   (9,542) (5,349)     Cash and cash equivalents at the beginning of the year   24,168 29,517     Cash and cash equivalents at the end of the year   14,626 24,168       Reconciliation of cash and cash equivalents at the end of the year     Held by continuing operations   14,626 4,597 Held by discontinued operations   19,571 Cash and cash equivalents at the end of the year   14,626 24,168     NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2023 1.    Accounting policies The financial information does not constitute the Company's financial statements for the years ended 30 September 2023 or 2022 but is derived from those statements.  Financial statements for 2022 have been delivered to the Registrar of Companies and those for 2023 will be delivered following the Company's General Meeting in April 2024.  While the financial information included in this preliminary announcement have been prepared in accordance with UK adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards, this announcement itself does not contain sufficient information to fully comply with those Standards. The accounting policies used to prepare these preliminary results are the same as those used in the preparation of the Group's audited accounts for the year ended 30 September 2022 which have been delivered to the registrar of Companies.   2.    Revenue Revenues from external customers for continuing operations are generated from the supply of services relating to civil engineering and construction contracts.  Revenues from external customers for discontinued operations are generated from the supply of design, installation and connection of multi-utility networks, and energy transition projects. Revenue is recognised in the following operating divisions:       2023 2023 2023     Continuing Operations Discontinued Operations Total   £'000 £'000 £'000       Segment revenue   88,691 23,484 112,175 Inter-segment revenue         Revenue from external customers   88,691 23,484 112,175           Timing of revenue recognition         Over time   88,691 23,484 112,175           Customer type         Residential   87,839 17,992 105,831 Non-residential   852 5,492 6,344   88,691 23,484 112,175                         2022 2022 2022     Continuing Operations Discontinued Operations Total   £'000 £'000 £'000       Segment revenue   98,392 75,011 173,403 Inter-segment revenue         Revenue from external customers   98,392 75,011 173,403           Timing of revenue recognition         Over time   98,392 75,011 173,403           Customer type         Residential   98,392 55,670 154,062 Non-residential     19,341 19,341   98,392 75,011 173,403     3.    Segmental analysis - Income Statement The Group has one operating division under the control of the Executive Board, which is identified as the Chief Operating Decision Maker as defined under IFRS 8: Operating Segment: ·    Tamdown All of the Group's operations are carried out entirely within the United Kingdom. The results for TriConnex and eSmart Networks have been presented as discontinued under IFRS 5, with the Tamdown and Group administration expenses comprising the continuing operations below. The related assets and liabilities of these operations have been similarly presented. Segment information about the Group's operations is presented below:   2023 2022 £'000 £'000       Revenue from continuing operations     Tamdown 87,839 98,392 Nexus Infrastructure plc 841 - Nexus Park Ltd 11 - Inter-company trading     Total revenue from continuing operations 88,691 98,392 Revenue from discontinued operations     TriConnex 17,992 55,670 eSmart Networks 5,492 19,341 Inter-company trading     Total revenue from discontinued operations 23,484 75,011 Total revenue 112,175 173,403       Gross profit from continuing operations     Tamdown 5,120 9,910 Nexus Infrastructure plc 841 - Nexus Park Ltd 11 - Total gross profit from continuing operations 5,972 9,910 Gross profit from discontinued operations     TriConnex 4,649 16,319 eSmart Networks 1,256 4,024 Total gross profit from discontinued operations 5,905 20,343 Total gross profit 11,036 30,253       Operating (loss)/profit from continuing operations after exceptional items     Tamdown (6,031) 2,272 Group administrative expenses (2,356) (2,587) Total operating loss from continuing operations after exceptional items (8,387) (315) Operating profit/(loss) from discontinued operations after exceptional items     TriConnex 850 5,568 eSmart Networks (1,102) (1,212) Total operating (loss)/profit from discontinued operations after exceptional items (252) 4,356 Total operating (loss)/profit after exceptional items (8,639) 4,041       The value of depreciation included in the measure of segment profit is:       2023 2022 £'000 £'000 Tamdown 1,284 814 Group 1,060 733 Total depreciation - continuing operations 2,344 1,547 TriConnex   351 eSmart Networks   150 Total depreciation - discontinued operations   501 Total depreciation 2,344 2,048   4.    Exceptional items   2023 2022   £'000 £'000       Continuing operations     Redundancy Costs 645 0 Total 645 0 5.    Finance income and expense   2023 2022 £'000 £'000       Finance income     Continuing operations     Interest on bank deposits 447 13     Discontinued operations     Interest on bank deposits 26 26     Finance expense     Continuing operations     Interest on bank loan   (186) Interest on hire purchase agreements (56) Interest on lease liabilities (543) (421) (599) (607)     Discontinued operations     Interest on bank loan     Interest on lease liabilities (21) (20) (21) (20)     Finance expense (net) (152) (588)     6.    Taxation   2023 2022 £'000 £'000       Current tax - continuing operations:     UK corporation tax on profits for the year   79 Adjustment in respect of prior periods 50 Total current tax 50 79     Deferred tax - continuing operations:     Origination and reversal of timing differences (34) (94) Adjustment in respect of prior periods (55) 124 Effect of tax rate change on opening balance (8) Total deferred tax - continuing operations (96) 30 Total deferred tax (96) 30 Total tax charge (46) 109       The tax assessed for the year is higher than (2022: higher than) the standard rate of corporation tax as applied in the UK. The differences are explained below:         2023 2022   £'000 £'000       Profit/(loss) before tax 58,813 3,454     Profit/(loss) before tax multiplied by the respective standard rate of corporation tax applicable in the UK (22.01%) (2022: 19.0%) 12,998 657     Effects of:     Fixed asset differences (11) (168) Non-deductible expenses 1,760 229 Income not taxable for tax purposes (16,713) Other tax adjustments, reliefs and transfers   (59) Chargeable gains/losses (58) Group income 247 Adjustment in respect of prior periods - current tax 38 (19) Adjustment in respect of prior periods - deferred tax (55) 124 Remeasurement of deferred tax for changes in tax rates (251) Movement in deferred tax not recognised 1,999 (22) Total tax charge (46) 742       Income tax expense from continuing operations (46) 109 Income tax expense from discontinued operations   633 Total tax charge (46) 742       There was no income tax (charged)/credited directly to equity in the year (2022: £nil).       At the balance sheet date, the Group has unused tax losses of £7.85m (2022: £0) and other fixed asset and short term temporary differences of £142k (2022 : £0) available for offset against future profits with an indefinite expiry period.  Based on the projections, there are insufficient future taxable profits to justify the recognition of a deferred tax asset.  On this basis no deferred tax asset has been recognised in the current year, the unrecognised deferred tax asset calculated at the substantively enacted rate in the UK of 25% amounts to £1.99m as at 30 September 2023 (2022: £0).   7.    Dividends Group and Company     2023 2022 £'000 £'000       Amounts recognised as distributions to equity holders in the year:     Interim dividend for the year ended 30 September 2023 of 1.0p per share (2022: 1.0p per share) 90 456 Final dividend for the year ended 30 September 2022 of £nil per share (2021: 1.4 per share)   635 90 1,091       The proposed final dividend for the year ended 30 September 2023  of 2.0p per share (2022 £nil per share) makes a total dividend for the year of 3.0p (per share (2022 1.0p per share).  The proposed final dividend is subject to approval by shareholders at a GM and has not been included as a liability in these financial statements.  The total estimated final dividend to be paid is £180,666    8.    Earnings per share Basic earnings per share is calculated by dividing the profit attributable to equity shareholders of the Company by the weighted average number of shares in issue for the year. Diluted earnings per share is calculated by adjusting the weighted average number of shares in issue for the year to assume conversion of all dilutive potential shares. The calculation of the basic and diluted earnings per share is based on the following data:   2023 2022 £'000 £'000       Weighted average number of shares in issue for the year 24,605,883 45,482,193     Effect of dilutive potential ordinary shares: 0 Share options (number) 0 578,508     Weighted average number of shares for the purpose of diluted earnings per share 24,605,883 46,060,701   Profit for the year attributable to equity shareholders 58,799 2,711     Basic earnings (p per share) 238.96 5.96 Diluted earnings (p per share) 238.96 5.89     Continuing operations           Loss for the year from continuing operations (8,494) (1,018)     Basic losses (p per share) (34.52) (2.24) Diluted losses (p per share) (34.52) (2.24)     There are no share options in place so no dilutive effective on the earnings per share           Discontinued operations           Profit for the year from discontinued operations 67,292 3,729     Basic earnings (p per share) 273.48 8.20 Diluted earnings (p per share) 273.48 8.10 9. Property, plant and equipment   Group Freehold land and buildings Leasehold improvements Plant and machinery Motor vehicles Fixtures and fittings Total               £'000 £'000 £'000 £'000 £'000 £'000               Cost             At 1 October 2021 16,921 657 1,943 1,040 2,008 22,569 Additions 41 185 196 373 795 Disposals (13,569) (130) (93) (6) (13,798) Transfer to leasehold improvements (3,393) 3,393       Transfer from right of use assets     232   232 Transfer to assets held for sale     (99) (1,008) (491) (1,598) At 30 September 2022   4,050 2,131 135 1,884 8,200 Additions     183 299 347 829 Disposals     (2,826) (54) (68) (2,948) Transfer from right of use assets     2,384   2,384 At 30 September 2023   4,050 1,872 380 2,163 8,465               Accumulated depreciation             At 1 October 2021 38 657 1,417 585 288 2,985 Charge for the year 137 85 99 119 394 834 Disposals (175) (91) (76) (342) Transfer from right of use assets     154   154 Transfer to assets held for sale     (56) (542) (292) (890) At 30 September 2022   742 1,523 86 390 2,741 Charge for the year   170 156 33 367 726 Disposals     (1,983) (49) (28) (2,060) Transfer from right of use assets     1,681   1,681 At 30 September 2023   912 1,377 70 729 3,088               Net book value             At 30 September 2021 16,883 526 455 1,720 19,584 At 30 September 2022   3,308 608 49 1,494 5,459 At 30 September 2023                            -   3,138 495 310 1,434 5,377     10. Right of use assets and lease liabilities The Group has leases for freehold property, plant and machinery, motor vehicles and fixtures and fittings. Leases for freehold property relate mainly to office properties, whilst the plant and machinery leases are predominantly large machinery used in site operations. The statement of financial position shows the following information relating to right of use assets and leases:       2023 2022     £'000 £'000           Right of use assets         Freehold property     10,217 10,881 Plant and machinery     610 873 Motor vehicles     604 861 Fixtures and fittings     4 5     11,435 12,620         Lease liabilities         Current     1,826 1,663 Non-current     9,818 10,793     11,644 12,456     11.  Assets held for sale and associated liabilities, and discontinued operations On 30 December 2022, the group announced its intention to dispose of the subsidiaries TriConnex Ltd and eSmart Networks Ltd. The associated assets and liabilities were consequently presented as held for sale in the 2022 financial statements. The disposal completed on 3rd February 2023 and the former subsidiaries are reported in the current period as a discontinued operation.  Financial information relating to the discontinued operations for the period to the date of disposal are set out below. The financial performance and cash flow information presented are for the four months ended 31 January 2023 (2023 columns) and the year ended 30 September 2022.   Total TriConnex eSmart Total TriConnex eSmart   2023 2023 2023 2022 2022 2022   £'000 £'000 £'000 £'000 £'000 £'000   Revenue 23,484 17,992 5,492 75,011 55,670 19,341 Expenses (23,795) (16,942) (6,853) 70,655 50,102 20,553 Loss before income tax (312) 1,049 (1,361) 4,356 5,568 (1,212) Income Tax expense 60 (199) 259 (633) (624) (9) Loss after income tax of discontinued operation (252) 850 (1,102) 3,723 4,944 (1,221) Gain on sale of subsidiaries (see below) 67,545 Total gain on sale of subsidiary 67,292   Consideration received: Total TriConnex eSmart   2023 2023 2023   £'000 £'000 £'000   Cash 77,700 - - Carrying amount of net assets sold 7,746 9,080 (1,333) Costs related to the sale of the discontinued operations (2,409) Gain on sale after income tax 67,545 - -   The carrying amounts of assets and liabilities as at the date of sale (3 February 2023) were : Total TriConnex eSmart   Total   2023 2023 2023   2022   £'000 £'000 £'000   £'000   Non-Current Assets   Property, plant and equipment 798 643 155 708 Right of use assets 1,585 1,153 432 1,228 Total non-current assets 2,383 1,796 587   1,936   Current Assets   Inventories 3,625 2,781 844 2,882 Trade and other receivables 14,450 9,210 5,240 15,146 Contract assets 23,232 19,335 3,897 17,805 Corporation tax asset 330 71 259 71 Cash 15,123 14,217 906 19,571 Total current assets 56,760 45,615 11,146   55,475   Total assets 59,143 47,411 11,733   57,411   Current liabilities   Trade and other creditors 15,123 9,633 5,490 16,357 Contract liabilities 34,449 27,322 7,127 31,517 Lease liabilities 513 331 182 382 Corporation tax liability 314 314 Total current liabilities 50,399 37,600 12,799   48,256   Non-current liabilities   Lease liabilities 883 648 235 723 Deferred tax liabilities 115 83 32 115 Total non-current liabilities 998 731 267   838   Total liabilities 51,397 38,331 13,066   49,094   Net assets 7,746 9,080 (1,333)   8,317   12. Events after the reporting year Group and Company There are no events after the reporting year to disclose.  

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