Nexus hit by Ilke collapse, but remains optimistic

Nexus Infrastructure has said the demise of modular builder Ilke Homes contributed to it moving deeper into the red in its past financial year.

London Stock Exchange-listed Nexus, which provides groundworks and other infrastructure services for the residential construction and civil engineering sectors through its main trading business Tamdown, posted revenue of £88.7m for the year ending 30 September 2023, compared with £98.4m the previous year.

In its annual accounts published last week, Essex-based Nexus posted a pre-tax loss of £8.5m versus a loss of £315,000 the year before. Chairman Richard Kilner attributed this to challenging market conditions and the impact of Ilke entering administration in June 2023, which caused “a material one-off impact on the business”.

Nexus said that Tamdown had been working on two projects for Ilke Homes and, as an unsecured creditor, debts of £2.9m went unpaid.

Its order book fell by 52 per cent to end the year at £46m compared with £95.5m in 2021/22, with Nexus again noting the impact of Ilke’s collapse. The order book had grown to £57.2m by the end of January 2024.

Net cash totalled £14.6m, down by 40 per cent from the previous year’s £24.2m.

In his statement accompanying the annual report, Kilner said that Nexus performed well in the first half of the financial year but struggled amid Ilke’s collapse and the housebuilding slowdown in the second half. “The decline in house sales negatively impacted several of Tamdown’s customers,” he said.

The firm’s client base includes major homebuilders Taylor Wimpey, Persimmon, Vistry, Barratt and Bellway.

Declining market conditions prompted an operational review and restructuring process that included the sale of two Nexus businesses (TriConnex and eSmart Networks) in February 2023. “This has now been completed and it ensures we are well-placed to benefit when housebuilding output improves again,” Kilner said.

Despite the downturn in 2022/23, chief executive Charles Sweeney said he was optimistic about the near term. “Our expectations are that conditions will start to improve in the second half of 2024, as the economy picks up and with the added potential of government incentives prior to a general election,” he said.

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