The
information contained within this announcement is deemed by the
Company to constitute inside information pursuant to Article 7 of
EU Regulation 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 as
amended.
15 January 2025
Nexteq
plc
("Nexteq"
or the "Group")
Trading
Update and Notice of Results
Nexteq (AIM: NXQ), a leading
technology solutions provider to customers in selected industrial
markets, today provides an update on
trading for the financial year ended 31 December 2024
("FY24").
Trading
performance
The Board confirms that trading for
2024 was in line with expectations, as set out in the
31st October 2024 update. Group revenue is expected to
be $86.7m (FY23: $114.3m), reflecting a backdrop of economic
challenges across the markets, and wider industry de-stocking, as
well as the delay of several customer projects into the new 2025
budget year. As predicted, gross margin performance was maintained
through Q4 at historically high levels, but with a reducing run
rate, with operating costs reducing as expected. As a result, full
year adjusted profit before tax is expected to be in line with
market expectations1.
The Quixant Gaming business posted
revenues of $54.8m, 21% down against the $69.2m recorded in 2023,
largely driven by reduced volume of sales of Gaming Hardware
Platforms to the largest customers, as they faced challenges in
their own market. The Industrial displays business, Densitron,
achieved revenues of $31.9m, 29.3% down against the $45.1m recorded
in 2023. This was driven by continued de-stocking and the
impact of end-of-life components in 2023.
Financial
position
Net cash on 31st December 2024 was
$29.1m (FY23: $27.9m), in line with Board expectations and
reflecting continued healthy operating cash flow generation. The
Group's share buyback programme returned $6.7m of cash to
shareholders in the second half of 2024, resulting in the cash
balance reducing from $36.9m at HY24.
Outlook
The Board expects revenues in 2025
to be broadly in line with 2024, and with a reduced margin due to
short-term pricing pressure and investment in market strategy for
key opportunities in the Gaming sector. Following a business
restructuring in Q4 2024, operating costs have been reduced by
$1.6m and refocussed on the areas of the business driving new
product development and new business wins. With significant
secured business wins across the Group for 2025, the Board expects
positive movements in order book generation to be seen through
2025, and into 2026.
Notice of
Results
The Group expects to report its full
year results for 2024 on 19th March 2025.
Duncan Faithfull, Chief Executive Officer of Nexteq plc,
commented: "2024 was a year of unprecedented change
within our organisation, and significant challenges in our
markets. The continued de-stocking within our customer base,
alongside continuing economic uncertainty impacted our
revenues. The newly installed Senior Leadership Team (SLT)
has conducted a strategic review of the business and are now
focussed on the delivery of a plan designed to deliver a
diversified group, and a significant improvement in
profitability.
In
Q4 2024 The SLT structured the business to focus on our core
objectives and is now focussed on delivering the key milestones of
a three-year plan that will deliver significant growth, driven by
organic growth within our current product suite, alongside M&A
activity to accelerate the growth in our target market verticals,
utilising the robust financial position built in recent
years.
2024 has been a tough trading year, but with the new
structure, leadership and three-year plan, we are excited about the
potential to deliver significant growth."
1 The range of forecasts for
the year ended 31 December 2024 at the date of this announcement is
revenue of between $84.5m and $85.5m with a consensus of $85.0m
with consensus adjusted profit before tax of at least
$6m.
|
Nexteq plc
Duncan Faithfull, Group Chief
Executive Officer
Matt Staight, Group Chief Financial
Officer
Nick Jarmany, Interim,
Chair
|
Tel: +44
(0)1223 892 696
|
|
Nominated Adviser and Broker:
Cavendish Capital Markets
Ltd
Matt Goode / Teddy Whiley (Corporate
Finance)
Tim Redfern / Harriet Ward
(ECM)
|
Tel: +44
(0)20 7220 0500
|
|
Joint Broker:
Canaccord Genuity Limited
Simon Bridges / Andrew
Potts
|
Tel: +44
(0)20 7523 8000
|
|
Financial PR:
Alma Strategic
Communications
Hilary Buchanan / Kieran
Breheny
|
Tel: +44
(0)20 3405 0205
|
About Nexteq
Nexteq (AIM: NXQ) is a strategic
technology solutions provider to customers in selected industrial
markets. Its innovative technology enables the manufacturers of
global electronic equipment to outsource the design, development
and supply of non-core aspects of their product offering. By
outsourcing elements of their technology stack to Nexteq, customers
can focus their product development effort on the most critical
drivers of their business' success.
Our solutions are delivered through
a global sales team and leverage the Group's electronic hardware,
software, display and mechanical engineering expertise. Our Taiwan
operation is at the heart of Asian supply networks and facilitates
cost effective manufacturing and strategic supply chain
management.
The Group operates in six countries
and services over 500 customers across 47 countries.
Nexteq operates two distinct brands:
Quixant, a specialised computer platforms provider, and Densitron,
leaders in human machine interface technology, each with dedicated
sales, account management and product innovation teams. Founded in
2005, and later floating on the London Stock Exchange's AIM stock
market as Quixant plc, the Group rebranded to Nexteq in
2023.
Further information on Nexteq and
its divisions can be found at www.nexteqplc.com.