31 October 2024
Nexteq plc
("Nexteq" or the
"Group")
Trading Update and Appointment of
CFO
Nexteq (AIM: NXQ), a leading
technology solutions provider to customers in selected industrial
markets, today provides an update on trading for the year
ending 31 December 2024, and the appointment of a new Chief
Financial Officer.
Ongoing Business
Review
Duncan Faithfull, who was appointed as the new CEO of
Nexteq in August 2024, has been conducting an in-depth business
review of the Group, looking at trading patterns across both
brands; the growth drivers for the medium term; the investment
required to drive that growth and the operational mechanisms to
deliver it. Whilst there are short-term trading headwinds, the
investment in new products and solutions gives significant optimism
for the future.
Trading
performance
Since the H1 2024 results announced on
10th September 2024, the Group has continued to see
ongoing, cross industry de-stocking, resulting in reduced order
intake levels. In addition, while customer retention remains
impressively high, we have seen certain customer product and
project launches being delayed into Q1 2025, from Q4 2024, with
customers opting to delay agreed new project expenditure into a new
budget year.
As a result, FY24 Group revenue is expected to be
10-12% below previous market expectations1. Current
gross margin performance is expected to continue through 2024, and
the Board and Senior Leadership Team is maintaining a strong focus
on cost management. The Board expects FY24 Group adjusted profit
before tax to be at least $6.0m, driven by the lower revenues.
The Group continues to generate healthy cash flow,
with a net cash balance of $33m on 30 September 2024. To date the
Group has spent approximately £4.6m on its share buyback programme,
representing c.7% of the Group's issued share capital, and intends
to continue with this programme. The Board expects year end net
cash to be c$30m considering the impact of the anticipated share
buyback up to the 10% authority granted by shareholders at the 2024
AGM.
Directorate
change
In line with the Board Transition announcement
released on 24 July 2024, Johan Olivier has today stepped down from
the Board, and his role as Group Chief Financial Officer.
Following an extensive external search process, the
Board is pleased to announce that Matt Staight, Group Financial
Controller at Nexteq, will take over as Group Chief Financial
Officer, in an orderly handover from Johan. Matt will also be
appointed to the Board, subject to the required AIM due diligence
process, as soon as possible. A further announcement will be
made in due course in this regard.
Matt is a highly experienced finance
professional, and having joined Nexteq in 2022, he has a
comprehensive knowledge of the Group's finance functions and
markets, as well as already being significantly involved in the
Group's growth projects. During the handover period,
Johan will act as a consultant to Nexteq, to support the orderly
handover of duties to Matt.
Outlook
The second phase of the intensive business review by
the new CEO, CFO, and the Nexteq Senior Leadership Team, is
focusing on 2025. The current order book going into 2025 remains
lower in value than previously anticipated, and there is still
uncertainty around the ongoing de-stocking levels as we progress
through the 1st half of 2025. However, the
pipeline of new product launches and new customer projects remains
encouraging, with several new customer wins being integrated
through 2025, with the full year revenue and profit impact of these
being seen in 2026. Nexteq plans to continue to invest in
product and operational excellence, which will have a consequential
impact on the Group's 2025 performance whilst enabling growth in
2026 and beyond.
Duncan, Matt and the Nexteq Senior Leadership Team
intend to present their Growth Strategy to investors in Q1
2025.
Duncan Faithfull,
Group CEO of Nexteq, commented:
"Whilst it is
disappointing to have customer projects extended beyond the
Company's financial period end, we remain laser focused on
delivering to our customers high quality, innovative new products
together with outstanding levels of service - the foundations of
our market leading reputation. Whilst we are engaged in a detailed
review of the business, I am encouraged by the pipeline from an
increasingly diversified range of products and services, supported
by underlying market drivers and a robust balance sheet.
Growth expectations in 2026 and 2027 will be fueled by the
development work being done now.
"On behalf of the
Board, I would like to thank Johan for his contributions to the
business over the last three years, and wish him the very best for
the future, once his period of consultancy to Matt is completed. I
would like to welcome Matt to the Group CFO role, and I look
forward to working with him closely and benefiting from his deep
knowledge of the business as we set out our detailed execution
plan."
1. The range of
forecasts for the year ended 31 December 2024 prior to this
announcement was revenue of between $93.9m and $96m with a
consensus of $95m with consensus adjusted profit before tax of
$9.4m. Consensus net cash forecast as at 31 December 2024 was
$33m.
|
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.
This announcement contains information for the
purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
