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LONDON (Alliance News) - Shares in Nexus Infrastructure PLC plunged early Monday after the company warned that challenging trading in its Tamdown civil engineering business will materially reduce overall profit for the current financial year.
Shares in the company were down 31% at 147.80 pence each in morning trade in London.
"The underlying demand in the UK housing market remains strong, and Nexus is well positioned within this market. However, customer delays and the resultant cost pressures experienced by Tamdown in first half are likely to continue into second half, and although management are addressing these issues, they will have a significant impact on group profitability this year," said Chief Executive Mike Morris.
In the financial year ended September 30, 2018, the company recorded pretax profit of GBP9.2 million.
"Whilst the near-term outlook for Tamdown is disappointing, we are continuing to see a solid order book which gives us confidence in future growth. I am pleased to report that TriConnex and eSmart are performing well and in-line with expectations." Morris added.
For the six months to March-end, Nexus expects to have achieved revenue of GBP71.0 million versus GBP62.9 million a year ago.
Tamdown revenue for the first half was up 6.1% year-on-year. TriConnex, which provides utility connections, posted 30% year-on-year increase in revenue for the interim period, with gross margin of 31%. Nexus didn't provide the revenue result for eSmart.
The company's order book at March 31 stood at GBP311 million, up 32% year-on-year, with growth across Tamdown, TriConnex and eSmart Networks.
