Revenue rises for Telford-based Nasstar

The Telford-based IT services provider reported a seven per cent year-on-year increase in revenue to £25.7 million.

It has also seen pre-tax losses reduce from £1.6 million in 2017 to £1.4 million last year.

In the year ended December 31, the AIM-listed group scored a significant new three-year contract win with a top 50 British law firm to deliver a fully managed public/private hybrid cloud solution to 850 users, providing "clear evidence" of the benefit of its "Nasstar 10-19" investment plan.

Net cash increased 50 per cent to £1.5 million but Nasstar still turned in a statutory loss per share of 0.17p per share – a slight narrowing when compared to the 0.23p loss recorded in the prior year.

Chief executive Nigel Redwood said: "Despite the very challenging macroeconomics of the technical sector, caused by wider economic uncertainties combined with increasing cost pressures and competition, Nasstar has had a positive 2018.

"The 'Nasstar 10-19' programme has focused on key areas to mitigate as much as possible the market pressures seen across the technical sector whilst structuring the business as a single entity."

Mr Redwood believes the company is "now better positioned than ever" to take advantage of its "increased capabilities".

"2018 was the second year of our three-year integration strategy and I am excited by the organisation this strategy has created,” he said.

As with many businesses, the continued uncertainty over Brexit has impacted Nasstar.

"The protracted Brexit process continues to create an uncertain economic climate, the tangible effect of which for Nasstar has been the lengthening of the decision-making process seen in some opportunities in the sales pipeline. The majority of our customers are UK headquartered so are impacted by the continued climate of macroeconomic uncertainty. The Board monitors the situation on an ongoing basis and is prepared to make alterations to strategic plans and investment decisions as appropriate.

"In the meantime, we will continue to work hard to differentiate Nasstar by focusing on vertical specialisms, whilst investing heavily in account management capabilities, technical skills and support processes all designed to deliver first class customer service," Mr Redwood added.

Nasstar's gross margins reduced to 65 per cent from 68 per cent the year before, primarily due to increased licence costs and the "continued pressure" on exchange rates, the margin on "some" hosted licences reduced.

The company added: "An initiative to mitigate this pressure is being undertaken as part of the product strategy work started during the period, but is not expected to bear fruits until next year."

Nasstar's operating expenses were broadly flat at £17.8 million.

Elsewhere, Nasstar chairman Peter Daresbury revealed he will step down from the board after 12 years on October 23.

Mr Daresbury will be replaced be Nick Bate, who joined the board as a non-executive director in January 2014.

Nasstar employs about 200 people across its operations, with more than half of those at its Queensway Business Park headquarters in Telford.