Nasstar's Interim Results
In news / By Lydia Cooper / 25 September 2017
Today Nasstar releases a very positive set of interim results and to discuss in more detail, CEO Nigel Redwood talks to Andrew Scott at Proactive Investors.
Nigel describes how a significant focus for Nasstar in the last 6 months has been it’s ’10-19’ strategy which aims to bring the acquisitions made since 2014 together to maximise cost efficiencies and realise revenue opportunities.
’10-19’ is the internal name given to Nasstar’s three year plan in which the senior management team have asked all staff to spend 10% of their time working on their job and not in their job, on priorities that have been set in order to hit certain goals for 2019. The ultimate strategic goal of the ’10-19’ initiative is to grow EBITDA as a percentage of sales from 20% to 25% in 2019.
Nasstar has always been a recurring revenue business and Nigel explains that growing this figure is a key strategic aim therefore, to see the current figure running at 90% of total sales is very pleasing and key to the success of the organisation’s growth strategy. Not only that, but a strong recurring revenue stream delivers a clear visibility of ongoing performance to investors.
In other areas, Nasstar’s net debt has improved and stands at £1M at the end of H1 compared to £4.9M at the end of H1 2016. Nasstar used bank funding to secure an acquisition early on its strategy therefore this progress is extremely encouraging.
In terms of new business growth, Nasstar is pleased to be involved at the proof of concept stage with a large organisation of over 1,000 users. If successful a contract is likely to be secured at the end of H2 and will therefore impact 2018 revenues.
Operationally, Nasstar has realised the benefits of the 2016 Modrus acquisition and its 24/7 support function now operates out of the existing Modrus New Zealand office. Nigel explains that this move is about service but also about recognising all the businesses that have been acquired throughout the years and ensuring the organisation is operating in the most efficient way.
Outside of operations and Nasstar has been recognised in the London Stock Exchange Group’s 1,000 companies to inspire Britain list for the second year running. This demonstrates recognition of Nasstar’s high revenue growth as well as growth through acquisition and organic growth.
Finally, earlier in the year Nigel describes 2017 as a ‘pivotal year’ for the organisation – 6 months in and a lot of the hard work to support the ’10-19’ strategy is starting to make a positive impact, however Nigel stresses that this is a three year plan and there is still a lot of work to be done around reorganisation and consolidation of data centres for example. However, the ultimate goal is to come out of the three year plan truly as one organisation and therefore placing Nasstar in a unique position within the market as one of the leading providers of managed hosted IT.