LONDON (ShareCast) - (Sharecast News) - Essential infrastructure provider Nexus saw revenues move ahead in the first half of its trading year but warned of margin pressures as a result of Brexit concerns.
Revenues at Tamdown, its civil engineering arm, were up 6.1% year-on-year, but the unit faced several delays and changes to customer build programmes, affecting resource planning, increasing mobilisation costs and impacting efficiency.

Nexus warned that the current trading conditions, which it attributed in part to the uncertain political backdrop, would continue over the second half, leading it to forecast that gross margins in the back half of the year would be little changed from the roughly 13% achieved during the first six months, and in turn "materially" reduce its full-year profits.

However, despite the difficult market backdrop, Tamdown continued to win work from its extensive housebuilding client base, with an order book of £145m - up 22.5% year-on-year.

TriConnex performed in line with the board's expectations, with a 40.9% stronger order book of £163m, while eSmart continued to scale up, as reflected in its order book of £3.0m, a 500% year-on-year improvement.

Looking forward, Nexus believes it remains in a "strong position to deliver organic growth on the back of the continuing status of the UK housing market", but like many industry suppliers, warned that it was experiencing a slow-down as a result of Brexit concerns.

Chief executive Mike Morris said: "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 H1 are likely to continue into H2 and although management are addressing these issues, they will have a significant impact on group profitability this year."

As of 0840 BST, Nexus shares had tumbled 29.01% to 151.20p.

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