Here you will find the details of our previous years business review.

Results for the year to 31 December 2018

Nasstar plc; (AIM: NASA), the provider of hosted managed and cloud computing services, is pleased to announce its preliminary results for the year ended 31 December 2018. 


Financial Highlights 


  • Revenue up 7% to £25.7m (2017 restated: £24.1m)

  • 91% of 2018 revenues generated from contracted recurring

    services (2017: 91%)

  • EBITDA* up 9% to £5.2m* (2017 restated: £4.8m*)

  • Adjusted EBITDA** up 6% to £5.6m** (2017 restated: £5.3m**)

  • Adjusted EBITDA** margin 22% (2017 restated: 22%)

  • Adjusted earnings per share up 9% to 0.50p *** (2017 restated:


  • Statutory Loss Per Share 0.17p (2017 restated: 0.23p)

  • Proposed nal dividend of 0.09p per share (2017: 0.06p per

    share), a 50% increase on prior year

  • Year-end Net Cash+ at £1.5m (31 December 2017: Net Cash £1m)

  • IFRS 9, 15 and 16 adopted as at 1 January 2018, prior year

    restated for IFRS 15

    * Comprising earnings adjusted for interest, taxation, depreciation, pro t on sale of xed assets and amortisation. Refer to Alternative Performance Measures for reconciliation to GAAP measure.

    **Comprising earnings adjusted for interest, taxation, depreciation, pro t on sale of xed assets, amortisation, share based payments and exceptional items (being costs in relation to reorganisation and data centre closure, share repurchase costs and provisions). Refer to Alternative Performance Measures for reconciliation to GAAP measure.

    ***Adjusted for amortisation of acquired intangibles, share based payments and exceptional items Refer to Alternative Performance Measures for reconciliation to GAAP measure.

    +reported on a consistent basis with prior periods excluding IFRS 16 property lease liabilities from debt



Operational Highlights 


  • Second year of the "Nasstar 10-19" plan, with further investment in key strategic areas designed to:
    • secure future long-term growth
    • speed up delivery and recognition of revenues
    • improve efficiencies
    • retain competitive advantage
    • develop sales pipeline of larger opportunities
  • Significant new three year contract win with top 50 UK law firm to deliver a fully managed public/ private hybrid cloud solution to 850 users provides clear evidence of the benefit of the “Nasstar 10-19” programme – demonstrating ability to win contracts of increasing complexity and size

  • The implications of IFRS 15 are that contract setup revenues are spread over the full term of the customer contract rather than being recognised at the point of installation. The cost of the install is recognised as an asset with the cost recognised over the contract term in line with revenue. Therefore, in order to expedite short and long-term revenue delivery, the leadership team chose to invest into additional engineering resource.
  • As a result of revenue recognition in respect of one-o setup revenues changing on the adoption of IFRS 15 combined with continuing cost pressure associated with licensing, gross margin percentages have reduced in 2018. In response to this, towards the end of 2018 Nasstar initiated further mitigation works designed to improve margins through a combination of pricing strategies and licensing cost reductions through driving further technical consolidation. In addition, the “Nasstar 10-19” programme objective around automation is designed to help further in this area.
  • Further data centre rationalisation achieved with closure of the Singapore site. Rationalisation programme expected to complete in 2019 with the reduction of the UK footprint by a further two sites; Microsoft Azure (“Azure”) being utilised for the certain workloads.
  • Development of an innovative talent management programme designed to help attract and retain the best talent in the face of an extremely competitive market for technical resource.
  • Further investment into product strategy and increased account management capability.
  • Principal impact of adoption of IFRS 9, 15 and 16 has been to defer contract set up revenues (and related costs) over the term of the customer contract, resulting in:
    • Mitigating actions taken to counter margin impact, including pricing strategies and licensing cost reductions

    • Additional investment in engineering resource to expedite short and long-term revenue delivery

    • Adjusted EBITDA margin target associated with the “Nasstar 10-19” programme reset to 23% by the end of 2019

  • Nasstar listed in the "1,000 Companies to Inspire Britain" for the third year running



For further information, please contact:  

Nasstar plc                                                                  +44 (0) 1952 225 000

Nigel Redwood, Chief Executive Officer              

Niki Redwood, Finance Director                           


finnCap Limited (Nominated Adviser & Broker)               +44 (0) 20 7220 0500

Julian Blunt, James Thompson (Corporate Finance)

Stephen Norcross (Corporate Broking) 


IFC Advisory Limited (Financial PR & IR)                       +44 (0) 20 3934 6630

Tim Metcalfe

Graham Herring

Miles Nolan


Chairman's Statement 


I am pleased to report continued improvements in our key KPI’s with contracted recurring revenues representing 91% of total revenues demonstrating Nasstar’s strong visibility of earnings. Total revenues increased by 7% for the year, which is a very positive outcome and slightly ahead of management expectations. This has been achieved despite the inertia in the wider market place caused by the uncertainties in the economic climate.

The management team’s concentration on the “Nasstar 10- 19” priorities and commitment to delivering the three-year strategic plan has had a positive e ect on EBITDA, which grew at 9%, a slightly faster rate than sales. Continued re nement of the Group strategy has been imperative to ensure Nasstar’s capabilities are evolving to maximise the opportunities and mitigate the threats seen in the technical sector. As a result, I am very pleased to see the positive impact this has had on our customer relationships and capability in delivering larger more complex solutions.

Net Cash was in line with management expectations giving me continued con dence to support our progressive dividend policy with a nal dividend for 2018 being declared of 0.09p per share (2017: 0.06p), a 50% increase on last year.

The “Nasstar 10-19” strategy has structured the business to be able to more e ectively recognise revenue and cost synergies from potential acquisitions. As a result, the Board continues to be alert to further opportunities in this area.

The implications of the decision of the UK to leave the EU are obviously wide ranging, but the most notable one impacting Nasstar is the exposure that the Group has to the US Dollar exchange rate, as previously reported. On a trading front, our target market has predominately been UK head quartered businesses and therefore any immediate impacts of the UK leaving the EU are not expected to be material. We are alert to the fact that the continued delay in the BREXIT process could cause further delays in decision making which may slow new business wins, we also recognise that there is an increased risk of business failure within the customer base. As a result, the Board monitors the situation closely on a monthly basis and is prepared to adjust investment plans if necessary.

The continued development of the single leadership team has seen pleasing advancements in the capabilities of the functional management team driving further organisational resilience. Finally, I recognise that what makes Nasstar great is the combined effort of every member of the team, and I would like to place on record my thanks and appreciation for the hard work and dedication of every member of the Group


Lord Daresbury



Chief Executive's Report 

Overview of the Business 

The Group is a provider of hosted managed and cloud computing services. We integrate private and public clouds, supplying a robust, secure and stable hosted information technology service to business customers. The Group provides a true end to end service for clients providing them with enhanced IT performance and greater cost control over their IT function.

The Group owns its primary data centre and is head quartered in Telford, UK, with regional o ces in Northampton and Bournemouth whilst 24x7 support is delivered from its Auckland o ce in New Zealand. Nasstar is an accredited Microsoft Gold Partner, a Tier 1 multi-region Cloud Solution Provider (CSP) partner for Microsoft O ce 365 (“O365”) and Azure, an authorised Citrix CSP Partner, ITIL (a set of detailed practices for IT service management) aligned and is certi ed to ISO 27001.

Nasstar specialises in building bespoke cloud hosted services to manage a client’s entire application set, tailor made to suit speci c industries, designing public, private and hybrid cloud solutions to meet the objectives of the client. Public cloud solutions utilise services from multinational vendors such as Microsoft (“O365” and “Azure”), private cloud solutions are delivered from Nasstar owned and controlled infrastructure whilst Hybrid solutions are an integrated combination of the two. The solution is a highly scalable service that provides bene ts including “Anywhere Access” to computing; a standardised corporate solution that can be accessed globally in multiple languages; generating cost savings when compared to the traditional IT ownership model whilst replacing capital expenditure with a simple usage-based payment model.

The bespoke cloud hosted services include a comprehensive portfolio of solutions, o ering Hosted Desktop, O365, Hosted Exchange, Software as a Service (SaaS), Infrastructure as a Service (IaaS), Azure and Hosted Telephony services. Additionally, the Group hosts a wide variety of software applications on behalf of clients. Further, the Group provides managed networks and an extensive end user support service. All such services are supplied on a price per service per month basis, building a strong long term recurring revenue relationship with clients.

The Group holds a tier one agreement to sell Microsoft’s cloud offerings known as O365 and Azure. The programme enables the Group to supply O365 on a truly exible per user per month model, with the Group contracting with the end user and retaining full invoicing and customer support. In addition, Nasstar is on the Microsoft Quali ed Multi Tennant Hoster program and is Shared Computer Activation

(SCA) accredited. This SCA accreditation enables Nasstar to integrate O365 fully with hybrid platforms. Nasstar are one of only a few Microsoft partners that hold such accreditation. This has enabled the Group to deeply integrate the O365 o ering into its hosted desktop solution, embracing the innovations of O365 as a clear di erentiator over its competitors. In addition, the Cloud Solution Programme (CSP) enables the Group to bene t from the economies derived from the use of the Azure platform, Microsoft’s hyper scale IaaS offering.

Through our central Professional Services Team, Nasstar provides consultancy services on business processes and application development to its clients in its targeted vertical markets. The team has an in-depth knowledge of the feature set of O365. This enhances its added value service to its managed service client base. In addition, through its exclusive sector focus, Nasstar has built strong relationships with the specialist software providers (authors), thus enabling it to o er clients a one-stop solution for all their essential applications.

Nasstar recognises that cyber security continues to be a rapidly changing landscape and therefore bolsters its internal capabilities by partnering with a specialist in this area to supply protective monitoring services as well as additional consulting services for customers. Nasstar puts security at the heart of all operations, service and product design.


Targeting specific verticals and a clear strategy of creating long standing relationships with clients continues to be a focus of the Group. This is enhanced by the strategy to add more value for a client during the life of a contract through the delivery of more services to meet the client’s changing needs. As a result investment has continued in the Group’s account management and service acceptance function in order to ensure the complete service portfolio of the entire Group is available to all clients.

Nasstar’s growth strategy is underpinned by its vertical market specialism and operational focus. Nasstar specialises in delivering services to seven vertical markets, two of which (Legal and Recruitment) form the cornerstone of the customer base. We have invested heavily in developing the skills and know-how to service these cornerstone vertical markets and are now replicating the go to market strategy that has worked well in Legal and Recruitment to the other ve vertical markets (Financial Services, Property Services, NFP/Education, Media and Energy/Logistics).

The Group’s acquisitive strategy, launched in 2014, was driven by the desire to add additional service portfolio capability and as a result Nasstar can now deliver an end to end managed service. From the client computer on the end users’ desk, through the network, telephony and hosting of applications and data, progressing up through the value chain to application consultancy services and development. As a result of this end to end capability, Nasstar’s strategy continues to focus on integrating its acquired businesses and services in order to produce one company in organisation as well as name.

In 2017 we launched our “Nasstar 10-19” programme designed to bring about increased strategic focus across the entire Nasstar business to achieve speci c goals by the end of 2019, with a view to unifying the Group in structure, process and name.

Continuing our strategic momentum during the second year of the three-year “Nasstar 10-19” programme, 2018 saw the launch of a number of projects with speci c objectives designed to deliver continually improving customer service and efficiency in execution. These comprised:

Priority objective: A continuation of the single leadership team and single team philosophy for each function across the entire Group with a clear focus on continuing to embed the right management structure acting on the right management information and KPI’s. Activities against this objective included:-

  • Invested in management and team leader training

  • Improved the leadership team’s business cadence combining strategy development and tactical execution

  • Introduced external management mentoring from an industry and management expert

  • Completed full team integration meaning at the end of the London o ce lease in 2019 it is likely that renewal will not be required, driving further operational cost savings

Priority objective: A continuation of the consolidation of the technical platforms and the development of a new platform based on the best available hybrid technologies, with the goal of facilitating full technical consolidation of all customer systems across the Group. Activities against this objective included:-

  • Closure of Singapore data centre migrating remaining workloads to Azure

  • Data centre rationalisation expected to be completed in 2019 with the reduction of the UK footprint by a further two sites

  • Investment into expanding current platform to enable consolidation

  • R&D team established to work on next generation hybrid design

Priority objective: To embed further the Nasstar security-centric culture, placing “security at the heart” of all processes and technologies. Activities against this objective included:-

    • Evolved a closer partnership with Nasstar’s security partners

    • Introduced mandatory multi factor authentication for all new clients and rebuilds

    • Rolled out an enhanced internal information security programme training regime

    • Employed additional security quali ed resource

    • Increased investment in intrusion prevention technologies

    • Researched and tested intent based and artificial intelligence driven security technologies with a view to adoption in 2019



Nigel Redwood

Chief Executive Officer