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

Results for the year to 31 December 2017

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 2017. 


Financial Highlights 
  • Revenue up 31% to £24.5m (2016: £18.7m) (with underlying growth excluding acquisitions of 9%+)

  • 88% of 2017 revenues generated from contracted recurring services (2016: 88%)

  • EBITDA* up 47% to £5.2m* (2016: £3.6m*)

  • Adjusted EBITDA** up 50% to £5.6m** (2016: £3.5m**)

  • Adjusted EBITDA** margin increased to 23% (2016: 20%)

  • Adjusted profit before tax*** up 87% to £3.5m*** (2016: £1.9m***)

  • Reported loss before tax £1.2m (2016: £1.8m)

  • Proposed final dividend for the year of 0.06p per share, a 15% increase on prior year

  • Year-end Net Cash ahead of expectations at £1.0m (31 December 2016: Net Debt £2.8m) 

  • Loss Per Share 0.2p (2016: 0.3p)

  • Adjusted earnings per share up 24% to 0.51p *** (2016: 0.41p***)

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

 **Comprising earnings adjusted for interest, taxation, depreciation, profit on sale of fixed assets, amortisation, share based payments and exceptional items (being costs in relation to acquisitions during the year, reorganisation costs, 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. 

+ Excluding the impact of acquisitions in both years 


Operational Highlights 
  • 2017 was focused on maximising the opportunity that was presented by the previous three years' acquisition activity. This focus saw the launch of the "Nasstar 10-19" programme designed to deliver an increased strategic focus to create one fully integrated business.

  • The resultant benefits of the "Nasstar 10-19" plan were realised with the Adjusted EBITDA** margin increasing to 23% against the target of 25% by the end of 2019.

  • Top to bottom organisational structure redesigned to deliver an integrated company, with one team for each function across the Group, managed by one leadership team.

  • Organic business development progressed well in 2017 with clear signs that the Nasstar offering is continuing to be more attractive to clients of an increased size.

  • Our industry leading capability in "public/private" cloud hybrid solutions was in evidence in November's contract win which secured a three-year contract to deliver a fully managed solution to a global workforce of 1,000 users.

  • Significant investment was made in the account management team designed to develop a consistent first class approach to customer service and maximise the revenue opportunity presented by the enlarged customer base.

  • All UK based out of hours support migrated to the Nasstar New Zealand office, generating operational efficiencies across the Group.

  • As part of the "Nasstar 10-19" programme, plans were initiated to close three of the Group's seven UK data centres. One of these three was successfully closed in 2017 with the final two now due for closure during 2018.

  • The Group's professional services team has been active on the development of its own application functionality, enhancing Nasstar's own IP whilst helping contribute to customer retention.

  • Broadening of the professional services team remit to create a public cloud centre of excellence, enabling Nasstar to deliver value added consultancy to clients that enables them to maximise the benefits of the public cloud feature set.

  • For the second year running Nasstar is listed in the "1,000 Companies to Inspire Britain".


Nigel Redwood, Chief Executive Officer of Nasstar, commented: 

"2017 was a pivotal year for Nasstar, a year in which we focused on maximising the opportunities which our previous acquisition activity had created. 

"The launch of the "Nasstar 10-19" strategy focused each and every employee on key priorities and laid solid foundations to help us deliver against our target to raise margins from 20% to 25% of revenue by the end of 2019. 

"I was delighted to announce the November contract win that saw us secure a 1,000 user public / private hybrid cloud customer. This deal, amongst others in 2017, serves to endorse the technical strategy that we adopted when embracing the integration of the public cloud into our private cloud services. I am confident that this will continue to make Nasstar's offerings very relevant and attractive to the market in 2018." 


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 

2017 was a year of integration, consolidation and ensuring the structure of the business was appropriate to take advantage of the historic acquisitions, whilst preparing the business for future growth. The creation of a single team for each function, led by a unified management structure was key to unlocking operational efficiencies, whilst creating a structure to deliver a consistent first class customer experience across the Group. 

Against this backdrop and in a year in which no acquisitions were undertaken I am very pleased to see that the underlying strength of the business is evident and clear to see from the financial results achieved. 

Underlying revenue growth of 9%+ was in line with management expectations and targets which I believe is healthy for a managed service provider. Overall revenue grew 31% to £24.5m, of which 88% was generated from long term contracted recurring revenue customers, clearly demonstrating the health and strength of the business. 

Even more pleasing was the strong improvement in EBITDA* margins that our "Nasstar 10-19" strategy has delivered.  Adjusted EBITDA** grew an impressive 50% to £5.6m from £3.8m in 2016. Adjusted EBITDA** margin was 23%, meaning we are well on our way to our goal of 25% by the end of 2019. 

Careful cash control, particularly during a period of growth and integration is very important. Therefore, to see us outperform our year end cash target was encouraging. Net Debt at the end of 2016 was £2.8m, with 2017 seeing an improvement of £3.8m to £1.0m of Net Cash at 31 December 2017. As a result of bank covenant leverage targets being surpassed it was pleasing to see the interest margin on our fixed term loan reduce by 0.25% to 2.50%. 

Our progressive dividend policy has continued with a final dividend for 2017 being declared of 0.06p (2016: 0.052p) per share, a 15% growth on our dividend declared last year. 

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 Company 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 continue to work very closely with Microsoft and Citrix and have developed even closer relationships with Microsoft as more and more of our solutions incorporate aspects of their public cloud offerings.   

Our "Nasstar 10-19" strategy enters year two in 2018, and we have already launched internally the priorities for 2018 that will continue to drive a focus on operating efficiencies by truly acting as one company, driving innovation and continuing to embed a first-class customer experience at the heart of what we do.

Finally, the dedication, hard work and enthusiasm of all of our staff is the backbone of all we achieve and underpins the success of the Group. I would like to express my gratitude to all new and old team members alike. 

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, is head quartered in Telford, UK, with regional offices in Northampton, London and Bournemouth whilst 24 x 7 support is delivered from its Auckland office in New Zealand. Nasstar is an accredited Microsoft Gold Partner, a Tier 1 multi-region Cloud Solution Provider (CSP) partner for Microsoft Office 365 and Azure, an authorised Citrix CSP Partner, ITIL aligned and is certified to ISO 27001. 

Nasstar specialises in building bespoke cloud hosted services to manage a client's entire application set, tailor made to suit specific 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 benefits 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, offering Hosted Desktop, Office 365, 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 user 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 Office 365 and Azure. The programme enables the Group to supply Office 365 on a truly flexible per user per month model, with the Group contracting with the end user and retaining full invoicing and customer support. In addition, Nasstar is Shared Computer Activation (SCA) accredited. This SCA accreditation enables Nasstar to integrate Office 365 fully with hybrid platforms. Nasstar are one of a few Microsoft partners that hold such accreditation. This has enabled the Group to further integrate the Office 365 offering into its hosted desktop solution, embracing the innovations of Office 365 as a clear differentiator over its competitors. In addition, the Cloud Solution Programme (CSP) enables the Group to benefit from the economies derived from the use of the Microsoft 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. In 2017 this team has expanded its knowledge to include the in-depth feature set of Office 365. 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 offer clients a one-stop solution for all their essential applications. 

Nasstar recognises that cyber security continues to be a rapidly changing landscape and therefore has bolstered its internal capabilities by partnering with a specialist in this area, Falanx Group Limited (Falanx). Falanx supplies protective monitoring services and cyber incident response support for Nasstar as well as additional consulting services for customers. Cyber Defence as a Service for clients continues to be a growing service line adopted by the customer base. 



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, in 2017 we have invested 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, representing circa 50% of revenues between them. We have invested heavily in developing the skills and know-how to service these cornerstone verticals and are now planning to replicate the go to market strategy that has worked well in Legal and Recruitment to the other five verticals (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 in 2017 focused 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 specific goals by the end of 2019, with a view to unifying the Group in structure, process and name. As previously detailed, this initiative focuses on the following key strategic integration and synergy realisation objectives: 

  • Align the whole team to a common mission: clear goal, clear priorities;

  • Develop a common Group-wide set of KPI's and governance, ultimately designed to increase the Adjusted EBITDA** percentage from the 20% achieved in 2016 to 25% by the end of 2019;

  • Develop a single and excellent approach to customer service that is continually improving and which directly contributes to reducing customer churn through increased customer satisfaction;

  • Consolidate technology, licences and platforms, which includes the consolidation of data centres and technical platforms to save cost and increase stability;

  • Integrate and streamline teams and reporting structures to increase revenue per head by 25%;

  • Automate to facilitate efficiencies and realise economies of scale, to:

o  automate the key manual processes;

- thus breaking the link betweem revenue and people;

- whilst reducing the time between contract signature and revenue recognition.

  • Refine the market proposition and service pillars to maximise the fit with our target customers and verticals; and
  • Create a structured and effective sales engine that:

o  continues to meet or beat the Group's current organic growth rate;

o  has a sales mix that maintains at least 85% recurring revenue;

o  delivers industry focused solutions, combining private & public clouds; and

o  continues to add key customer contracts each year. 

During 2017 we have made considerable progress in all objectives of the "Nasstar 10-19" programme, highlights being: 

  • Top to bottom organisational structure redesigned to deliver one true business, with one team for each function across the Group. A new leadership and management structure was established ensuring all teams are managed by one leadership team, creating a true single business in the process.
  • Organic business development has progressed well in 2017 with clear signs that the Nasstar offering is continuing to be more attractive to clients of an increased size. Our industry leading capability in "public/private" cloud hybrid solutions was in evidence in November's contract win which secured a three-year contract to deliver a fully managed solution to a global workforce of 1,000 users.

  • As part of "Nasstar 10-19" we centralised the projects function across the Group, opening up a larger pool of resource and skill to any one project. In addition, install processes were standardised where possible and investment made in automation. The benefits of this programme are already evidenced by the accelerated on boarding of certain larger contracts won towards the end of 2017.

  • We have invested significantly in the account management team to ensure that customers are proactively managed and revenue opportunities within the wider client base are maximised.

  • All UK based out of hours support was migrated to the Nasstar New Zealand office, thus generating operational efficiencies across the Group.

  • Plans were initiated to close three of the Group's seven UK data centres. One of these three was successfully closed in 2017 with the final two now due for closure during 2018.

  • As part of establishing a "single & excellent" approach to customer service, that is continually improving, we have:

o  consolidated all CRM systems across the Group onto one new Dynamics CRM platform; 

o rolled out Client Heartbeat as a single and central method of measuring customer satisfaction; 

o  rolled out People HR and Office Vibe as the central platforms for managing talent across the Group; 

o  rolled out Power BI to deliver management KPI dashboards giving the management team real time information to make timely decisions; 

o  merged and centralised the scope of our ISO27001 certification to include all areas of the business; 

o  merged and centralised ITIL processes across the Group, designed to deliver a consistent customer experience to all customers; 

o  selected Cherwell as the single IT Service Management tool, with the roll out gaining momentum with full adoption expected in H1 2018; and 

o  initiated the upgrade of Dynamics NAV, the Group's financial system, designed to increase automation. 

Continuing the strategic momentum, we have already launched the priority projects for 2018 that are all designed to deliver a continually improving customer service and efficiencies in delivery. Delivery of these important initiatives is likely to see 2018 capital expenditure running at a higher level than 2017. The 2018 strategic focus can be summarised as follows:  

  • A continuation of the single leadership team and single team for each function philosophy, with clear focus on continuing to embed the right management structure acting on the right management information and KPI's.

  • 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 company.

  • To embed further the Nasstar security centric culture, placing "security at the heart" of all processes and technologies.

  • We recognise that the management of talent is a significant contributor to the success and health of the business. The competitive landscape for attracting technical skills is more challenging than ever and as a result, further investment is being made into our training and development strategy, health and wellbeing strategy, employee engagement techniques and apprenticeship programmes. All are designed to help attract and retain the best talent in the industry.

  • Investment into product strategy and service acceptance will continue in 2018 to ensure that innovation continues to be at the heart of our service capability, ensuring that our strategic product direction is well mapped in what is a very fast moving sector.

  • Investment in automation and systems integration continues in 2018 with the roll out of Cherwell being pivotal to further integration benefits being recognised.

  • Nasstar will continue to focus on its vertical markets, defining deeper and more selective criteria for which customers to target. In addition, structured account plans for key customers are designed to ensure our long-term relationships with clients are maintained.

  • We will continue to invest in automation and improved processes and technical capabilities in our delivery teams in order to further decrease the on boarding time for clients.

Nasstar are prepared for the new demands of the General Data Protection Reregulation (GDPR) coming into force on the 25th May 2018. Security by design has always been at the heart of the technical solutions at Nasstar as highlighted by the strategic focus on our security centric culture. 



The Company remains well positioned, with 88% of 2017 revenue generated from contracted recurring services and a proven cash generative business model. Investment continues in innovation with our public and private hybrid cloud solution gaining momentum with notable contract wins. 

The Group continues to differentiate itself 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. 

The "Nasstar 10-19" programme has good momentum, with clear margin improvement in 2017 giving us a visible path to our target of increasing Adjusted EBITDA** margin to 25% by the end of 2019. 

We continue to assess the wider economic implications of the UK's decision to leave the EU, whilst the Board recognises the continued uncertainty in the macro economic outlook. 

We believe that solutions delivered on public and private cloud hybrid technologies will continue to form the basis of a growing market and I therefore believe Nasstar is well positioned to take advantage of the continuing opportunity. Organic growth, combined with improving EBITDA* margins and a clear strategy for the business should continue to deliver strong improvement in shareholder value.

Nigel Redwood

Chief Executive Officer