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Highlights

  • NXQ’s FY23 revenue decreased 4.7% to USD 114.30 million, impacted by lower monitor sales.
  • Group profit before tax rose 46.6%, driven by higher quality revenues and improved supply chains.
  • NXQ expects 15%-20% lower full-year revenues and 30%-40% below forecasted profit before tax.

Nexteq PLC (LSE:NXQ) is a business-to-business (B2B) technology company. It has a market cap of GBP 64.99mn and is a member of the FTSE AIM All- share index.

In FY23, the company's revenue was USD 114.30 million, marking a 4.7% decrease from FY22, largely due to reduced monitor sales. However, Group profit before tax surged by 46.6%, driven by a shift towards higher quality revenues and improved supply chain conditions. The company also raised its final dividend per share by 10%, paying 3.30 pence per share on August 23, 2024, with an ex-dividend date of July 25, 2024.

Moreover, in FY23, the company had a higher net margin of 9.5% and a higher current ratio of 4.21x, versus the industry median of 6% and 0.80x, respectively.

Recent Business Update

NXQ has recently appointed Duncan Faithfull as Group Chief Executive Officer, effective immediately. Previously, he served as the Gaming Business Leader and Chief Commercial Officer.

According to the company's trading update from July 24, 2024, group revenue has dropped significantly by 15% in the first half of 2024. This decline is due to ongoing weaker customer demand and widespread industry de-stocking. Quixant and Densitron, the Group's key brands, are also experiencing lower revenues, highlighting difficulties in certain regional markets and delays with new product launches.

Company Outlook

The board expects the de-stocking trend to persist into the second half of 2024, resulting in revenues aligning with those of the first half of the year. As a result, full-year revenues are projected to fall 15%-20% short of market expectations, with adjusted profit before tax anticipated to be 30%-40% below forecasts due to the expected lower revenues.

Top 10 Shareholders

The top 10 shareholders of NXQ collectively own approximately 69.00% of the company’s shares. Jarmany (Nicholas Charles Leopold) holds the largest stake at around 17.14%, followed by Liontrust Investment Partners LLP with approximately 13.13%, as shown in the chart below.

Stock information

The stock has experienced an approximately 18.03% increase over the past month but has declined by about 28.15% over the last six months. With a 52-week low of GBX 74.95 and a high of GBX 160.00, it is currently trading below the average of these 52-week values.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is 28 August 2024. The reference data in this report has been partly sourced from EODHD/Others.