Nexion flags $1.3M loss in first filing as a public company

Nexion flags $1.3M loss in first filing as a public company

The net loss for the six months ending 31 December 2020 represented a 341 per cent decline, year-on-year.

Paul Glass (NEXION Group managing director and CEO)

Paul Glass (NEXION Group managing director and CEO)

Credit: NEXION Group

Hybrid cloud services provider Nexion has posted a net loss of $1.29 million in its first half-year financial report since trading publicly on the Australian Securities Exchange (ASX) on 18 February.  

The net loss for the six months ending 31 December 2020 represented a 341 per cent decline compared to the corresponding period the year prior, during which the company posted a net loss of $292,000.

At the same time, the company’s revenue from customer contracts declined by roughly half, year-on-year, to $1.02 million.  

The company, which provides private cloud infrastructure coupled with public cloud products such as Amazon Web Services (AWS) and Microsoft Azure to create a hybrid cloud service called OneCloud, told its shareholders that the results were impacted by the COVID-19 pandemic up to 31 December 2020.  

“The group observed a general slow-down in capital expenditure on new IT projects being started by its existing and prospective customer base throughout 2020,” it said in a statement. “While recurring revenues for existing services remained strong, new project revenue was below-trend.”

Regardless, the company said its team continued to focus on building hybrid cloud solutions for its Australian client base, and looking for opportunities to expand both in Australia and overseas during the financial half-year.

On the bright side, the company's recurring revenue remained strong through the last half of calendar year 2020, growing 66 per cent year-on-year and 17 per cent across quarters.

But new project work to bring customers onto the OneCloud platform tapered off toward the middle of the year and a lull across the COVID-19 lockdown periods in Perth and then Adelaide and Melbourne led to limited new project work in the last half.

New projects resumed late in calendar year 2020, and came on-stream in February, including with IBM. On 25 February, the company revealed it had signed a five-year, multimillion-dollar deal with IBM Australia for the deployment of a range of the cloud service provider's products and services.

Nexion was admitted to the ASX on 16 February and began trading publicly using the ticker NNG on 18 February.  

The Perth-based company lodged a prospectus in November last year looking for a $22.3 million market capitalisation and offering 40 million shares at $0.20 each, which led to it successfully raising $8 million.

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