Summary: UK-based Nasstar reported its results for the year ended December 31, 2017, with solid organic growth boosted by acquisitions.
Details: Group revenues were up 31% y/y at £24.5m, with organic growth of 9%. Recurring revenue was 88% of the total (2016: 88%). Adjusted EBITDA grew by 50% to £5.5m and included organic growth of 13%. The adjusted EBITDA margin rose from 20% to 23%, on track for the goal of 25% by the end of 2019. Net debt stood at £2.8m at the end of 2016 and a year later the company boasted £1m of net cash.
Data centre consolidation: Three of the company’s seven UK data centres are being closed as part of the ‘Nasstar 10-19’ programme, one in 2017 and two in 2018. Nasstar’s primary data centres will be its Datapoint House owned facility at its Telford HQ in northern England and with Equinix in Singapore. Its secondary data centre is a private suite in Level 3’s Goswell Road facility in London, and it also has dedicated suites with Interxion and VIRTUS in London.
Services: Nasstar has deepened its relationship with Microsoft and its cloud offering encompasses Azure public cloud, private cloud from Nasstar’s dedicated infrastructure and hybrid solutions. The company also provides a range of cloud hosted services, including Office 365, and is Shared Computer Activation (SCA) accredited, enabling it to integrate Office 365 with hybrid platforms including its hosted desktop solution. Nasstar has 15k hosted desktop users. The professional services team’s remit has been expanded to create a public cloud centre of excellence, and the team has also been developing its own application functions. The Cyber Defence as A Service offering, provided in partnership with Falanx Group, is showing good adoption rates. Nasstar targets seven verticals. Legal and recruitment account for 50% of group revenues; the others are financial services, property services, NFP/education, media and energy/logistics.
Angle: 2017 was the start of a three-year programme to re-brand and rationalise operations following three years of acquisitions designed to deliver a complete end-to-end managed service offering with vertical specialisations. The programme is already showing encouraging gains in revenue and EBITDA growth in a year of no acquisitions but some key new contracts. Key achievements in 2017 included eliminating net debt, a new organisational structure with one team for each function across the group managed by one leadership team, and moving out-of-hours UK support 24 to New Zealand to save costs.
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