i-Nexus Global shares jump 67% on contract success and reduced costs

Provider of cloud-based strategy execution software i-Nexus Global (AIM:INX) saw its shares rally by more than 67% during morning trading, as management lauded the company’s success in fulfilling what were described as three major strategic goals.

First, the company had a focus on lowering costs. It said that it had successfully done this by reducing its monthly operating cost base, from over £850,000 to £360,000,which means that it now runs at a monthly break-even. Similarly, it added that it had trade debtors of £800,000 and a cash balance of around £190,000 at the end of July.

Second, it boasted new product launches and contract wins. The former was fulfilled by its Summer 2020 product release going live last week, following what i-Nexus described in its statement as “intensive design and development and a collaborative programme of customer trials and workshops”. The latter was fulfilled by the company securing a new customer on a multi-year contract, in addition to a ‘substantial’ services order in advance of an existing customer’s global roll out plan.

Third and finally, the company boasted that it had successfully re-energised its sales pipeline. It said that it had successfully rebuilt its sales opportunities to pre-pandemic levels, and its pipeline now includes live opportunities with an annual recurring revenue value of £1.8 million.

i-Nexus Global cash outlook

Speaking on the company’s strategy and its financial position in the coming months, the Group’s statement read:

At the time of the Interim results update, the Company announced that the Board had resolved to review strategic options to introduce fresh capital to the business, in light of the difficult and uncertain trading environment caused by COVID-19. The Company has agreed with HMRC a deferral and repayment plan in respect of PAYE and National Insurance payments amounting to approximately £430K but has otherwise thus far been unable to secure access to additional funding.”

“Based on the Company’s latest cash flow projections, the Directors anticipate that the Company is likely to experience a modest cash shortfall by the end of the calendar year, but should return to a positive cash balance from February 2021 onwards, in line with i-Nexus’ regular seasonal cashflow profile. As a result, the Board is, as a key priority, scaling up its efforts to source new financing facilities with immediate effect.”

Investor notes

Following the update, the i-Nexus Global share price rally somewhat calmed down, still up 44.78% or 1.50p, to 4.85p per share 08/09/20 13:00 GMT. While this level is ahead of its year-to-date nadir of 3.25p seen in May, it is far behind where it started the year, with the price of 16.50p per share through January.

The company’s p/e ratio is currently -0.26.

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Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.