IT managed services group Nexus Management (LON:NXS) this morning warned that revenues and pre-tax profits for the year to September 30 were set to fall short of expectations after one of its subsidiaries failed to net a major contract. Resilience Technology, the network security business that was acquired by Nexus in July 2009, had been anticipating the completion of major multi year order from a blue chip UK company by the end of September but the deal has failed to materialise in time. Negotiations are understood to be continuing with the potential customer and Nexus said it would make a further announcement once the order was signed. A pre-close trading update is expected from nexus in November 2010 and its results for the year will be published in January 2011.

Today’s news follows a rocky year for Nexus, which has been compounded by the protracted effects of the economic downturn in the US and Europe. Last year, the group was forced to make costly write-downs on its investment in US financial services group PD Financial – a long term marketing deal that originally saw PD offer consumer loans to buy Nexus’ services in the States. Last month the group sold off most of its interests in American IT services franchise, Nerd Force, after the business failed to turn a profit after two years under Nexus control.

Roger Richardson, the chief executive of Nexus Management, said: “The delay in the signing of the Resilience order is regrettable as the order would have had a significant impact on our bottom line and enhanced the visibility of the future earnings of the Resilience business. Despite this disappointment the company's performance in the second half of the year was markedly better than the first half, which should give us a positive start to the new financial year. The disposal of Nerd Force in July, which was loss making in the ten month period before its disposal, will have a positive impact on the company's financial performance in the current year. I am encouraged by the progress the group has made in the last year against very difficult economic conditions in our core markets but conditions remain challenging.”

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