Scisys Plc (LON:SSY), the specialist IT services and systems supplier, this morning delivered half year figures in line with market expectations, with year-on-year pre-tax profits rising to £0.6m from £0.1m and revenues up 3% to £20.9m. Chairman Mike Love welcomed the figures but warned that public sector spending cuts were beginning to have an impact on order flow and that the company was cautious on its trading outlook for the rest of the year. The news led the shares down by 5.6% to 46p in early trading.

SciSys works predominantly with blue chip companies, government and quasi-government clients in the Space, Government, Defence, Environment and Media/Broadcast sectors. The company began the first half of the year with a strong £35m order book and has since picked up a further £20m of contracts, including a £9m order for the BBC; a tier 1 position with CapGemini and BT in the winning consortium for an Environment Agency outsource contract; selection as the sole UK prime contractor under the European Space Agency GFC8 framework contract; and a framework agreement with the Irish Environmental Protection Agency.

The company insisted that while delays to public sector funded contracts were a concern, its Space, Media & Broadcast and Support divisions, which account for around 65% of total revenues, were less sensitive to any impact. In addition over 50% of revenues are derived from outside the UK which gives further resilience, it said.

Mike Love, the chairman of SciSys, said: “We are pleased to report that revenues and profits are in line at the half year point with our expectations. This followed the flow of positive contract wins achieved in the second half of 2009 which gave us an excellent opening position for 2010. However, we have started to see discretionary spending cuts by the UK Government and decisions on new contracts are starting to prove quite protracted. Consequently we continue to take a cautious view on our trading outlook for the remainder of this year and beyond. Our focus is on achieving further improvement in margins and building a healthy open order book position for 2011.”

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