Good morning!

The only RNS announcements which look reportable to me are SYS1 and Management Consulting (LON:MMC). But perhaps one or two others will crop up.




  • Share price: 637.5p (-23%)
  • No. of shares: 12.4 million
  • Market cap: £79 million

Trading Update

It's one of the worst days I've seen here in terms of share price value destruction, so bad luck to those holding it.

I've been watching this market research firm multi-bag over the last couple of years, and it has been a while since I thought it was good value (though I always considered it high-quality).

The problem is the lack of good earnings visibility: most money coming in the door has been to do with ad hoc projects. That implies forecasting results will be difficult, and  that should be compensated by a lower valuation (vs. companies which can get more of their customers signed up for long-term contracts).

As the CFO said in the final results statement in June:

..our business still remains predominantly Ad Hoc, with limited revenue visibility, and as always we need to acknowledge that we cannot predict with very much certainty how revenue growth will unfold over the coming financial year.  Trading during Q1 of our new financial year has been a little slower than we expected, but we remain confident of making further progress over the year as a whole.

Which brings us to today's update:

The slower than expected start to our financial year... has continued since then, and we now expect H1 Gross Profit (our main top line performance indicator) to be 6-11% lower than prior year.  This is mainly due to non-recurrence of large one-off Innovation projects as a result of some significant client spending deferrals and a more competitive market, although there have been some more encouraging signs recently.

The "more competitive market" is the most worrying element to this. I've been under the impression that System1 (AKA "Brainjuicer" in old money) has a completely fresh approach to Ad Testing/Brand Tracking, but this makes it sound like the competition is catching up perhaps.

In addition to lower gross profits in H1, costs are set to rise by 15% (or by 10% for the entire financial year), due to some new senior hires and some severance packages.

Updated guidance is…

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