REG - SysGroup PLC - Half-year Report

SysGroupAnnouncement

23/11/2020 07:06

RNS Number : 0872G
  
SysGroup PLC
  
23 November 2020
  
 

23 November 2020
 
SysGroup plc
("SysGroup" or the "Company" or the "Group")
 
Half yearly results for the six months ended 30 September 2020
 
SysGroup plc (AIM:SYS), the multi award-winning managed IT services and cloud hosting provider, is pleased to announce its unaudited half year results for the six months ended 30 September 2020 ("H1 2021").
 
Financial highlights
·      Revenue of £9.01m (H1 2020: £9.26m)
·      Recurring Managed IT Services revenue represented 83% of total revenue (H1 2020: 80%)
·      Adjusted EBITDA1 increased 19% to £1.41m (H1 2020: £1.18m)
·      Adjusted profit before tax2 increased by 52% to £0.99m (H1 2020: £0.65m)
·      Statutory profit before tax of £0.13m (H1 2020: loss of £0.37m)
·      Adjusted basic EPS3 of 1.7p (H1 2020: 1.1p)
·      Basic profit per share of 0.2p (H1 2020: loss per share 0.9p)
·      Operational cashflows  increased 83% to £1.56m (H1 2020: £0.85m)
·      Cash of £3.02m at 30 September 2020 (30 September 2019: £2.65m)
·      Net cash4 at 30 September 2020 of £1.17m (30 September 2019: net debt of £(0.72)m)
 
Operational highlights
·      Resilient COVID-19 response with all team members continuing to work remotely
·      Certus and HNS integration completed on time
·      Project Fusion progressing according to plan to deliver a unified platform of systems across the Group
·      Closure of Bristol satellite office to reflect new homeworking practices
 
Adam Binks, Chief Executive Officer, commented: 
"I am pleased to be able to report on a period that has demonstrated the stability, agility and relevance of our business during a global crisis which has resulted in considerable uncertainty for many businesses. Our team has worked tirelessly to continue to provide a robust and uninterrupted service to our customers whilst adapting to new ways of working and, for that effort, I am extremely grateful. 
 
Whilst COVID-19 has had a marked impact on many sectors, it has created a huge opportunity for the IT services sector. The value of robust, flexible and secure IT has never been so important to businesses; outsourced managed services has been recognised as a key component of many businesses' success, growth and continuity. We look forward to capitalising on that trend in the years to come."
 
Notes
1.        Adjusted EBITDA is earnings before interest, taxation, depreciation, amortisation of intangible assets, exceptional items and share based payments.
2.        Adjusted profit before tax is profit before tax after adding back amortisation of intangible assets, exceptional items and share based payments.
3.        Adjusted basic EPS is profit after tax after adding back amortisation of intangible assets, exceptional items, share based payments and associated tax,divided by the number of shares in issue.
4.        Net cash represents cash balances less bank loans, lease liabilities and contingent consideration.
 



For further information please contact:
 
SysGroup Plc
Adam Binks, Chief Executive Officer
Martin Audcent, Chief Financial Officer


 
 
Tel: 0151 559 1777
 




 
Shore Capital (Nomad and Broker)
Corporate Finance: Edward Mansfield / Daniel Bush
Corporate Broking: Fiona Conroy
 


 
Tel: 020 7408 4090






Alma PR (Financial PR)
Josh Royston / Helena Bogle


Tel: 07780 901 979



 
 
About SysGroup
 
SysGroup is a leading provider of Managed IT Services, Cloud Hosting, and expert IT Consultancy. The Group delivers solutions that enable clients to understand and benefit from industry leading technologies and advanced hosting capabilities. SysGroup focuses on a customer's strategic and operational requirements - enabling clients to free up resources, grow their core business and avoid the distractions and complexity of delivering IT services.
 
The Group has offices in Liverpool, London, Newport and Telford.
 
For more information, visit http://www.sysgroupplc.com
 
 




 
Introduction
The Group delivered solid results in the first half of FY21 including a 19% increase in Adjusted EBITDA to £1.41m despite the challenging economic environment which continues to be clouded by the COVID-19 pandemic. Total revenue was largely flat YOY at £9.01m with lower Value Added Resale ("VAR") sales which was partially offset by a slight increase in recurring managed IT services revenue which represented 83% of the Group's total revenue (H1 2020: 80%). Our VAR sales, which contributed 17% of the total revenue, were impacted in Q1 due to customers cautiously withholding capex expenditure whilst they assessed the impact of COVID-19 to their own businesses. As decision makers become more confident with the economic landscape, we expect to see this figure recover in the second half of the year and early evidence of this is already being seen.
 
Following the acquisitions in 2019, the integration of Certus IT Limited ("Certus") and Hub Network Services Limited ("HNS") is now fully complete and the benefits to the Group are starting to be realised. In keeping with our business model of focussing on the UK mid-market, we have exited some lower margin customer contracts that came with these acquisitions. Whilst this has had a small impact on revenue the impact to the Group's profitability is minimal. 
 
As part of the integration, significant efforts have been made to complete the rebranding of the acquired businesses to reflect our operating model of a single go-to-market offering, known as "one SysGroup". I am pleased to report that Certus and HNS are now functioning under the SysGroup brand, with all systems fused onto a single platform providing greater visibility across the enlarged customer base. This has not only provided fast and accurate access to greater business intelligence across the entire Group, but the consolidated platform will enable future acquisitions to be integrated with relative ease going forward. 
 
We have continued to invest in people during the period including in new hires to support future growth and development. In addition, we have continued to invest in training for our sales and leadership teams to ensure they can continue to confidently engage with our customers. Training has been particularly important during the pandemic as staff continue to adapt to different ways of working. 
 
Combined with this we have been particularly pleased to have supported our staff throughout the pandemic and have had no need to make use of the furlough scheme or any of the government backed financial support mechanisms. We also took the decision early on in the pandemic to maintain our fully remote working model through to at least the new calendar year on the basis that a second lockdown would be likely after the summer. In doing so, we have been able to give our staff clarity and peace of mind, which has resulted in a stabilised workforce who have been able to concentrate on continuing to support our customers to the high standards to which they are accustomed.
 
Strategy
The Group's strategy remains consistent: to expand its position as a trusted provider of managed IT services to businesses in the UK mid-market. The Board believes that a business focused on the provision of managed IT services offers the highest growth opportunity and the potential for increased margins and longer-term contracts, thereby providing greater revenue visibility.
 
To deliver against this strategy, the Group has positioned itself as an extension of a customer's existing IT department, with an emphasis on consultative-led sales to guide customers through the complexities and developments in the managed IT services and cloud hosting marketplace. Our primary purpose is to remain abreast of developments in technology and advise our customers accordingly. This leading role is supplemented by exceptional customer service and support, resulting in strong client engagement and embedding SysGroup into their organisations. The Group continues to invest in R&D to ensure its clients are making use of the latest and best solutions available to them whilst maintaining its vendor agnostic approach.
 
The Company's route to execute this strategy is through a combination of organic and acquisitive growth whilst ensuring cross-selling opportunities are created throughout the acquired customer bases, providing a single go-to-market offering under the SysGroup brand. Whilst COVID-19 has temporarily impacted our ability to acquire quality businesses to add to our platform for the short term, we will continue to assess strategic acquisitions going forward which fit our strict criteria and believe there will be further opportunities in due course.
 
Results and trading
During the period, the Group delivered revenue of £9.01m (H1 2020: £9.26m), a decrease of 3%, and Adjusted EBITDA of £1.41m (H1 2020: £1.18m), an increase of 19%. 
 
Managed IT services revenue of £7.46m was slightly higher than H1 2020's £7.38m with the decline in Group revenue driven by lower VAR sales in the period.  VAR revenue in H1 2021 was £1.55m compared to £1.88m in H1 2020 and sales were affected in Q1 by customers withholding capex expenditure as an early precaution in response to the impact of COVID-19 on their businesses and markets. This has led to a shift in revenue mix to 83% managed IT services and 17% VAR revenue in the period (H1 2020: 80%:20%) which we see as a temporary position. We have seen VAR sales and orders begin to recover during the latter part of Q2 and cautiously anticipate this to continue into H2 2021 which would lead to a full year revenue mix more similar to FY20.
 
Gross profit was £5.38m with a gross margin of 59.7% (H1 2020: £5.47m and 59.1% respectively). The higher gross margin reflects the increase in revenue mix towards managed IT services in the period. Adjusted operating expenses of £3.97m were £0.32m below the same period last year (H1 2020: £4.29m) which is due to the benefit of acquisition synergies and the capitalisation of R&D costs for Project Fusion, discussed in the Operations section below. We have made no use of the government furlough scheme and whilst we have implemented a Group wide recruitment freeze, in certain areas of our business we have continued to make strategic hiring decisions to support continued future growth.
 
The Group has reported a statutory profit before tax of £0.13m which compares to a loss before tax of £(0.37)m in H1 2020. This movement is principally due to the increase in Adjusted EBITDA and lower level of exceptional costs in the period. 
 
Adjusted basic earnings per share for H1 2021 was 1.7 pence (H1 2020: 1.1 pence). Basic profit per share for H1
2021 was 0.2 pence (H1 2020: loss per share of 0.9 pence).
 
The Group has a strong net cash position of £1.17m post IFRS16 (H1 2020: net debt £(0.72)m), and £1.63m pre-IFRS16 (H1 2020: £0.14m). The Group's cash balance at 30 September 2020 was £3.02m (30 Sept 2019: £2.65m) reflecting good working capital control. During the period the Company paid the final earn-out consideration relating to the acquisition of Certus. The full earn-out profit target was achieved and £0.975m cash consideration was paid to the vendors of Certus. The Group has made no use of any of the government backed COVID-19 assistance schemes other than to defer the payment of Q1 VAT which amounts to £0.28m which will be paid in full prior to 31 March 2021. 
 
Working capital has been managed well with a net £0.31m cash inflow in the period (H1 2020: £0.04m) and a cash conversion rate of 115% (H1 2020: 96%). On a like for like basis, excluding the benefit of the VAT deferral, cash conversion remains strong at 95% (H1 2020: 96%).  This performance has been achieved despite providing financial support to a small number of customers during the period. 
 
Share Option Grants
In July this year, we announced the implementation of a new 2020 SysGroup Long Term Incentive Plan ("2020 LTIP"), together with an initial grant of 400,000 performance shares (the "Award") under the 2020 LTIP. The Remuneration Committee granted 250,000 performance shares to Adam Binks, Chief Executive Officer, and 150,000 performance shares to Martin Audcent, Chief Financial Officer (together the "Executive Directors"). The 2020 LTIP replaced in its entirety the incentive plan set up in June 2018 ("2018 LTIP") and the 1.6 million performance shares granted to the Executive Directors under the 2018 LTIP vested with immediate effect.
 
In addition to the grant of the 400,000 performance shares to the Executive Directors, 450,000 share options were granted in April 2020 to senior management under the existing 2018 SysGroup EMI Scheme.
 
Market Opportunity
Despite a subdued market environment, with many prospects hesitant to sign new contracts until they have increased visibility on their own operations, we believe the long term market opportunity for SysGroup remains buoyant, underpinned by the visible need for digital transformation. The accelerated shift towards flexible and remote working has forced many companies to rethink how they operate and adapt their working practices for both the short and long term. This has positioned SysGroup well for the future - now more so than ever, businesses are relying on proven technology to ensure the smooth running of their operations and are seeing the value of outsourced managed IT services. We therefore anticipate significant sales opportunities over the coming years as businesses realise the importance of enhanced IT processes within their operations. We are well placed to support our customers through this period of global change which will be further supported by our buy-and-build strategy.
 
Operations
During H1 we completed the integration of the Certus and HNS businesses and have already begun to see encouraging results. Following completion of phase one of Project Fusion, the unified platform of systems across the Group will enable more efficient working practices and higher quality operating and reporting information. Project Fusion has multiple workstreams for systems covering Customer Relationship Management, Service Desk, Financial Accounts, Marketing and Risk Management, and will greatly benefit the Group as it not only provides enhanced business intelligence but also makes the integration of future acquisitions simpler and easier.
 
Our customer engagement strategy which was launched in the prior year is designed to help us better identify customer motivations and preferences to ensure we maintain our excellent customer retention rates. Naturally, we have found it difficult to progress this to the fullest extent whilst customers and team members are working remotely, however, we have invested considerable time and resources in training our sales teams to enable them to strengthen customer relationships virtually. Whilst we have started to see initial progress, we see this as a long-term process, which will start to deliver tangible results in future periods.
 
Following the integration of the HNS business and owing to the success of our homeworking capability, we made the decision to close our Bristol office and transition the team members based from that location to become permanent homeworkers. We expect to see a small operational saving as a result of the closure.
 
Outlook
The first half of FY21, whilst clouded with some uncertainty, has demonstrated the resilience of our business model and the clear need for our offering. The integration of the acquired businesses has both streamlined and enhanced our services, providing a consolidated platform from which to operate and we believe this will greatly benefit the Group for the remainder of the year as well as future periods.
 
The swift invocation of our business continuity plan following the global outbreak of COVID-19 and the transition of all employees to homeworking, has proved to be successful, with our teams providing uninterrupted service and support to our customers throughout the period. The decision to keep all team members working from home has ensured consistency throughout whilst having minimal disruption on the day-to-day running of the Group. I would like to thank our entire team for their continued hard work and dedication through what has been a very challenging time for everybody.
 
Despite the economic uncertainty that is still apparent, with guidance now re-established in the market, the Board is confident that the Company will meet full year expectations.
 
Adam Binks
Chief Executive Officer
 




 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
SIX MONTHS ENDED 30 SEPTEMBER 2020
 











Unaudited six months to 


Unaudited six months to 


Audited year to












30-Sep-20


30-Sep-19


31-Mar-20








Notes


£'000


£'000


£'000


























Revenue 


2


9,007


9,260


19,492




Cost of sales






(3,629)


(3,788)


(8,291)


























Gross profit


2


5,378


5,472


11,201




Operating expenses before depreciation, amortisation, exceptional items and share based payments






(3,971)


(4,291)


(8,387)




Adjusted EBITDA






1,407


1,181


2,814




Depreciation






(369)


(427)


(847)




Amortisation of intangible assets






(671)


(636)


(1,321)




Exceptional items


4


(36)


(288)


(475)




Share based payments






(155)


(95)


(199)


























Administrative expenses






(5,202)


(5,737)


(11,229)


























Operating profit/(loss)






176


(265)


(28)




Finance costs






(51)


(103)


(206)




Profit/(loss) before taxation






125


(368)


(234)




Taxation






(30)


(59)


112




Total comprehensive profit/(loss) attributable to the equity holders of the company






95


(427)


(122)




Basic earnings per share (pence)


3


0.2p


(0.9p)


(0.2p)




Fully diluted earnings per share (pence)


3


0.2p


(0.9p)


(0.2p)



 
All the results arise from continuing operations.
 
 
 
 
 




 
CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2020
 











Unaudited


Unaudited


Audited












30-Sep-20


30-Sep-19


31-Mar-20








Notes


£'000


£'000


£'000




Assets




















Non-current assets




















Goodwill






15,554


15,578


15,554




Intangible assets






5,766


6,704


6,188




Plant, property and equipment






1,548


1,977


1,824












22,868


24,259


23,566




Current assets




















Trade and other receivables


6


2,492


2,283


2,726




Cash and cash equivalents






3,021


2,647


3,036












5,513


4,930


5,762




Total Assets






28,381


29,189


29,328


























Equity and Liabilities




















Equity attributable to the equity shareholders of the parent








Called up share capital






494


494


494




Share premium






9,080


9,080


9,080




Other reserve






2,483


2,226


2,328




Translation reserve






4


4


4




Retained earnings






8,258


7,856


8,163












20,319


19,660


20,069




Non-current liabilities




















Lease liabilities






296


540


441




Deferred taxation






1,082


1,288


1,200




Bank loan






951


1,284


1,146












2,329


3,112


2,787




Current liabilities




















Trade and other payables


7


3,892


3,575


3,488




Deferred income






1,238


1,297


1,465




Contingent consideration 






-


1,000


1,000




Lease liabilities






270


321


268




Bank loan






333


224


251












5,733


6,417


6,472




Total Equity and Liabilities






28,381


29,189


29,328



 
 
 
 
 




 
CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
SIX MONTHS ENDED 30 SEPTEMBER 2020
 







Attributable to equity holders of the parent









Share capital


Share premium


Other reserve


Translation reserve


Retained profit


Total












£'000


£'000


£'000


£'000


£'000


£'000





At 1 April 2019


494


9,080


2,129


4


8,370


20,077





Loss and total comprehensive expense for the period


-


-


-


-


(427)


(427)





Share-based payment charge


-


-


97


-


-


97





Adjustment on adoption of IFRS16


-


-


-


-


(87)


(87)





At 30 September 2019


494


9,080


2,226


4


7,856


19,660





Profit and total comprehensive income for the period


-


-


-


-


307


307





Share-based payment charge


-


-


102


-


-


102





At 31 March 2020


494


9,080


2,328


4


8,163


20,069





Profit and total comprehensive income for the period


-


-


-


-


95


95





Share-based payment charge


-


-


155


-


-


155





At 30 September 2020


494


9,080


2,483


4


8,258


20,319




 
 
The following describes the nature and purpose of each reserve within equity:
 



Reserve


Description and purpose










































Other reserve
 






Amount reserved for share-based payments to be released over the life of the instruments and the amount subscribed for share capital in excess of nominal value of acquisition of another company


































Retained earnings
 
Share premium
 






All accumulated profits and losses arising net of distributions to shareholders
 
Amounts subscribed for share capital in excess of the nominal value



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
CONSOLIDATED INTERIM STATEMENT OF CASHFLOWS
SIX MONTHS ENDED 30 SEPTEMBER 2020
 











Unaudited


Unaudited


Audited












 six months to


 six months to


Year to












30-Sep-20


30-Sep-19


31-Mar-20












£'000


£'000


£'000




Cashflows used in operating activities




















Net profit/(loss) after taxation






95


(427)


(122)




Adjustments for:




















Depreciation and amortisation






1,040


1,063


2,168




Finance costs






51


103


206




Share based payments






155


95


199




Taxation






30


59


(112)




Operating cashflows before movements in working capital


1,371


893


2,339




Decrease in trade and other receivables






223


942


501




Increase/(decrease) in trade and other payables 






83


(902)


(533)




Operating cashflows before interest and tax






1,677


933


2,307




Interest paid






(51)


(103)


(205)




Taxation (paid)/refunded






(69)


21


(172)




Operational cashflows






1,557


851


1,930




Cashflows from investing activities




















Payments to acquire property, plant & equipment


(95)


(180)


(353)




Payments to acquire intangible assets






(246)


-


(190)




Acquisition of subsidiary companies






(975)


(1,911)


(1,911)




Amounts received in respect of previous acquisitions






-


252


252




Cash acquired with acquisitions






-


609


609




Net cash used in investing activities






(1,316)


(1,230)


(1,593)




Cashflows from financing activities




















Repayment of loan facility including fees


(112)


(113)


(224)




Capital repayment of lease liabilities






(144)


(237)


(453)




Net cash from financing activities






(256)


(350)


(677)


























Net decrease in cash and cash equivalents 


(15)


(729)


(340)




Cash and cash equivalents at the beginning of the period 


3,036


3,376


3,376




Cash and cash equivalents at the end of the period


3,021


2,647


3,036



 
 




 
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
SIX MONTHS ENDED 30 SEPTEMBER 2019
 
1.    ACCOUNTING POLICIES
The accounting policies used in the preparation of the unaudited consolidated interim financial information for the six months ended 30 September 2020 are in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRS") as adopted by the European Union and are consistent with those that will be adopted in the annual statutory financial statements for the year ended 31 March 2021.
 
While the financial information included has been prepared in accordance with the recognition and measurement criteria of IFRS, as adopted by the European Union, these financial statements do not contain sufficient information to comply with IFRSs. 
 
The accounting policies adopted in the interim financial statements are consistent with those adopted in the financial statements for the year ended 31 March 2020.
 
Exceptional items
The Group presents as exceptional items on the face of the Statement of Comprehensive Income those material items of income and expense which the Directors consider, because of their size or nature and expected non-recurrence, merit separate presentation to facilitate financial comparison with prior periods and to assess trends in financial performance. Exceptional items are included in Administration expenses in the Consolidated Statement of Comprehensive Income but excluded from Adjusted EBITDA as management believe they should be considered separately to gain an understanding of the underlying profitability of the trading businesses.
 
Going concern
The Directors have prepared the financial statements on a going concern basis which assumes that the Group and the Company will continue to meet liabilities as they fall due. 
 
The Board recognises that whilst the Group is trading in an uncertain economy following the onset of the COVID-19 pandemic, the Group has demonstrated in its H1 results both operational and financial resilience. The Group has an operating model with circa 75% of revenue deriving from contracted managed IT services which is a continuous service supply to customers and this has been largely uninterrupted by the impact of COVID-19. Cash conversion remains strong and the Group has a resilient financial position with a cash balance of £3.02m and a net cash position of £1.17m at 30 September 2020. 
 
The Directors performed stress tests on the Group's financial forecasts during the period which allowed the Board to assess a significant downside scenario. The projected trading forecasts and resultant cashflows, together with the confirmed loan facilities and other sources of finance, taking account of reasonably possible changes in trading performance, show that the Group can continue to operate within the current facilities available to it. 
 
The Directors therefore have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and they continue to adopt the going concern basis of accounting in preparing the financial statements.
 
2.    SEGMENTAL REPORTING
The chief operating decision maker for the Group is the Board of Directors and the Group reports in two segments:
 
·      Managed IT Services - this segment provides all forms of managed services to customers and includes professional services. 
·      Value Added Resale (VAR) - this segment provides all forms of product and licence sales procured from supplier partners.
The monthly management accounts reported to the Board of Directors are reviewed at a consolidated level with the operating segments representative of the business model for growth of recurring contract income in Managed IT Services and VAR sales as a complementary business activity. The Board review the results of the operating segments at a revenue and gross profit level since the Group's management and operational structure supports these operational segments as unified Group functions. 
 
All segments are continuing operations and there are no transactions between segments.
 











Unaudited six months to


Unaudited six months to


Audited 
year to












30-Sep-20


30-Sep-19


31-Mar-20












£'000


£'000


£'000




Revenue




















Managed IT Services






7,462


7,382


15,092




Value Added Resale






1,545


1,878


4,400












9,007


9,260


19,492




Gross Profit




















Managed IT Services






5,049


5,073


10,281




Value Added Resale






329


399


920












5,378


5,472


11,201



 
 
3.    EARNINGS PER SHARE







Unaudited six months to


Unaudited six months to


        Audited              year to








30-Sep-20


30-Sep-19


31-Mar-20








£'000


£'000


£'000




Profit/(loss) for the financial year attributable to shareholders


95


(427)


(122)




Adjusted profit for the financial period


823


562


1,657




Weighted number of equity shares in issue


51,584,007


49,419,690


51,374,950




Adjusted basic earnings per share (pence)


1.7p


1.1p


3.4p




Basic earnings per share (pence)


0.2p


(0.9p)


(0.2p)




Diluted earnings per share (pence)


0.2p


(0.9p)


(0.2p)




















 




















 








Unaudited six months to


Unaudited six months to


        Audited              year to








30-Sep-20


30-Sep-19


31-Mar-20








£'000


£'000


£'000




Profit/(loss) after tax used for basic earnings per share


95


(427)


(122)




Amortisation of intangible assets


671


636


1,321




Exceptional items


36


288


475




Share based payments


155


95


199




Tax adjustments


(134)


(30)


(216)




Adjusted profit used for adjusted earnings per share


823


562


1,657












 




 
 
4.    EXCEPTIONAL ITEMS







Unaudited six months to


Unaudited six months to


Audited 
year to








30-Sep-20


 30-Sep-19


31-Mar-20








£'000


£'000


£'000




Integration and restructuring 


61


204


390




Acquisitions


(25)


84


85








36


288


475



 
Integration and restructuring costs relate to the exit of the Bristol office and costs incurred for integrating the Certus business operations. The credit of £25,000 for acquisitions is the difference between the £1m contingent consideration accrued at 30 March 2020 for the Certus earn-out payment and the sum actually paid to the Sellers in H1 of £975,000.
 
 
5.    ALTERNATIVE PERFORMANCE MEASURES



Reconciliation of operating profit to Adjusted EBITDA


Unaudited six months to


Unaudited six months to


         Audited              year to








30-Sep-20


30-Sep-19


31-Mar-20








£'000


£'000


£'000




Operating profit/(loss)


176


(265)


(28)




Depreciation


369


427


847




Amortisation of intangible assets


671


636


1,321




EBITDA


1,216


798


2,140




Exceptional items


36


288


475




Share based payments


155


95


199




Adjusted EBITDA


1,407


1,181


2,814






















Reconciliation of profit before tax to Adjusted Profit before Tax


Unaudited six months to


Unaudited six months to


         Audited              year to








30-Sep-20


30-Sep-19


31-Mar-20








£'000


£'000


£'000




Profit/(loss) before tax


125


(368)


(234)




Amortisation of intangible assets


671


636


1,321




Exceptional items


36


288


475




Share based payments


155


95


199




Adjusted Profit Before Tax


987


651


1,761






















Cash conversion


Unaudited six months to


Unaudited six months to


         Audited              year to








30-Sep-20


30-Sep-19


31-Mar-20








£'000


£'000


£'000




Operational cashflows


1,557


851


1,930




Adjustments:
















Acquisitions, integration and restructuring cashflows


61


288


492




Cash generated from operations


1,618


1,139


2,422




Adjusted EBITDA


1,407


1,181


2,814




Cash conversion


115%


96%


86%




















 




Net Cash/(debt)


Unaudited six months to


Unaudited six months to


         Audited              year to








30-Sep-20


30-Sep-19


31-Mar-20








£'000


£'000


£'000




Cash balances 


3,021


2,647


3,036




Bank loans - current


(333)


(224)


(251)




Bank loans - non-current


(951)


(1,284)


(1,146)




Lease liabilities


(566)


(861)


(708)




Contingent consideration


-


(1,000)


(1,000)




Net Cash/(debt)


1,171


(722)


(69)













 
 
 
 
6.    TRADE AND OTHER RECEIVABLES











Unaudited six months to


Unaudited six months to


         Audited              year to












30-Sep-20


30-Sep-19


31-Mar-20












£'000


£'000


£'000




Trade debtors






1,469


1,166


1,427




Prepayments and accrued income






1,023


1,117


1,299












2,492


2,283


2,726











 
 
7.    TRADE AND OTHER PAYABLES











Unaudited six months to


Unaudited six months to


         Audited              year to












30-Sep-20


30-Sep-19


31-Mar-20












£'000


£'000


£'000




Trade payables






1,648


1,622


1,847




Corporation tax






237


451


158




Other taxes and social security






992


626


552




Accruals






1,015


876


931












3,892


3,575


3,488











 
 
8.    ACQUISITIONS
 
In February 2019, the Company acquired 100% of the share capital of Certus IT Limited ("Certus"), and the parties agreed an earn-out mechanism for a period of twelve months post-acquisition based on profit performance targets. In February 2020 the earn-out period was completed and Certus successfully achieved the maximum EBITDA target. The company paid £975,000 to the Sellers in full settlement of the contingent consideration during H1 FY21.
 
 
9.    AVAILABILITY OF INTERIM REPORT
Copies of this report are available on the Company's website at http://www.sysgroupplc.com
 

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  END
 
 
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