REG - SysGroup PLC - Trading Update

SysGroupAnnouncement

30/04/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240430:nRSd4967Ma&default-theme=true

RNS Number : 4967M  SysGroup PLC  30 April 2024

30 April 2024

SysGroup plc

("SysGroup" or the "Group")

 

Year End Trading Update

"Total Transformation of Strategy, Execution and Leadership"

 

 

SysGroup plc (AIM:SYS), a leading technology partner specialising in the
delivery and management of cloud, data and security services to power
Artificial Intelligence ("AI") and Machine Learning ("ML") transformation, is
pleased to provide a trading update for the year ended 31 March 2024.

 

Group Trading Performance

 

Group revenues increased 5% to £22.7m (FY23: £21.6m), driven by a
significant 14% increase in the second half of the year (compared to the same
period FY23), which offset a 3% decline in the first half.  We continue to
maintain the momentum into the new financial year across all our technology
offerings.  At the end of April, we closed the second largest contract in
SysGroup's history, totalling £2.2m of revenue over three years, providing
cyber security managed services to a leading challenger bank.  Our AI/ML
proposition continues to gain traction amongst both new and existing
customers, with a growing pipeline of opportunities.

 

Following significant investment in technology and people to support our
strategic growth, the Group expects to report Adjusted EBITDA(1) of
approximately £2m.

 

The Group finished the year with a gross cash balance of £1.9m (FY23: £4.2m)
and a net debt(2) position of £3.4m (FY23: net debt(2) of £1.3m), excluding
contingent consideration of £1.8m (FY23: £2.7m).  Cash balances have been
utilised in satisfaction of: (i) £0.9m in the Truststream Year 1 earn-out and
(ii) £1.5m in settlement of the former CEO's contractual departure terms
including the Company's purchase of 2,076,394 ordinary SysGroup shares (now
held in treasury) following the exercise of share options and immediate sale
of those shares.

 

 

Heejae Chae, Executive Chair, commented:

 

"Our strategy, execution and leadership has been totally transformed over the
past nine months since I joined the Group.  We have set a strategic vision to
become the premier end-to-end data solution provider for small and medium
sized businesses ("SMB") embarking on their AI/ML journey.  We will provide
further details on our strategy and progress in the year-end results
announcement in July 2024.

In a short period of time, we have developed new capabilities in AI/ML, data
management and cloud which are crucial in today's data driven world.  Our
progress is recognised by our partners, evidenced by achieving AWS Select
Partner Status, approval for Zscaler Global MSSP Program, and working with one
of UK's largest Valued Added Reseller to be their Machine Learning Partner of
choice. Our customers, more importantly, are embracing our transformation and
new capabilities as demonstrated by the double-digit organic growth following
years of stagnation.

We believe that we are ideally positioned to participate in the most
consequential development in technology.  Evidence is becoming indisputable
that adoption of AI is no longer an option for businesses.  However, the
challenge for SMBs to embark on the AI/data journey is significant.  Our
vision is to be the partner of choice for the UK business in their
transformation."

 

Notes

1.     Adjusted EBITDA is earnings before interest, taxation,
depreciation, amortisation of intangible assets, exceptional items and share
based payments.

2.     Net debt represents cash balances less bank loans and lease
liabilities.

 

 

 For further information please contact:

 SysGroup plc                             Tel: 0333 101 9000

 Heejae Chae, Executive Chairman

 Owen Phillips, Chief Financial Officer

 Zeus (Nominated Adviser and Broker)      Tel: 0161 831 1512

 Jordan Warburton

 Nick Cowles

 Alex Campbell-Harris

 Nick Searle

About SysGroup

SysGroup plc is a managed service provider of end-to-end data solutions
enabling us to take our customers on their AI data journey. The Group offers
an integrated set of modern technologies that collectively meets our customers
end-to-end data needs including connectivity, cloud hosting, delivery,
analytics and governance of customer data, as well as a security layer for
users and applications.

 

The Group has offices in Bristol, Edinburgh, London, Manchester and
Newport.

 

For more information, visit http://www.sysgroup.com
(http://www.sysgroup.com/)

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTDGGDSDXDDGSC