REG - System1 Group PLC - Final Results
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RNS Number : 2592Q System1 Group PLC 09 July 2025
9 July 2025
System1 Group PLC (AIM: SYS1)
("System1", or "the Company", or "the Group")
Financial results to 31 March 2025
System1 Group the marketing decision-making platform www.system1group.com
(http://www.system1group.com) announces its results for the twelve months
ended 31 March 2025 ("FY25").
Highlights
2025 2024 Change*
("FY25")
("FY24")
Results for the year £m £m %
Platform Revenue ("Predict & Improve" **) 34.5 24.8 39%
Other Revenue (Bespoke consultancy) 2.9 5.2 -45%
Total Revenue 37.4 30.0 25%
Gross profit 32.9 26.1 26%
Operating costs (28.0) (23.4) 19%
Other operating income 0.4 0.4 -8%
Finance income - - nm
Profit before tax 5.3 3.1 71%
Tax charge (0.8) (1.1) -23%
Profit for the financial year 4.5 2.0 120%
All figures in the Highlights are presented in millions rounded to one decimal
place unless specified otherwise. Percentage movements are calculated based on
the numbers reported in the financial statements and accompanying notes.
* Year-on-year percentage change figures are based on unrounded numbers.
** Data and data-led consultancy
Key performance indicators
2025 2024 Change
("FY25")
("FY24")
Platform revenue growth 39% 43% -4%
Number of clients 563 428 31%
Gross profit % Revenue 88% 87% 1%
Adjusted profit before tax (1) 5.2 3.1 68%
Adjusted EBITDA £m (2) 6.6 4.4 52%
Adjusted EBITDA % Revenue 18% 15% 3 points
Rule of 40 (3) 57% 57% 0%
Free Cash Flow (FCF) £m (4) 4.2 4.0 0.2
Net Cash £m 12.9 9.6 3.3
Diluted earnings per share** 35.2p 16.0p 120%
Ordinary Dividend per share 5.5p 5.0p 10%
Special dividend per share 5.5p - nm
(1. ) Profit before tax plus share-based payment expenses
(2. ) Profit before tax + share-based payments (inc. associated
social security provision) + interest, depreciation and amortisation
(3. ) Platform Revenue growth %+ Adjusted Group EBITDA % Group
Revenue
(4. ) Cash flow after interest and before debt
raising/reduction, buybacks/dividends
« Total Revenue of £37.4m, up by 25% YoY
« Platform Revenue up by 39% YoY
« Over 300 new Platform clients in FY25 produced £8.1m new Platform Revenue
« Platform Net Revenue Retention 106%
« US Revenue up by 49% YoY; UK up by 28% YoY
« Ad testing Revenue up by 38% YoY
« Gross profit margin 88% (FY24: 87%)
« Adjusted EBITDA £6.6m at 18% margin
« Adjusted PBT £5.2m (FY24: £3.1m, + £68% YoY), PBT £5.3m (FY24: £3.1m,
+71% YoY)
« Free cash flow £4.2m. Year-end cash £12.9m
« Earnings up by 120% from 2.0m to £4.5m
« Diluted earnings per share up 120% to 35.2p
« Proposed ordinary dividend of 5.5p per share; additional proposed special
dividend of 5.5p per share in recognition of outstanding year-on-year earnings
growth and cashflow generation.
Further information on the Company can be found at www.system1group.com
(https://system1group.sharepoint.com/sites/Finance/Shared%20Documents/Finance/201%20Statutory%20accounts/System1%20Group%20PLC/2024/Full%20year%202024/RNS%20Release/www.system1group.com)
.
This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication
of this announcement, this information is now considered to be in the public
domain.
For further information, please contact:
System1 Group PLC
Tel: +44 (0)20 7043 1000
James Gregory, CEO
Chris Willford, Chief Financial Officer
Canaccord Genuity Limited
Tel: +44 (0)20 7523 8000
Simon Bridges / Andrew Potts / Harry Rees
Group Overview - System1 on a page
Who we are and why we exist
System1 is a marketing decision-making platform business. Since 2000, System1
has helped marketers tap into consumers' emotions to predict and improve the
commercial impact of ads and ideas. Our methodology is rooted in the
groundbreaking behavioural science and emotion-based research of psychologists
Daniel Kahneman and Paul Ekman. Our target customers are the world's largest
brands. These businesses understand that creativity is the most powerful tool
for growth within their control. System1 helps them make confident creative
decisions that lead to transformational business results.
What we do
System1 predicts and improves marketing effectiveness. Our advertising and
idea tests measure emotion to give our customers the most accurate predictions
of the business impact of creativity. We 'predict' (provide research results)
and work with our customers and 'improve' (provide insight and consultancy on
those results) advertising effectiveness, innovation effectiveness and brand
effectiveness. Our unique selling point is predictiveness, translating emotion
into business results.
Our products
We deliver automated fast-turnaround Data and Data-led Consultancy products
for ad testing, innovation testing and brand effectiveness tracking. We can
supplement the platform proposition with bespoke consultancy where this is
required by our customers. Our largest customers buy both Data and
Consultancy.
Where we operate
We run tests in 81 markets globally
Office locations include London, New York, Miami, Los Angeles, Chicago,
Boston, Sao Paulo, Paris, Hamburg, Rotterdam, Lausanne, Singapore, and Sydney.
How we operate
We are guided by our growth model "flywheel". We meet our customers' needs
with leading propositions delivered efficiently via the platform. We build
awareness of our propositions through fame-building partnerships which bring
customer interest that we seek to convert and scale up. Growth in our scalable
model produces improved margins which we then seek to reinvest in our people,
our shareholders, and back into the business growth flywheel. The growth model
is underpinned by a robust support structure and performance culture.
Chairman's Statement
I am delighted to report a second successive year of strong growth in revenue,
profit and cash generation. Revenue rose by 25% to £37.4m, profit before
tax by 71% to £5.3m, and the business generated £4.2m free cashflow.
Earnings for the year were up 120% to £4.5 m, equivalent to 35.3 pence per
share.
The CEO's Statement comprehensively reviews progress towards our strategic
priorities. Highlights in the past year include
· Total revenue up by 25% year-on-year
· Profit after taxation up by 120% year-on-year
· Over 300 new platform clients in FY2025
· System1 worked with 5 of the top 10 advertisers in the US and 8
out of 10 in the UK
· Significant progress in the USA, with Revenue increasing by 49%
year-on-year
· Investment increased by £2m for FY26 in order to accelerate
profitable growth and revitalise our Innovation proposition
· Winners of Best Governance Award at the 2024 AIM Awards
I stated in last year's annual report that retention and reward of our key
people is a mission-critical priority. Having put in place short-term
incentive plans for the executive leadership team in FY24, in May 2025,
following consultation with some larger shareholders, we followed up with a
new long-term incentive plan, details of which can be found in the
remuneration report.
Your board was pleased to resume paying dividends in 2024 and will be
proposing an increased ordinary dividend of 5.5p per share, up 10% on FY2024,
together with a special dividend of 5.5p per share at the forthcoming AGM. The
special dividend recognises the exceptionally high growth in after tax profits
last year and a second successive year of strong cash generation. These
proposed dividends reflect the board's confidence in the prospects and the
leadership of the business.
On behalf of the Board I would like to recognise the immense effort that over
180 colleagues in the business make every day to meet and exceed the needs of
our customers and reach the level of performance we achieved in FY25 and I'm
confident that this momentum will continue in FY26.
Last but not least, I'd like to pay tribute to System1's Founder John Kearon
whose vision and inventiveness gave life to this business 25 years ago. John's
application of behavioural science to predictive market research, particularly
understanding the importance of emotion, has changed the industry forever.
From September, John will assume a non-executive role in the business and will
also continue to provide strategic guidance, challenge and oversight to the
management team, as Head of a new Board strategic and product advisory
committee, QualCo, with the aim of keeping System1 at the forefront of thought
leadership and creative effectiveness.
Rupert Howell
Chairman
Founder's Statement - 25 Years of Mischief, Marketing & Methodology: A Retrospective
In January 2000, with nothing but a dodgy laptop, a mad glint in the eye, and
an allergic reaction to traditional market research, BrainJuicer was born. We
weren't just another agency-we were the inconvenient upstart. The uninvited
guest at the research party who refused to wear a tie and instead asked the
awkward (and sometimes brilliant) questions.
From the get-go, BrainJuicer wasn't about validating hunches or ticking
boxes-we were about unsettling the status quo. We believed market research
should inspire creative marketing, not neuter it. It should encourage brave
ideas, not bland conformity. And above all, focus on measuring emotion. Why?
Because as we've proved…, the more people feel, the more people buy…,
vote…, give…, and act. By contrast, the conventional, seemingly sensible,
rational research metrics are frequently poor at predicting consumer behaviour
and by extension, the commercial potential of an ad or innovation.
The Big Juicy Bang
Back in those early days, we pioneered predictive methodologies using the
then-barely understood world of behavioural science - all designed to maximise
the speed and cost advantages of online research. At the time traditional
agencies were still conducting face-to-face research, we built FaceTrace®,
MindReader®, Predictive Markets - tools that felt more like mischief than
metrics and yet proved unnervingly effective.
By 2006, we floated on AIM as BrainJuicer PLC. A bit of a mouthful on the
London Stock Exchange roster, perhaps, but we liked it that way. It was
irreverent, provocative-and unmistakably us. We opened offices in New York,
Amsterdam, Shanghai, Paris, Delhi, Hamburg, São Paulo (hello Brazil!), Vevey,
Singapore, Sydney, fuelled not by spreadsheets but by emotion, energy, and
enough commercial savvy to keep the lights on.
By 2010, we were winning accolades like "Most Innovative Agency" from the GRIT
report, "Agency of the Year" from Marketing Magazine, and a curious number of
new friends (and enemies) in the research world. Our growth was organic,
persistent and global. Proof the world was ready to move on from dusty focus
groups and warmed-over quant.
The System1 Revolution
2016 marked a turning point. With Daniel Kahneman's "Thinking, Fast and Slow"
now a business bible, we rebranded to System1 Group PLC. Why? Because we were
already living it. Kahneman's insights had been stitched into our DNA from day
one. We embraced System 1 (fast, intuitive, emotional decision-making) over
the cold comforts of System 2 logic.
We weren't just running research anymore-we were predicting advertising
effectiveness, brand growth, and innovation success. Fast. Accurately. At
scale. Test Your Ad, Test Your Brand, Test Your Idea: simple, elegant,
systemised. And behind it all, the biggest advertising prediction database in
the world, testing almost every US & UK ad, as well as thousands of ads
across the world.
It wasn't just smart research anymore-it was a decision-making platform,
complemented by our value-enhancing creative guidance. Or as we liked to call
it: a BS-free zone for marketers who actually wanted their brand(s) to grow
and were prepared to break with convention to achieve it with System1's help.
From Chief Juicer to Cheerleader-in-Chief
After 22 years as CEO, I handed over the reins to James Gregory, who continues
to do a brilliant job steering System1 into its next phase of growth. He
brings the leadership, operational rigour and vision needed to turn our IP
into a billion-pound business. And me? I spent the first year growing our US
business, and the last two as Head of System1 Futures, happily scheming in the
background-writing, inventing, and helping the next generation of Juicers turn
emotion into accurate predictions and creativity into profit. From September,
I will become a Non-Executive Director, and Head of a new Board strategic and
product advisory committee, QualCo.
We've never stopped investing in ideas. We launched FeelMore50, Uncensored
CMO, published books like Lemon and Look Out, partnered with the IPA, ITV,
LinkedIn, TikTok, Pinterest, JCDecaux, Radio Centre, and many of the world's
largest advertisers, ad agencies, and media companies-and stayed true to our
belief: feel more, buy more. It's not a tagline. It's the truth.
25 Years, Zero Compromise
We've stayed independent. We've stayed unique. We've kept our soul. Yes, we've
had tough years (2012, 2018, pandemic-era crunch). But we came through by
doubling down on invention and resilience. With no small thanks to the
incredible support of our long-term, super-smart investors, wise Chairmen,
committed Board members and collaborators.
Our people-brilliant, opinionated, often maddening-not only make System1 a
joyful place to work but continue to be front and centre in raising the
predictiveness, influence, effectiveness, desirability and growth of modern
Market Research. It's been a one hell of a collective effort over 25 years
involving hundreds of talented colleagues-most of whom, but admittedly not
all, still talk to me. Whether they do or don't, I send them my thanks and
gratitude for helping System1 get to 25 in such good shape, much admired
thought-leader, essential client partner, and a Company to be reckoned with.
Over the years we've been lucky to work with incredibly talented, creative
collaborators like, Dr. Paul Marsden, Orlando Wood, Jon Evans, Andrew Tindall,
Les Binet, Peter Field, Mark Ritson, Mark Earls, Rod Connors, Colin Jenkinson,
Will Headley, Bruce Bickerton, Nina Holland, Shravan Sampath Kumar, Tom Ewing,
James McKinven, Kevin Chesters, Noah Brier, Mark Beard, Ari Popper, Susan
& Gary Griffin, Mike Carey and many more.
We've worked with so many of the world's top advertisers and agencies, helping
them shape and bring to market some of the most emotionally resonant ads of
the last decade. We've stood for behavioural science before it was cool-stuck
with it when it was inconvenient-and are determined to continue being the
industry champion of famously enjoyable and profitable creative marketing.
The Road Ahead
As of July 2025, we're a tech-powered prediction company with a creative soul.
We've built a platform that can tell you-by tomorrow morning-whether your ad
or innovation will build brand fame, make people feel something, and drive
profitable growth.
Not bad for a gang of misfits who started out trying to "squeeze people's
brains until they confess something fascinating."
So, here's to 25 years of method in the madness. To every client who believed,
every Juicer who dared, every investor who risked, every mistake we learned
from, and every joyous moment we had along the way.
System1 was never meant to be a traditional company.
And thank goodness for that.
John Kearon
Founder
9 July 2025
CEO's Statement
ACCELERATING MOMENTUM
FY25 picked up where the excellent FY24 left off as we accelerated momentum
and started to double down on our strategic goals and tap into the massive
opportunity facing us. In FY25, System1 delivered £37.4m of Revenue, up 25%
year on year, with 39% growth in Platform Revenue (our strategic platform and
products) and a significant shift for Platform Revenue to reach 92% of Total
Revenue. We continue to grow profitability, with Profit before Taxation up by
71% on the previous year.
The business has kept the customer at the heart of all we do, while balancing
focus on growth with curiosity on future invention. We have grown System1
fame, winning over 300 new clients with significant acceleration of progress
in the US (US Revenue growth +49% year on year) alongside our core growth
engine of the UK (+28% year on year). We have a clear model for growth with
Platform Net Revenue Retention of 106% achieved in FY25 alongside £8.2m of
new business revenues.
We have made significant progress against the growth model we set out last
year - our flywheel. We have enhanced the Test Your Ad platform and product
suite, with new offers such as Test Your Ad Social to be launched in FY26, in
partnership with TikTok, keeping System1 at the forefront of the ad testing
market.
Alongside the flywheel we have truly focused on our three strategic goals:
'Winning in America', 'Revitalising our Innovation Offer' and 'Winning and
Scaling the World's Largest Brands'. We have increased focus, resource and
budget in the US and are seeing the results come through in what is by far the
largest target addressable market for both market research and marketing
spend. We have revitalised our Innovation offer, where we have launched a new
Test Your Innovation platform and product suite, supported by a dedicated
go-to-market team and fame programme. We are winning with our target customer
group - the World's Largest Brands, who have the capacity (and budget) to
spend on our offerings and the capability to take on board on the learnings
provided by our predictions and improvements to ensure they deliver world
class creativity and effectiveness in their marketing.
In what is System1's 25th anniversary year, we strongly believe that with our
long experience in advertising and innovation, and a methodology rooted in
behavioural science, we are well placed to achieve our long-term goals by
enabling the world's largest brands to create with confidence. To this end, we
have accelerated investment to deliver growth, focusing on our people, the US
market, and our customer offering.
I'd like to take the opportunity to thank our staff who continue to amaze me
each and every day with their passion, curiosity and drive, the Board whose
strategic guidance and counsel is invaluable and the Executive team who
continue to drive the business while creating the right performance-based
culture for long-term growth. And most significantly, thank you to John Kearon
for his continued counsel, invention and challenge - it takes an incredible
amount of dedication to found and create a business like System1 and keep it
at the forefront of thought leadership for 25 years. I look forward to
continuing to work with John in his new Non-Executive role to drive forward
our strategy, product and fame.
Progress towards our strategic goals & The Flywheel
FY25 was a real year of focus for the business, rallying around key strategic
goals. With Executive sponsorship and clear alignment across the business, we
have been able to make significant progress against each of these three goals,
albeit we are just scratching the surface of these opportunities.
1. Winning in America
By far the largest market with 54% of total market research spend (ESOMAR),
the USA is a significant opportunity for System1. We have made clear our
intentions to grow in this market and supported this with dedicated focus and
investment. On top of the new roles created in March 24, with Mike Perlman
(Global Chief Commercial Officer) based in the US and recruiting Alex Banks
(SVP Commercial Americas), we have shifted several important marketing and
partnership roles into the US, in particular recruiting Vanessa Chin, an
ex-customer at Aldi US to become our Global Head of Marketing.
The results are clear to see - sales up by 49% to £12.8m with the US
promising the overtake the UK as our biggest revenue market. Our fame has
increased significantly through a new partnership with Effies Worldwide
looking to replicate our work with the Institute of Practitioners of
Advertising in the UK. There has been a big focus on creating a winning
culture with a team where our headcount has increased by 70% in the USA and we
have seen record levels of staff satisfaction as the team ramp up for success.
2. Revitalising our Innovation Offer
Creating dedicated focus on Innovation was a game changer as we allowed the
core of the business to keep focused on the success of our Communications
offer. Tristan Findlay joined the business as MD Innovation and has built out
a team of dedicated Innovation roles, across Sales, Marketing, Product and
Consultancy. Alongside the relaunch of our Test Your Innovation platform and
product suite, we are starting to see green shoots of success and a strong
start of growth in our Innovation offer in early FY26.
3. Winning and Scaling the World's Largest Brands
In FY25, we saw the results of putting the customer at the heart of what you
do and building a commercial machine around this. Our Platform Net Revenue
Retention of 106% is the best since launching the platform in 2020, and our
new business engine continued with over £8.1m of revenues from 300 new client
wins for the year.
We have partnered with the world's largest brands to create truly effective
marketing. While some customers request anonymity - not wanting to share the
secret sauce - the case study below helps encapsulate our work with Very.
Very Unlocks the Compounding Effects of Consistency and the Value of a
Data-Driven Strategy
Opportunity
Following a number of years of varying creative approaches Very aimed to
refresh its brand platform to align with its new strategy and vision, hoping
to create a consistent platform which would stand out in a sea of sameness
within the category. Their goal was to bring the "There's good, and there's
Very good" strategy to life, infusing the brand with vibrancy, character, and
variety to reflect the culture of the brands' homeland of Liverpool and their
unique customers' zest for life. A creative platform titled "Let's make it
sparkle" brought this strategy to life. Given the scale of this
transformation, Very used data-driven decision-making to give full confidence
that the new creative platform would not only engage their key customers but
also attract a new consumer base.
Solution
In partnership with System1 and their creative agency, The Gate London, Very
built a brand strategy rooted in effectiveness. At the heart of the strategy
is System1's principles of Fame, Feeling, and Fluency, and the research of
Orlando Wood, CIO at System1 and author of Lemon and Look out. His work
explores the impact of brand characters and right-brained features, elements
grounded in humanity, storytelling, and culture, contrasting with the more
functional, message-led, and performance-driven left-brained approach.
If Fame, Fluency and Feeling are the 'effectiveness engines' powering Very's
brand strategy, audience and cultural insight are the fuel on which they fire.
Very feed their model with rich audience data and relevant, resonant cultural
trends. A key inspiration is "hun culture," a uniquely British sub-culture,
characterised by a fabulous, cheeky, why-not vibe that finds joy in the
everyday. The potent mix of audience and cultural insights informed a brand
positioning of 'Flamingos in a flock of pigeons' - a positioning that speaks
to the attitude of Very and its customers.
The new creative platform launched in November 2023, in the UK's Superbowl of
advertising, the festive period. The launch introduced Very's new brand
characters, three fabulous flamingos - Kerry, Terry and Cherry - on a mission
to make Christmas sparkle. Not your classic festive bird, but one that would
become distinctively Very. While other retailers served up familiar festive
sentiment, Very strutted in, pink, proud, impossible to miss. The launch
creative delivered a strong 4.5 Star Nat Rep rating, and an exceptional 5.7
Star rating amongst Very's custom target audience.
Building the Platform
In 2023, following the festive launch of the "Let's make it sparkle" platform,
Very saw a 3.4% year-on-year sales growth during their Golden Quarter,
excelling in toys, gifts, beauty and electricals. This uplift aligned with
System1 data, brand health tracking and econometric results, proving the value
of a data-driven approach.
But Very didn't stop there. Across the next year they doubled down on creative
consistency. In March 2024, they refreshed their Very Pay always-on creative
with their flamboyant flamingo world. By July 2024, their Back to School
campaign extended the "Let's make it sparkle" platform to this key family
moment, positioning Very as a go-to for parents year-round. Consistent use of
brand characters, smart media placement and audience-focused targeting drove
positive sentiment and consideration, reinforcing the power of a cohesive,
consumer-first strategy.
This strategic consistency enabled Very to expand into new categories,
building awareness, fame and fluency in fashion. Having already built an
incredibly distinctive animated world, Very understood that fashion would need
a bespoke approach. Very took the essence of their strategy and translated it
to fashion with the same vibrancy and flamingo energy associated to the brand.
Haus of Flamingo launched Autumn Style, Very's first Fashion TV campaign in
seven years, driving a huge 10% year-on-year growth in womenswear
consideration and an exceptional 5.7-star rating among its target audience.
"It was fantastic to see our distinctive creative strategy extend into Haus of
Flamingo and our style categories. The bespoke approach we took gave Haus of
Flamingo a unique feel, but one which still had our Very sparkle at its core.
We couldn't be happier with the way the campaign connected with our audience
and increased consideration for Very's fashion offering," Jessica Myers, Chief
Customer Officer at Very.
Our work with Amazon Ads saw us on stage together at Cannes bringing our
research and expertise to audiences.
""Building emotions, building showmanship, really telling that emotional
relevant stories to our audience that helps build mental availability. I
mean we saw the data from System1, that really helped us. At the end of the
day there is an economic value on creating an emotional story." Lucia Ying,
Head of Global SMB Brand Strategy & Beyond-Amazon Business at Amazon Ads
FY25 was also a year of driving the flywheel forwards, identifying and
removing any blockers to progress and accelerating the momentum we built up in
FY24:
1. We help the world's largest brands make confident creative decisions
that lead to transformational business results
We have kept the customer at the heart of all we do and the first stakeholder
in our decision making. We have proven that we can help our target market -
the world's largest brands - across pre-testing and improvements of
advertising, innovation as well as in brand tracking.
Creativity remains at the core of the success of our customers advertising,
innovation and brand growth - as demonstrated by data from over 5,000 IPA case
studies which shows a 12x impact on the profit multiplier. This has been
further proven out in our partnership with the Effies, with data from over 380
Global Marketers. While it also remains true that 51% of advertising has no
impact on market share growth and that 95% of new product launches fail, the
accurate predictiveness of our tests on our platform and the expert guidance
provided by our people give our clients the confidence that their products and
services will be a success when launched in the market.
And most importantly, our clients know that once launched, these adverts and
innovations will drive real business results for them: growth of their brand,
revenue and profit.
2. We've created a platform and proposition … to help the world's
largest brands make confident creative decisions
We achieve this by measuring what matters most: emotion, that gets to your
"System 1" response. Our IP and thought leadership have built on the work by
Daniel Kahneman in "Thinking Fast and Slow" that sets out how System 1
thinking is fast, instinctive, emotional and drives behaviours. Our clients
are clear that our ability to capture, measure and interpret emotional
responses to creative content is the number one reason they buy from us, and
many say that we do what no-one else in the market can do. Our platform,
products and guidance are built on measuring emotion and translating that data
into actionable insights that will deliver real business results.
We have invested in our platform and product development, with the relaunch of
the Test Your Innovation product suite in early FY25 alongside continued
enhancements to our Test Your Ad product suite. I am very excited about the
launch of a new Test Your Ad - Social product in early FY26.
In early FY25, we launched a new Test Your Innovation product suite to replace
Test Your Idea. This repositioned the previous version in a way that better
suits our clients, helping our products meet our customers standard product
development cycles.
Our post-launch analysis tells us 5-Star ideas achieve three times more sales
than 1-Star ideas. We help our customers gain valuable insight by benchmarking
their results against our extensive database of over 54,000 ideas so they can
be confident that they are investing in the best ideas for their business.
Underpinning our Test Your Innovation platform and product is our patented
share-trading methodology, while continuing to measure what matters most,
emotion. How people feel about an idea, is a better predictor than what they
think about it. Using FaceTrace technology, Test Your Innovation measures the
emotional response of real people to predict potential in market success of
each idea. And building on our thought leadership, Test Your Innovation
Guidance allows our customers to improve their ideas through our unique
insights and consultancy offerings.
FY25 has been a year of reaping the rewards of the expansion of the Test Your
Ad product suite that was delivered in FY24. To recap, our Test Your Ad suite
covers all media types from early-stage scripts to finished films, to ensure
we have the fastest, most predictive, actionable products that meet our
customers' needs. Alongside TV testing, we offer TYA for Digital, Audio, Out
of Home and Print testing, allowing our customers to test full campaigns
across media types. Alongside the platform and products, we refreshed our
data-led consultancy, to incorporate our latest thought leadership, providing
an updated framework on how advertising works and recommend improvements for
our clients.
But we haven't sat on our laurels and we have continued to invest in our Test
Your Ad proposition. We have been working in partnership with TikTok to build
out a new 'Test Your Ad - Social' product and proposition, which launched in
early FY26. This allows customers to go beyond the traditional engagement
metrics on social platforms, to truly understand why their campaigns are
working. We test with a real social media audience and retain emotional
response at the core of the IP. Our new skippable analysis method also
includes features to understand how campaigns perform in the unique social
landscape; including Attention Trace, Key Brand Assets, & how entertaining
their assets really are.
In addition to launching our new product, we've continued to enhance both our
platform and overall user experience. This year, we introduced an AI-powered
quality monitoring tool designed to reduce fraudulent responses and ensure
higher data integrity. We also made significant strides in streamlining
customer onboarding and showcasing new, high-impact features. A refreshed
report navigation experience is now live, offering a cleaner and more
intuitive interface.
We continue to prove the effectiveness of our methodology with real-world
validations. In preparation for the peak holiday sales period, we conducted
pre-launch testing in the US on all of LEGO's 2024 Advent Calendars. The
results showed strong positive correlation (+0.8) between our proprietary Star
scores and subsequent product sales on Amazon, affirming the predictive value
of our validation tools.
3. We're famous for predictions and improvements … that help the world's
largest brands make confident creative decisions
In FY25, we made strong progress, achieving record levels of brand awareness
across all parts of Fame building. We published new thought leadership that
addresses the key challenges facing marketers today, shared weekly insights
via our System1 and Uncensored CMO channels and established new partnerships
with leaders like Effie and TikTok that will bring global research to the
market in FY26. The combined fame-building efforts led to a 174% increase in
new contacts to the System1 database compared to FY24.
Thought Leadership - Our thought leadership secured the highest number of
downloads ever in FY25. We published and participated in new industry-leading
research including:
· Compound Creativity, a report exploring the business impact of
consistency, that was downloaded by nearly 4,000 people
· The Extraordinary Cost of Dull, a report revealing the hidden
cost of dull ads, with more than 3,000 downloads
· WARC's The Multiplier Effect report, which was downloaded by more
than 6,000 marketers
· The Long and Short (form) of it, in partnership with TikTok, a
report launched in early FY26 which reveals how short-form entertainment
builds brands and converts on social medial platforms.
We continued our tradition of sharing creative analysis and best practices
around major marketing moments like the Christmas period and Super Bowl, with
the Super Bowl securing 66% YOY growth for webinar registrants and 630 new
database contacts.
Partnerships - A new 2-year partnership with Effie enabled us to create a
whitepaper being published in FY26, announced via a speaking slot for
Professor Mark Ritson at the 2025 Cannes Lions Festival. The research frames
creativity as an investment that offers lasting outcomes and pays back in an
effort to help marketers communicate the value of brand building principles
like emotion and consistency.
Our new partnership with TikTok brings together System1 Test Your Ad platform
data with Brand and Conversion Lift Studies from TikTok to highlight the keys
to digital creative effectiveness through 'The Long and Short (form) of it'.
This launches early FY26 via SWSX and Cannes festivals.
Events - We continued to build more personal relationships with marketers and
promote our latest thought leadership, by exhibiting at and attending many
leading marketing conferences and events, including ANA Masters of Marketing,
Cannes Lions, Festival of Marketing and MAD//Fest. These included speaking
spots alongside WARC and other Multiplier Effect partners at Advertising Week
New York, with Duolingo & Liquid Death at SXSW, and with client Good Feet
Store at the ANA conference.
PR - We leveraged major advertising occasions like the Super Bowl and
Christmas to secure features in Adweek, The Drum, Campaign, Marketing Week and
the Financial Times. Globally, we achieved a 25% YOY increase in the number of
news stories mentioning System1 and a 75% increase for the US market. This
resulted in System1's share of voice increasing 4% in the US and 12% in the
UK, including 30% SOV in the US for the Super Bowl.
Most brands use System1 while they're still making their ads to check they're
hitting the right emotional beats. The success of Aldi's Kevin the Carrot
campaigns, which feature Kevin getting into superhero-style scrapes across the
dinner table, can largely be put down to System1" Stuart McGurk, Financial
Times.
"Uncensored CMO" Podcast - Uncensored CMO maintained its position as the #1
marketing podcast in the UK and rapidly climbed the charts in the US by
booking the biggest names in marketing, creating compelling content, expanding
to YouTube and authentically weaving in System1 thought leadership.
The podcast now has 50% of its guests coming from the US, with listeners up
over 100% in the U.S. and 30 million social media impressions in the last
year, with the U.S. being the largest market.
Brands like OREO, Yum! Brands, Rare Beauty, Poppi, AB InBev, Amazon, Google
and more all appeared and customers like Pfizer and Very promoted the value of
their relationships and ad testing with System1.
Social - We surpassed the 50,000-follower milestone on System1's LinkedIn
page, growing total followers by more than 50% in FY25. In addition to
advertising content, we leveraged both social and the website to share regular
insights around innovation to support the relaunched Test Your Innovation
platform.
We also continued to see unprecedented growth and engagement rates among "Top
Voices" like Jon Evans, Andrew Tindall and Vanessa Chin. Top Voices regularly
amplified System1 thought leadership and our popular Ad Of The Week feature,
helping to drive traffic to the System1 website, demo and thought leadership
forms.
4. We make it easy for System1 to convert the world's largest brands at
the right time
FY25 surpassed FY24's record breaking year for new client wins, driven by our
market-leading platform, proposition and fame-building activities. Mike
Perlman had his first full year as Chief Commercial Officer, with global remit
for commercial success, while being based in the US. His leadership has seen
System1 step change the pace and structure of the commercial business as well
as recruit in top talent to help drive forward our success.
We won 310 new clients, delivering £8.1m of new revenues primarily in the US
and the UK, reflecting our focus on the largest markets. Our go-to-market
focus has seen real success in specific sectors such as Food and Beverage,
Tech and Retail. As always, we are not permitted to name many of our clients,
and new wins in the period included: TikTok; a global market leader in
enterprise application software; one of Britain's leading retailers; a US
manufacturer of carbonated beverages; a large, global investment management
firm with US$20 billion in annual revenue and a global flag-carrier airline.
With 99% of our new revenues coming from our strategic platform of predictions
and improvements, we saw clear evidence that our proposition meets the needs
of the world's largest brands and they have less reliance on bespoke
consultancy.
5. We scale up and are embedded throughout the world's largest brands
We saw continued excellent levels of revenue growth, with total revenues up
25% and platform revenues up by 39%. Our platform Net Revenue Retention
improved year-on-year to 106%, with our FY24 customer base increasing their
spend across our platform offer.
Concentration in our top 10 and top 20 clients was consistent year on year.
Our top 10 clients made up 31% of revenue and our top 20 clients 42% of
revenue. The proportion of spend from the top 20 clients on platform products
and data-led consultancy increased to 90% in FY25 from 78% in FY24 with 18 of
our top 20 clients buying these services. No one client's revenue in FY25
represented more than 10% of System1's revenue.
The majority of System1 revenue comes from the world's largest brands who
follow our model of test and improve, buying data and data-led consultancy. In
FY25 71% of total revenue came from the 34% of clients by number that
purchased both data and consultancy (vs 75% from 40% in FY24). Conversely,
just 23% of Group revenue came from the 60% of clients by number that
purchased only data (vs 16% from 51% in FY24).
We are incredibly proud to serve some of the world's largest brands, as we
work with 5 of the top 10 US brands and 8 of the top 10 UK brands. The
opportunity to grow share of spend from these brands is high as we continue to
develop relationships with them over time.
6. We reinvest the results of higher volumes and margins from helping the
world's largest brands make confident creative decisions
In FY25, we grew profit before tax by 71%, supported by gross profit margin
growth +1 point to 88% and ahead of our 85% long-term benchmark. We stepped up
investment in FY25 across our people, our platform and proposition, while also
rewarding our shareholders with a dividend and 120% EPS growth.
People - We continued to incentivise and reward colleagues through our
variable pay model, linked to growth in the Group's gross profit. This
continues to be a good motivator for front line commercial colleagues as well
as maintaining morale and retention across the global work force.
Platform and proposition - In FY25, we increased our investment in our
platform and proposition to continue to accelerate revenue growth. We
maintained cash spend on our IT development and TYA premium and increased
expenditure on our go-to-market teams. In addition, we have committed an
additional discretionary £2m in FY26 to accelerate profitable growth and
revitalise our Innovation proposition.
.
Dividends - In FY25, the Group resumed dividend payments with a 5p per share
dividend for FY24. We are proposing a total payout of 11p per share dividend
for FY25, split equally between ordinary and special dividends, subject to
shareholder approval at the forthcoming AGM, reflecting our confidence in the
prospects for the business.
7. We have a robust support structure and performance culture that allows
us to help the world's largest brands make confident creative decisions
FY25 has seen System1 maintain highly motivated teams with strong retention
and employee engagement, through our performance culture. We have created an
environment where all colleagues can work together, focus on adding value to
our customers. We actively remove the blockers from our teams' day-to-day
lives and have seen staff happiness improve on record levels from FY24. In
addition, System1 has been recognised as a Great Place to Work® in both the
US and UK, while being awarded "UK Best Workplace for Development". In
parallel, we were proud to receive the AIM Governance Award 2024, which
recognises companies that lead the way in transparency, Board leadership and
building long term value. This is a strong endorsement of how we run the
business and the standards we hold ourselves to, both internally and in the
eyes of our investors and the wider market.
Conclusion: we have momentum to grow in a massive market and continue to
invest
I remain excited by the three big strategic growth opportunities identified
last year that we continue to be laser focussed on, namely the US market,
Innovation, and growing our share of business with the world's largest brands.
We are just scraping the surface of the opportunities in each of these areas.
With our strong balance sheet and business health, we are accelerating our
investment at a time when we believe some competitors are scaling back
investment. In December 2024 we announced £2m of investment in medium term
growth during FY26 in addition to existing commitments in strategic growth
areas including such as AI. Importantly, we maintain a focus on cash-flow and
margin to ensure we balance growth with business stability. We have provided
an up-to-date outlook for the business in our July Q1 trading statement.
Finally, thank you to our customers for their continued commitment to world
class marketing with confidence in their creative, to our shareholders for
their continued support, to our staff for their dedication and focus, and to
our Board for the strategic direction and backing.
James Gregory
Chief Executive Officer
9 July 2025
Financial Review
Overview
Results for the year ended 31 March 2025 2024 Change Change*
("FY25")
("FY24")
£m £m £m %
Platform Revenue ** 34.5 24.8 9.7 39%
Other Revenue (Bespoke consultancy) 2.9 5.2 (2.3) -45%
Total Revenue 37.4 30.0 7.4 25%
Direct Costs (4.5) (3.9) (0.7) 17%
Gross profit 32.9 26.1 6.8 26%
Operating costs (28.0) (23.4) (4.6) 19%
Other operating income 0.4 0.4 0.0 -8%
Profit before tax 5.3 3.1 2.2 71%
Tax charge (0.8) (1.1) 0.3 -23%
Profit for the financial year 4.5 2.0 2.4 120%
All figures in the Financial Review are presented in millions rounded to one
decimal place unless specified otherwise. Percentage movements are calculated
based on the numbers reported in the financial statements and accompanying
notes.
* Year-on-year percentage change figures are based on unrounded numbers.
** Data and data-led consultancy
Key performance indicators
FY25 FY24 Change*
£m £m
Platform revenue growth 39% 43% -4 points
Number of clients 563 428 31%
Gross profit % Revenue 88% 87% 1 points
Adjusted profit before tax (1) 5.2 3.1 68%
Adjusted EBITDA £m (2) 6.6 4.4 52%
Adjusted EBITDA % Revenue 18% 15% 3 points
Rule of 40 (3) 57% 57% 0 points
Free Cash Flow (FCF) £m (4) 4.2 4.0 0.2
Net Cash £m 12.9 9.6 34%
Diluted earnings per share 35.2p 16.0p 120%
Ordinary dividend per share 5.5p 5.0p 10%
Special dividend per share 5.5p - nm
( )
( )
(1. ) Profit before tax plus share-based payment expenses
(2. ) Profit before tax + share-based payments (inc. associated
social security provision) + interest, depreciation and amortisation
(3. ) Platform Revenue growth %+ Adjusted Group EBITDA % Group
Revenue
(4. ) Cash flow after interest and before debt
raising/reduction, buybacks/dividends
( )
Revenue performance
Total Revenue reached £37.4m, up 25% on FY24, and Platform Revenue rose by
£9.8m (39%) in the year to £24.6m, due mainly to continued strong growth in
automated ad-testing revenues (Test Your Ad). Data-led consultancy revenue
rose by 42% with clients of Test Your Ad wanting to understand how to further
improve the effectiveness of their creative content. Overall platform revenue
represented 92% of total revenue in FY25, compared with 82% in the previous
year. Other Revenue, primarily bespoke consultancy, fell by £2.4m in the
year, as customers continued to adopt the standard platform products, and the
company focused its resources accordingly.
The Communications (Comms) product group, including Test Your Ad, grew by
£8.7m (38%) year-on-year, driven predominantly by the US, where Comms revenue
grew by 68% year on year. Comms revenue, including ad-testing, accounted for
84% of all revenue in FY25 (FY24: 76%) Innovation revenues decreased by £1.2m
(29%), and Brand Tracking revenues were down by £0.1m (3%). The geographic
spread of the business has shifted year on year with the US increasing its
share of Group revenue by 5% to 34%, and a corresponding decrease in
continental Europe. Revenue in the UK rose by 28% and accounts for 43% of the
total.
Direct costs
Direct costs increased by 17% year on year on Revenue growth of 25%,
reflecting the continuing growth in the proportion of Platform Revenue and
efficiencies in the supply chain, including further investment in automation.
As a consequence of these improvements the gross profit margin rose by 0.9
points to 88%.
Operating costs
Total operating costs increased to £32.9m (FY24: £23.4m) due mainly to
employment costs (headcount increased 16% year on year), increased customer
acquisition costs, lower net benefit of capitalised IT development costs, and
foreign exchange translation effects on non-sterling debtors and bank
accounts. Some £3.2m was invested in development and innovation during the
year, related primarily to the marketing predictions platform, automated
prediction products, TYA Premium database, and AI-related research and
development (FY24: £3.1m).
Average employee numbers rose from 144 in FY24 to 167, attributable to growth
in the commercial, marketing, product and research & guidance teams. In
December 2025 we announced an additional £2m investment aimed at building our
position in America and revitalising System1's Innovation proposition. Some
£0.1m of the additional investment was spent in the final quarter of FY25
Profit before taxation
Profit before taxation for the year of £5.3m was £2.2m higher than the
previous year owing to higher sales volumes and improved gross margins, more
than offsetting the 19% increase in operating costs.
Taxation
The Group's effective tax rate decreased sharply from 35% to 16%. This is due
mainly to the impact of UK R&D tax credits in respect of FY23 and FY24,
which have been surrendered for group relief in FY25. Excluding these R&D
tax losses, the effective tax rate for the Group would have been in the region
of 30%. The Company intends to submit an R&D claim for FY25, however
following legislative changes to the UK R&D regime effective from 1 April
2024, any amounts received will be reflected in pre-tax earnings and subject
to corporation tax. Accordingly, the Company expects the effective tax rate in
future periods to be in the region of 25% to 35%.
Funding and liquidity
Cash balances rose by £3.3m from £9.6m to £12.9m, broadly in line with the
£4.0m free cash flow minus the £0.6m dividend paid during the year. A second
consecutive year of strong cash generation reflected increased profitability
and improved collections - details in Note 10. Of the £6.2m cash generated
from operations; £0.6m was invested, including £0.5m in capitalised software
development; and £0.8m was spent on property leases including imputed
interest. A weaker US$ across the period compared to FY24 reduced the year-end
value of non-Sterling cash balances by £0.3m.
Dividend
Following the resumption of a dividend last year, the Board is proposing an
ordinary dividend of 5.5p per share for FY25 (FY24: 5.0p) and an additional
special dividend of 5.5p per share. The proposal will be put to the Group's
annual general meeting on 24 September 2025, with an ex-dividend date of 25
September, record date of 26 September and payment date of 17 October. The
proposed combined dividend payments represent ca 31% of earnings.
Chris Willford
Chief Financial Officer
9 July 2025
Principal Risks and Uncertainties
The Board is responsible for reviewing risk and regularly reviews the risks
facing the Group, as well as the controls in place to mitigate potential
adverse impacts. The risk register is assessed at every monthly Board meeting.
The Audit Committee reviews the effectiveness of financial controls. The Board
endeavours to identify and protect the business from the big remote risks:
those that do not occur very often, but which when they do, have major
ramifications. The types of event that we are concerned about and seek to
manage are summarised below.
Risk Area Potential Impact Mitigation
Loss of a significant customer Revenues and profits fall due to the loss of a large customer We work with more than 500 customers and work hard to earn their loyalty. Our
customer base is diversified such that we have no customers contributing over
10% of revenue.
Loss of key personnel Key personnel leave the business, taking knowledge and external relationships We seek to ensure that System1 is as attractive to existing employees as it is
with them. to talented external recruits. Reward is competitive, and regular performance
evaluation identifies individuals who may be "at risk". For the most senior
executives, the LTIP (long-term incentive plan) and STIP (short-term incentive
plan) are designed to provide a strong financial motivation to stay at
System1. These incentives are reviewed periodically to ensure they remain
effective.
Loss of a critical supplier The bankruptcy, change of control or resignation of a strategic supplier We have several mission-critical functions carried out by third-party
leaves the Group unable to meet customer demand suppliers (such as panel suppliers). For these functions, we seek to ensure we
are not too reliant on any one organisation and typically have three qualified
providers. We work in close co-operation with our strategic suppliers,
ensuring that any issues and concerns are surfaced rapidly and resolved in
partnership.
Loss of assets, data, intellectual property Theft of intellectual property via unauthorised or illegal access to or We endeavour to protect the business from significant risks, through a
copying of the Company's databases, proprietary methods, and algorithms combination of trademark protection; insurance; development of internal
guidelines and policies; comprehensive information security programme, and our
employee, customer and supplier terms and conditions.
Litigation risk Legal action is taken against the Company by customers, employees, suppliers, We endeavour to protect the business from significant risks, through our terms
or other stakeholders and conditions, trademark protection and comprehensive professional indemnity
insurance.
Risk Area Potential Impact Mitigation
Strategic risk Technological advances including artificial intelligence reduce the commercial The Group positions itself as "the most predictive" provider of information to
viability of the Group's methodology support creative and marketing decisions. Currently a combination of real-life
panel respondents and System1's methodology achieves this goal. Our S1
Futures programme includes an exploration into how AI could transform
predictive research.
The Group does not compete effectively in the largest and faster-growing The Group formally reviews product and geographic markets as part of its
markets regular strategy review. We have increased our presence in the US to reflect
the significant opportunity in that market and are relaunching Test Your
Innovation in order to improve our performance in the largest of our chosen
product markets.
Operational risk An outage or other technical issues on our survey platform results in delays All our services are hosted on a secure external cloud infrastructure with
in delivering customer projects multiple failover options. We continuously monitor system availability and
endeavour to alert the customer to any delays on the rare occasions where
there is disruption.
A reduction in panel data quality affects the company's reputation with key We conduct both operational and strategic reviews of respondent quality in
customers close collaboration with our approved panel suppliers and can switch provider
where required via our platform API.
A cyber-attack causes a material breach to our infrastructure Our business does not ordinarily hold non-employee personal data. Any personal
data of clients' or suppliers' employees is held by System1 in compliance with
the applicable legislation. We have invested in our controls (including
penetration tests), processes and IT infrastructure and have held ISO 27001
accreditation covering information security since 2019.
The volume of change initiatives could lead to a loss of operational control All change initiatives are subject to project governance, and development is
run on an "agile" methodology. The Executive Team reviews operational
performance regularly providing early warning of potential deviations from
plan. The Board reviews operational performance monthly and strategic
direction regularly and when appropriate.
A subsidiary incurs substantial losses The Group operates a highly centralised model with minimal delegation of
financial authority below the Executive Directors. All bank payments and
transfers have to be authorised by Group Finance.
Financial risk Failure to manage credit, currency, market, interest rate or liquidity risk Due to the straightforward nature of the business, its international cost
expose the Group to losses base, the Group's strong balance sheet, and the fact that most of the Group's
customers are large, credit-worthy organisations, foreign exchange and credit
risks have historically proved to be modest. Further information is given in
Note 8 to the financial statements.
Environmental and political risks The Group's revenue streams could be affected by customers' decisions to The Group trades principally in the UK and the USA and is exposed to the
reduce marketing budgets social and economic impacts in those regions. The 2020 Covid-19 pandemic
demonstrated the Group's resilience during an economic downturn. The main
exposure is to our customers' decisions on the size of market research budgets
in response to external events and macroeconomic factors such as inflation and
interest rate increases.
Shareholder relations: the Company's plans could be opposed by significant The Company holds comprehensive investor one-on-one and group meetings in
shareholders roadshows at least twice a year. In addition, quarterly trading updates
provide an opportunity to engage with shareholders and potential investors.
Political risk through adverse regime or regulatory change The territories representing the vast majority of the Group's revenue are
socially, politically, and economically stable. We do not currently service
clients based in Russia or Belarus, and our operations have not been directly
affected by the ongoing conflicts in Ukraine or Gaza. We have a regional
operations centre in Brazil where just over 10 percent of our employees are
based and are comfortable that the benefits of the operation outweigh the
slightly elevated risks.
Conflicts of Interest Directors' and employees' personal, financial or business affairs may result The Board formally records directors' interests at each meeting, and
in situations where the company's interests are not fully aligned with their directors' new external appointments are notified as soon as is practical.
own
Below board level the company reviews senior employees' outside interests on a
case-by-case basis to ensure no detriment to the company arises.
Reputational risk Press releases or other statements from the company could include incorrect or All trade press releases are reviewed by at least one member of the Executive.
defamatory content, adversely affecting the company's reputation with Financial releases are reviewed by at least two Board members and our
customers and other stakeholders Nominated Adviser.
Comments or articles posted by employees on social media could adversely The Group has a social media policy which sets out employees' duty of care
affect the Group's reputation with customers and other stakeholders when posting work-related content on social media.
Section 172 Report
Section 172 of the Companies Act requires the Board to take into consideration
the interests of stakeholders in its decision making. This section provides
information about the Board's approach to engagement with stakeholders,
namely:
· Customers
· Talent
· Investors
· Suppliers
· Community and Environment
In determining the Board's approach, the Board members have regard to the
following:
· The likely consequences of any decision in the long term
· The interests of the company's employees
· The need to foster the company's business relationships with
suppliers, customers and others
· The impact of the company's operations on the community and the
environment
· The desirability of the company maintaining a reputation for high
standards of business conduct, and
· The need to act fairly as between members of the company.
Overarching the Group's approach to all stakeholders is System1's cultural
pyramid.
Customers
Our target customers are the world's largest brands. The board understands the
importance of forming and retaining good working relationships with its
existing and target customers.
These customers understand that creativity is the most powerful tool for
growth within their control.
'The power of creativity for growth could be considered our industry's most
fundamental reason for being.
Creativity is a superpower'
Marc Pritchard, P&G Chief Brand Officer'
System1 helps these companies make confident creative decisions that lead to
transformational business results. Our advertising and innovation tests
measure emotion to give our customers the most accurate predictions of the
business impact of creativity. We also provide expert guidance to our
customers to help them improve the effectiveness of their ad or innovation.
Talent
In April 2024, we adopted a Flexible Holiday policy, following a successful
trial in FY24. This builds on our Flexible Working approach and Flexible
Benefits platform, giving employees greater autonomy in how they choose to
work and rest. Feedback has been overwhelmingly positive, with many
highlighting how naturally the policy fits into our ways of working -
supporting a culture that trusts people to manage their time and energy in the
way that delivers their best.
This approach is reflected in our Great Place to Work® ("GPTW") results,
achieved in 2024 across the UK, EU, APAC, US and Brazil. Notably:
· 94% of employees in the US say System1 is a great place to work
(vs. 57% for a typical U.S. company)
· Employees globally say they can be themselves at work, feel
genuinely cared for, and trust the leadership team
· Our people describe a sense of pride in their work, a fair and
inclusive environment, and a shared commitment to doing things the right way
How we engage with our talent
We have cultural values (Customer Commitment, Creativity, Collaboration and
Conviction) as well as a set of team behaviours known as TIDE, which describe
how we work together.
Truth - always tell the truth… and tell it early
Intent - always assume good intent…yet resolve issues
Debate - Debate… Decide & Unite
Elephant - Don't allow 'elephants' in the room...yet be empathetic in dealing
with them
These behaviours help us create a high-trust environment, which we know from
both internal feedback and GPTW results is a critical driver of engagement and
performance We embed our values and behaviours by the following:
1. Introducing them to all employees during their onboarding programme, as
part of a 1Welcome afternoon, chaired by the CEO and Chief People Officer
2. Making them a consistent part of all company communications and
3. Celebrating examples of best practice with awards on our Town Halls.
We conduct quarterly employee input surveys using our FaceTrace methodology to
capture how employees feel about working at System1, alongside what's working
well and what could improve. These surveys are reviewed by the Board and
followed by team-level discussions chaired by leaders and the HR team to agree
improvement actions. Our Great Place to Work® feedback reinforces that this
approach is working - employees report feeling genuinely heard, supported, and
able to influence change.
In addition to monthly Town Hall meetings with all staff, we also host ad hoc
senior management forums and run monthly workshops with managers. These
meetings ensure consistent communication, alignment, and celebration -
including our System1 Value Awards, where employees are nominated for living
our values.
We pay fairly and equitably, with no discrimination across any factor. We
ensure this through benchmarking and annual salary reviews by individual and
by role.
There is a structured approach to career and professional development based on
our leadership and departmental frameworks. This ensures clarity and
consistency in expectations and performance ratings, supporting a culture of
continuous development. Our learning culture includes internal training,
professional certifications, MBA sponsorships, and new in 2025: internal
coaching.
Talent engagement outcome
We continue to develop our hybrid virtual working approach, working closely
with managers and all employees to maximise productivity, creativity and
happiness. We believe in a healthy performance culture and use the below model
to guide us in achieving this.
We are continuously evolving our engagement tools, based on feedback and
measures.
In October 2023, we introduced automated, mandatory 360 feedback for all
employees, and in March 2024, we launched departmental and behavioural
frameworks. These have been well received and provide a consistent,
transparent structure for feedback, development and career conversations -
reinforcing what our GPTW results highlight: a workplace where people feel
heard, valued and treated fairly.
We also invest in moments that matter, bringing people together in person for
connection and shared purpose. Our 1derful Wednesday events encourage social
connection in-office, while biannual regional and all-company strategy
meetings keep everyone aligned and inspired.
Our Great Place to Work® results help to validate our employee experience
efforts and show where we can continue to evolve. We are proud of the
recognition and even more proud that it reflects what our people experience
day to day: a company where they can thrive, feel trusted, and do their best
work.
Investors
The Company is committed to protecting and advancing the interests of its
shareholders. Our approach is grounded in strong governance, transparent
communication and direct alignment between shareholder value and leadership
performance. Our Board members hold a significant equity stake in the Company,
ensuring their decisions are closely aligned with long-term shareholder
interests. In parallel, executive management participates in a Long-Term
Incentive Plan (LTIP) directly tied to Company performance, reinforcing
accountability and a long-term value creation mindset. We believe shareholders
of all sizes deserve timely, direct access to information and leadership. The
Company maintains a proactive engagement program that includes one-on-one
meetings with major investors and prospective shareholders following full-year
and interim results, as well as post-AGM briefings.
To maximise access and reach, we host live online events through the
InvestorMeetCompany platform, including capital markets days, result
presentations and our Annual General Meeting. This ensures all shareholders,
retail or institutional, local or global, can engage directly with management
in real time.
Transparency is at the heart of our investor relations. We communicate
primarily through our corporate website, where we publish key reports,
disclosures and regulatory announcements. Shareholders receive at least 21
clear days' notice of the AGM, in line with best practice and regulatory
standards. Participation is strongly encouraged, both in person and virtually,
to ensure an open dialogue with the Board.
All shareholders receive the Annual Report electronically by default, with
printed copies available on request. Our interim results are also made
available online, ensuring uninterrupted access to key performance updates.
Beyond shareholders, we maintain regular, strategic communication with our
principal banking partner to keep them informed of performance, forecasts, and
key developments - ensuring confidence in the Company's financial health and
risk management.
We work closely with our Nominated Advisor, Canaccord, to ensure full
compliance with market regulations. They support all formal shareholder
communications and arrange our twice-yearly investor "roadshows".
Suppliers
We work with a small number of trusted suppliers and operate on a strong
partnership basis. As outlined in the Principal Risks and Uncertainties
section on page 22, the loss of a critical supplier could leave the Group
unable to meet customer demand, therefore the Board has regard to the
importance of fostering good relationships with our suppliers to promote the
success of the Group. Our approach is centred on lean principles and
continuous quality improvement, with weekly and monthly meetings to review
service levels, KPIs and resolve issues. We share data between teams to ensure
that there is one view of our partnership metrics.
Our key delivery suppliers include:
· MAP Marketing Research provides us with survey programming and
project management services
· Toluna, Prodege, Walr and NetQuest provide us with market
research panel respondents to complete our surveys
· Datawise provides us with bespoke data processing and charting
services on our non-standard deliverables
· Intonation provides us with translation services (forward
translation of questionnaires and back translation of respondent verbatim)
Community
ESG Strategy
In 2024 we launched a new ESG Strategy, driven by a steering committee formed
of Executive and Senior Managers in Talent, Legal and Finance departments and
with sign off from the Board. In April 2025 the Environmental, Social &
Governance (ESG) Committee was established to ensure that ESG matters are
embedded into the Group's strategy, culture, and operations. The Committee
plays a key role in monitoring ESG-related risks and opportunities and guiding
the Group's approach to responsible and sustainable business practices. The
Committee is chaired by Conrad Bona and comprises Chris Willford and two
Executive team members.
The ESG Committee is responsible for:
· Overseeing the development and implementation of the Group's ESG
strategy and related objectives.
· Reviewing and monitoring ESG key performance indicators and
metrics, where applicable.
· Providing direction on ESG risks, including those related to data
ethics, diversity & inclusion, and sustainability.
· Reviewing relevant ESG-related policies and codes of practice.
· Monitoring emerging ESG trends and assessing their impact on the
Group's operations and reputation.
· Overseeing the quality and integrity of ESG disclosures and
reporting.
· Considering the results of any ESG-related audits or external
reviews and the management response to those findings.
The Committee meets at least twice per year. It reports directly to the Board,
ensuring that ESG remains an integrated element of governance and strategic
planning. The ESG Committee also collaborates with other Board Committees
where responsibilities intersect, such as risk management and workforce
matters.
Environment
We understand the importance of tackling carbon emissions. Although System1's
operations fall outside of manufacturing and are primarily online, they are
not entirely carbon-neutral. System1 has partnered with Greenly, a leading
carbon emissions company. With their support, we have developed a
comprehensive plan to measure, reduce and offset our carbon footprint.
Since first reporting on our emissions for 2022, as part of our 2023
assessment, our emissions for 2022 were amended to 1.1k tCO2e (previously
1.3k tCO2e). This revision was due to updated categorisation of expenses and
changes to emissions factors. These adjustments are a standard part of any
climate strategy, ensuring emissions data remains accurate and aligned with
evolving methodologies. The assessment for 2023 was completed in early 2025
and our reported emissions had risen by 18% to 1.3k tCO2e, predominantly due
to a rise in travel and commuting. The 2023 assessment was deemed to be a more
representative picture of business-as-usual activity post-Covid and has been
set as our official baseline year for future reporting and tracking purposes.
Our assessment for 2024 is now also completed, and our reported emissions fell
back to 2022 levels of 1.1k tCO2e with reductions across the majority of
categories. Our reporting periods for our carbon emissions assessment are on a
calendar year rather than fiscal year basis, therefore the 2024 assessment
runs to 31 December 2024.
All emissions continue to fall under Scope 3 and our largest opportunities
for improvement remain in Services purchased and Travel and commuting. At 7.0
tCO2e per employee, our emissions are below the sector median value of 8.1
tCO2e per employee.
With Greenly's expertise and guidance, System1 is implementing solutions to
reduce emissions, including:
· Updated travel policy to encourage employees to take trains
rather than planes where possible, and to book through our dedicated travel
partner's system so that emissions are captured and reported accurately
· A more rigorous approval process for external conferences, to
promote local travel only
· Holding company events in the location in which most attendees
reside, to reduce the need for flying
· Switched to least data-intensive formats for our marketing assets
· Provision in our road map to include a clause that asks our
suppliers to conduct mandatory carbon reporting and target a 3% reduction, at
the time of contract renewals in new contracts
· Continue to extend lifespan of IT equipment (extended from 3 to 4
years from 2022 onwards) and run energy efficient operations through
optimising cloud computing and storage, further supported by Microsoft Azure's
strong ESG commitments
Social
We've made strong progress in bringing our commitment to social responsibility
and inclusivity to life across System1.
We successfully delivered unconscious bias training to all teams, supporting
inclusive teamwork, management, and recruitment. Participation is now being
tracked to ensure it remains embedded in our culture over time.
Our LookOut volunteering efforts continue to grow, with employees actively
participating in initiatives across London, São Paulo and beyond - including
mentoring programmes, community fundraising, and charitable donations. Our
next step is to encourage more local ownership of these initiatives, helping
teams drive impact in the communities they know best.
We now review our Diversity Policy annually as part of our ISO
responsibilities and have taken further steps to support fair and inclusive
hiring. All job ads are gender-decoded using AI software, and structured
interview training has been rolled out to hiring managers. We continue to
assess how consistently these inclusive tools are being used and look for
opportunities to strengthen our approach.
We've also appointed a dedicated and accredited global Health & Safety
representative, providing visible support for employee wellbeing across all
locations.
To support transparency, we launched a central ESG section on our company
intranet. While this is now live and accessible, we recognise there's further
potential to make it more dynamic.
As part of our commitment to continual improvement, we are also reviewing our
DE&I data and hiring trends to identify where we're doing well and where
we can do more. These insights help inform regular Talent team discussions,
ensuring DE&I remains a visible and ongoing priority in our people
strategy.
We're proud of the progress made and remain focused on building an inclusive
culture that enables everyone at System1 to thrive.
Governance
Strong governance remains central to how System1 builds trust, manages risk
and scales with resilience. In FY25, we continued to embed deeper oversight,
sharpen accountability and future-proof our practices as a digital-first,
insight-led business.
Governance structures evolving with the business
Our governance framework continues to be reviewed against AIM Code principles,
regulatory developments and peer benchmarks. To ensure relevance as we grow,
we will undertake a full review of all Board sub-committee Terms of Reference
in FY26.
From 1 April 2025, we also established a dedicated Nominations Committee to
support Board composition, leadership planning and succession. The Committee
comprises of four Non-Executive Directors, chaired by Phil Machray, and is
responsible for ensuring the Board and senior leadership retain the right mix
of skills, diversity and continuity to support the Group's strategy.
Board effectiveness and composition
A formal annual evaluation of Board performance helps us assess effectiveness,
identify areas for improvement and ensure our leadership remains aligned with
the company's strategic direction and future needs.
Enterprise risk firmly embedded
Risk now features as a standing agenda item in monthly Board meetings and
Executive Team strategy sessions. A dedicated oversight role enhances
visibility and coordination, ensuring key risks are proactively identified,
tracked and mitigated.
Policy renewal and leadership continuity
We maintain a rolling programme to update internal policies in line with
legal, operational and industry changes. Succession planning is regularly
reviewed to safeguard leadership stability and readiness.
Cybersecurity rigorously tested
In FY25, we completed a cyber threat simulation to assess the strength of our
defences and response protocols. The test validated our preparedness and
informed targeted enhancements to further strengthen resilience.
Recognition for compliance and strong oversight
System1 was proud to receive a 2024 AIM Governance Award, recognising our
commitment to transparency and high standards. We consult regularly with our
NOMAD on market best practices and engage closely with our Senior Independent
Director to continuously refine our approach. An internal governance oversight
function plays an important role in ensuring compliance is embedded and
scalable as we grow.
More dynamic stakeholder engagement
We're continually improving how we communicate with shareholders, employees
and wider stakeholders - creating clearer channels for feedback, more
responsive dialogue and greater alignment between stakeholder expectations and
business action.
On behalf of the Board
Chris Willford
Chief Financial Officer
9 July 2025
Group Directors' Report
Review of the business and future development
The Chairman's Statement, CEO's Statement, the Financial Review, the Section
172 Report, Principal Risks and Uncertainties, and the Corporate Governance
Report set out:
· the issues, factors and stakeholders considered in determining
that the Directors have complied with their responsibilities under section 172
of the Companies Act 2006 (Corporate Governance Review);
· the methods used to engage with stakeholders and understand the
issues to which the Directors must have regard under section 172 of the
Companies Act 2006 and the effect on the Company's decisions and strategies
during the year (Corporate Governance Review);
· the way that management view the business (Group Overview,
Chairman and CEO's statements, Financial Review);
· its strategy, positioning, and objectives (Group Overview,
Chairman and CEO's statements).
· its historic financial performance (Chairman and CEO's
statements, Financial Review);
· an assessment of its future potential (Group Overview, Chairman
and CEO's statements, Financial Review);
· its key performance indicators (Financial Review); and
· its key business risks (Principal Risks and Uncertainties).
Dividends
The Company paid a final dividend in respect of the year ended 31 March 2024
of 5.0p on 18 October 2024, and proposes to pay an ordinary dividend of 5.5p
per share for FY25, and an additional special dividend of 5.5p per share which
will be put to the Group's annual general meeting in 25 September 2025.
Directors
The following individuals served as directors of the Company, System1 Group
PLC, during the year and up to the date of approval of the financial
statements:
James Gregory (Executive)
John Kearon (Executive)
Chris Willford
(Executive)
Conrad Bona (Non-Executive)
Rupert Howell (Non-Executive)
Philip Machray (Non-Executive)
Sophie Tomkins (Non-Executive)
The Remuneration Committee Report sets out directors' interests in the shares
of the Company.
Share capital
At 31 March 2025, the Company had 13,226,773 Shares in issue (2024:
13,226,773) of which 537,700 were held in treasury (2024: 547,844). The
treasury shares will be used to help satisfy the requirements of the Group's
share incentive schemes.
Substantial shareholders
As at 2 June 2025, the Company was aware of the following significant
interests in the ordinary issued share capital of the Company.
No. % Voting shares
John Kearon 2,818,235 22.2
BGF Investment Management Limited 847,000 6.7
Herald Investment Mgt 595,111 4.7
Kestrel Investment Partners 584,943 4.6
Crucible Clarity Fund 567,895 4.5
Hargreaves Lansdown Asset Mgt 544,288 4.3
Ennismore Fund Mgt 437,276 3.5
Stefan Barden 426,048 3.4
Octopus Investments 416,937 3.3
Interactive Investor 399,520 3.2
Financial risk management
The Group's activities expose it to the following financial risks. Further
assessment of financial risks is outlined in Note 8 to the Consolidated
Financial Statements.
Credit risk
We manage credit risk on a Group basis, arising from credit exposures to
outstanding receivables and cash and cash equivalents. Since the majority of
the Group's customers are large blue-chip organisations, the Group rarely
suffers a bad debt. The Group's cash balances are held, in the main, at HSBC
Bank. The Group also utilises the Flagstone deposit platform to access higher
interest rate returns on surplus cash. The Group's treasury strategy focuses
on short-term deposits of three months or less and seeks to maximise amounts
covered by FSCS Protection.
Market risk - Foreign exchange risk
In addition to the United Kingdom, the Group operated in the United States,
Rest of Europe, Brazil, Singapore, and Australia during the period and was
exposed to currency movements impacting commercial transactions and net
investments in those countries. Management endeavours to match the currencies
in which revenues are earned with the currencies in which costs are incurred.
So, for example, the US operation generates most of its revenue in US dollars
and incurs most of its costs in US dollars also.
Liquidity risk
The Company monitors its cash balances regularly and holds sufficient cash in
immediately available current accounts to minimise liquidity risk.
Other risks
Management do not consider price risk or interest rate risk to be material to
the Group.
Capital risk management
The Group manages its capital to ensure that it can continue as a going
concern while maximising its return to shareholders. The Company has a £1.5m
secured overdraft facility with HSBC. To the date of the signing of these
financial statements, no amounts have been drawn under the overdraft facility.
The Group has not entered any derivative contracts.
Going concern
As noted in Principal Risks and Uncertainties, and in note 3 to the
consolidated financial statements, the Directors have considered financial and
operational risks in the prevailing economic climate and marketing industry
trends in the going concern assessment. In addition to the mitigating actions
taken by the Company to address these risks, the Directors have closely
monitored the performance of the Group throughout the year, noting the £12.9m
cash balance at year-end and the availability of a £1.5m overdraft facility
(which has not been drawn to date).
The Group has reviewed its financial forecasts for the 12 months from the
approval of these financial statements, flexing sensitivity analysis scenarios
with external and internal inputs that would represent the Group's central
forecast and various downturn scenarios.
Accordingly, after making appropriate enquiries, at the time of approving the
financial statements the Directors have a reasonable expectation that the
Company and the Group have adequate resources to continue in operational
existence for at least 12 months from the approval of these financial
statements. For this reason, the Directors continue to adopt the going concern
basis in preparing the Company and Group financial statements.
Research and development
The Company's Labs, Products, S1 Futures and IT Development teams are involved
in the development and validation of new market research methods and products.
Employees
The Group maintains fair employment practices, attempts to eliminate all forms
of discrimination and to give equal access, and to promote diversity. Wherever
possible we provide the same opportunities for disabled people as for others.
If an employee were to become disabled, we would make every effort to keep
them in our employment, with appropriate training where necessary.
Health and safety policies
The Group does not have significant health and safety risks and is committed
to maintaining high standards of health and safety for its employees,
visitors, and the public.
Directors' indemnities
Directors' and officers' insurance cover has been established for each of the
Directors to provide cover against their reasonable actions on behalf of the
Company. The indemnities, which constitute a qualifying third-party indemnity
provision as defined by Section 234 of the Companies Act 2006, remain in force
for all current Directors. All relevant information known to the Directors has
been relayed to the appointed auditor.
Disclosure of information to auditors
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the System1 Group PLC website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
In the case of each Director in office at the date the Directors' report is
approved:
· so far as the director is aware, there is no relevant audit
information of which the Group's and Company's auditors are unaware; and
· they have taken all the steps that they ought to have taken as a
director in order to make themselves aware of any relevant audit information
and to establish that the Group's and Company's auditors are aware of that
information.
On behalf of the Board
Chris Willford
Chief Financial Officer
9 July 2025
Statement of Directors' Responsibilities
The directors are responsible for preparing the Group Strategic Report, Group
Directors' Report, and the financial statements in accordance with applicable
law and regulations.
Company law requires the directors to prepare Group and Company financial
statements for each financial year. The directors have elected under company
law and are required by the AIM Rules of the London Stock Exchange to prepare
the group financial statements in accordance with UK-adopted international
accounting standards and have elected under company law to prepare the company
financial statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable law)
including Financial Reporting Standard 101 "Reduced Disclosure Framework".
The Group financial statements are required by law and UK-adopted
international accounting standards to present fairly the financial position
and the financial performance of the Group and Company. The Companies Act 2006
provides in relation to such financial statements that references in the
relevant part of that Act to financial statements giving a true and fair view
are references to their achieving a fair presentation.
Under company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and the Company and of the profit or loss of the Group
for that period.
In preparing each of the Group and Company financial statements, the directors
are required to:
a. select suitable accounting policies and then apply them consistently;
b. make judgements and accounting estimates that are reasonable and
prudent;
c. for the Group financial statements, state whether they have been
prepared in accordance with UK-adopted international accounting standards;
d. for the Company financial statements, state whether applicable UK
accounting standards have been followed, subject to any material departures
disclosed and explained in the Company financial statements;
e. prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Group and the Company will continue in
business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group and the Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and the Company and enable them to ensure that the financial statements
comply with the requirements of the Companies Act 2006. They are also
responsible for safeguarding the assets of the Group and the Company and hence
for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the System1 Group PLC website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
On behalf of the Board
Chris Willford
Chief Financial Officer
9 July 2025
Corporate Governance
Governance
System1 understands how vital good governance is for achieving our business
goals and sustainability targets. We will share more about our approach to
governance in later sections of this report.
We know that good governance is key for our Group's success. It benefits
everyone involved with our Group - not just our shareholders, but our
employees, clients, and partners too. That is why we have built a governance
structure that makes sure our decisions are transparent, responsible, and
uphold the highest ethical standards.
We are committed to ongoing review and refinement to make sure we manage risks
effectively and stay compliant with laws and regulations.
Our Board of Directors is central to our governance structure. It consists of
individuals with a wide range of skills and experiences. They provide critical
oversight, strategic counsel, and informed decision-making, ensuring our
commitment to the highest ethical standards is never compromised.
Employee engagement and development form a crucial part of our governance
strategy. Our significant investment in ongoing professional development
ensures our team is equipped with the latest industry knowledge, skills, and
best practices to deliver exceptional market research and insights to our
clients.
As we move forward, we are committed to maintaining and improving our
governance standards and to promoting a culture of responsibility, integrity,
and excellence throughout System1.
As an AIM-listed company, System1 adheres to the ten principles of the Quoted
Companies Alliance (QCA) Corporate Governance Code. The QCA Code identifies
ten principles that underpin growth in long-term shareholder value,
encompassing an efficient, effective and dynamic management framework
accompanied by good communication to promote confidence and trust.
Deliver growth
Establish a strategy and business model to promote long-term value for Our strategy is to grow the platform-based predictions business and achieve See Group Overview page 4 and CEO's Statement page 9
shareholders economies of scale
Understand and meet shareholder needs and expectations The CEO and CFO communicate regularly with investors during results roadshows, Visit system1group.com/investors for further information
webcasts, capital markets days and one-on-one meetings
Take into account wider stakeholder and social responsibilities and their The preferences of customers, employees, suppliers, community as well as See Section 172 Report page 25 and system1group.com/investors
implications for long-term success investors inform our decision making
Embed effective risk management, considering both opportunities and threats, The Board is responsible for setting risk appetite and tolerance. The See Principal Risks and Uncertainties page 22 and Board Effectiveness page 46
throughout the organisation Executive manages risk day to day, supported by the governance function
Maintain a dynamic management framework
Maintain the Board as a well- functioning, balanced team led by the Chair During FY25, the Board had two Committees: the Audit Committee and See Corporate Governance pages 42 and 43
Remuneration Committee. On 1 April 2025, the Board established three new
Committees; the Nomination Committee, the ESG Committee and the Quality
Committee. The composition and experience of the Board is reviewed in the
Board Evaluation.
All Directors recognise the need to commit sufficient time to fulfil the role.
This requirement is included in their letters of appointment. The Board is
satisfied that the Chair and Non-executive Directors devote sufficient time to
the Group's business.
Ensure that between them the Directors have the necessary up-to-date The Board members have the appropriate ranges of skills and experience, See Board experience pages 47 to 48 and Board Effectiveness page 46
experience, skills and capabilities covering, Sales & Marketing, Technology, Finance, Governance and
Sustainability
Evaluate Board performance based on clear and relevant objectives, seeking The Board carries out an annual effectiveness review assess its strengths and See Corporate Governance page 43 and Board Effectiveness page 46
continuous improvement areas for development and improvement
Promote a corporate culture that is based on ethical values and behaviours The culture of System1 is guided by the core "TIDE" values See Section 172 Report page 26
Maintain governance structures and processes that are fit for purpose and The Board is satisfied that the delegated authorities and budgetary processes See Board of Directors pages 47 - 48 and system1group.com/investors
support good decision making by the Board in the company are adequate to support its strategic growth plans. The Board
regularly considers the need to adapt and improve processes in line with the
growth of the company including any associated investment in tools and
resources.
Build trust
Communicate how the Company is governed and is performing by maintaining a The investors section of our website includes our Annual Report, results, See Remuneration and Audit Committee reports on pages 50 and 53 and
dialogue with shareholders and other relevant stakeholders presentations, notice of AGM and results of the AGM and general meetings. system1group.com/investors for further information
Strategy
All directors are familiar with the market in which the Group is operating,
the Group's value proposition, and its strategic intent.
The Board actively participates in setting, and regularly reviewing, the
strategy of the business, and is responsible for ensuring that the Company's
business model is, and remains, aligned to the achievement of its strategic
objectives. The Company sets out its strategy within the Strategic Report
section of its Annual Report and Accounts.
Risk management
The Board reviews the risks facing the business on a regular basis. The
identified principal risks and uncertainties are those outlined in the
Strategic Report.
The Board is responsible for the Group's system of internal controls and risk
management, and for reviewing the effectiveness of these systems. These
systems are designed to manage, rather than eliminate, the risk of failure to
achieve business objectives, and to provide reasonable, but not absolute
assurance against material misstatement or loss.
The key features of the Group's internal controls are described below:
· clearly defined organisational structure with appropriate
delegation of authority;
· comprehensive budgeting programme with an annual budget approved
by the Board;
· regular review by the Board of actual results compared with
budget and forecasts;
· regular reviews by the Board of full year expectations;
· detailed budgeting and monitoring of costs incurred on the
development of new products;
· a limited number of Directors and Executives authorised to commit
the company to legal agreements or make payments;
· regular reviews of customer and employee feedback;
· information security controls (for which the Company has obtained
ISO 27001 accreditation).
The Board take measures to review internal controls and embed risk management
procedures on an ongoing basis and implement metrics and objectives to monitor
the business as part of a continuous improvement programme.
Corporate culture
The Group endeavours to maintain a culture built on integrity. To surface
unethical or deceitful behaviours, it promotes openness amongst its employees,
provides channels for employees to feedback concerns to the Executive
Directors and the Board (such as anonymous employee feedback surveys, and
confidential whistle-blowing channels), and conducts exit interviews. Further
information on System1's culture and values can be found in the Section 172
Report.
The Board of Directors
The Board comprised three Executive Directors and four independent
Non-Executive Directors, including the Non-Executive Chairman for the year
ended 31 March 2025. The membership of the Board is set out in the Group
Directors' Report. We believe that the directors have the mix of leadership,
marketing and financial skills and experience necessary to oversee the Group
and deliver its strategy for the benefit of the shareholders over the medium
to long-term, and this mix is regularly under review as strategy develops. The
composition of the Board is set out on pages 47 to 48 and is intended to
achieve a balanced range of personal qualities and capabilities, and to
support the Company's commitment to promoting gender equality and diversity.
The biographical details of the directors are presented below.
The Board operates an induction programme for new Non-Executive Directors. The
Board reviews its AIM obligations with its Nominated Advisor annually and
endeavours to keep up with best practice governance via QCA seminars and
training material. All directors can access the Company's advisors and obtain
independent professional advice at the Company's expense in performance of
their duties as directors.
During the year, the Remuneration Committee sought advice from external
consultants on board and senior management remuneration. Neither the Board nor
the respective committees have sought other external advice on any significant
matter during the year. The Audit Committee works with the Company's auditor,
HaysMac LLP. The Board liaises regularly with the Company's Nominated Advisor,
Canaccord Genuity to ensure compliance with AIM Rules.
The Board considers each of the Non-Executive Directors to be independent, for
the following principal reasons:
· they all have served on the Board for less than ten years;
· their remuneration is not material in the context of their
financial circumstances;
· they have no executive role;
· they each own an immaterial number of shares in the Company in
the context of their financial circumstances;
· they are not related to any of the Executive Directors; and
· they have no material conflict of interest given their other
roles and business activities.
The Board schedules regular monthly meetings during the year, except for
August, and additional ad hoc meetings as required. All Directors can allocate
sufficient time to the Group to discharge their responsibilities fully. In
recent times, we have embraced a hybrid approach to our board and committee
meetings, conducting them both virtually via Microsoft Teams as well as in
person at our central London location. The number of regular meetings that
each director attended during the financial year is set out below:
Board Audit Committee Remuneration Committee
(12 meetings) (3 meetings) (2 meetings)
Rupert Howell 12 3 2
Sophie Tomkins 12 3 2
Phil Machray 12 3 2
Conrad Bona 12 3 2
James Gregory 12 2* 1*
John Kearon 12 1* -
Chris Willford 12 3* 1*
*by invitation
Matters reserved for the Board
The Board discusses and reviews all matters and issues which are important to
the business. Certain decisions are reserved for the Board, which include:
· approval of the Group's long-term objectives and strategy;
· approval of the annual operating and capital budget, and any
material changes thereto;
· extension of the Group's activities into new business or
geographic areas;
· changes to the Group's capital structure and/or major changes to
corporate structure, including acquisitions, disposals, and investments;
· approval of interim and annual reports, and regulatory or
non-routine shareholder communications;
· approval of significant changes in accounting policies or
practices;
· approval of share buybacks, dividends and dividend policy;
· assessment of the effectiveness of risk and control processes.
Matters referred to the Board are considered by the Board as a whole and no
one individual has unrestricted powers of decision. Where directors have
concerns which cannot be resolved in connection with the running of the Group
or a proposed action, their concerns would be recorded in the Board Minutes.
This course of action has not been required to date.
The provisions on engagement with stakeholders including shareholders,
employees and customers are dealt within the Section 172 Report on pages 25 to
33.
Appointment of Directors
The Board formally approves the appointment of all new Directors. Each year at
the Annual General Meeting, all Directors retire by rotation and are subject
to re-election.
Remuneration Committee
The Remuneration Committee is responsible for determining the specific
remuneration and incentive packages for each of the Company's Executive
Directors and keeping under review the remuneration and benefits of all senior
executives. Its members are:
Philip Machray - Chairman of the Remuneration Committee
Conrad Bona
Rupert Howell
Sophie Tomkins
The Remuneration Committee's role and responsibilities are to:
· review and approve the remuneration and incentive schemes of
Executive Directors, including pension rights, other benefits, and any
compensation payments, ensuring that no Director is involved in any decisions
as to their own remuneration;
· review and approve the level and structure of remuneration and
incentive schemes for senior management;
· select, appoint, and set the terms of reference for any
remuneration consultants who advise the Committee;
· approve the payments to Directors under any performance-related
pay or share schemes operated by the Group;
· ensure that contractual terms on termination of any Director are
fair to the individual and the Group, that failure is not rewarded and that
the duty to mitigate loss is fully recognised;
· approve any major changes in employee benefits structures
throughout the Group;
· approve the policy for authorising claims for expenses from the
Directors.
The Remuneration Committee schedules two formal meetings per year and meets at
other times as necessary. The Remuneration Committee may invite any of the
executive directors to attend meetings of the Remuneration Committee. The
Remuneration Committee may use consultants to advise it in setting
remuneration structures and policies. It is exclusively responsible for
appointing such consultants and setting their terms of reference.
The Annual Statement from the Remuneration Committee Chair is set out in the
Remuneration Committee Report on page 53.
Audit Committee
The Audit Committee is responsible for ensuring the financial performance of
the Group is properly monitored and reported on to shareholders, reviewing the
Group's financial systems and controls, and overseeing the Group's risk
management. Its members are:
Sophie Tomkins - Chair of the Audit Committee
Conrad Bona
Rupert Howell
Philip Machray
The Audit Committee's role and responsibilities are to:
· monitor the integrity of the financial statements of
the Group;
· review significant financial reporting matters
· review the Group's internal financial controls and risk
management systems;
· make recommendations to the Board, for it to put to the
shareholders for their approval in relation to the appointment of the external
auditor and to approve appropriate remuneration and terms of reference for the
external auditor;
· discuss the nature, extent and timing of the external
auditor's procedures and discussion of external auditor's findings;
· monitor and ensure the external auditor's independence
and objectivity and the effectiveness of the audit process;
· develop and implement policy on the engagement of the
external auditor to supply non-audit services;
· report to the Board, identifying any matters in respect
of which it considers that action or improvement is required; and
· ensure a formal channel is available for employees and
other stakeholders to express any complaints in respect of financial
accounting and reporting.
Board effectiveness
In line with best practice governance, the Group's Senior Independent Director
recently concluded the annual review of the Chair. This involved confidential
discussions with the independent Directors, to act as a sounding board for any
concerns, and to ensure that the Board is functioning optimally. The review
concluded that the Board meetings and Board matters were being run well, with
all Directors given full opportunity to express views and ask questions of the
Executive, and with clear goal setting and follow up of action points.
Additionally, this year's Board Evaluation was internally facilitated and
gathered the feedback of Directors across a series of questions addressing the
effectiveness of the Board and its Committees. It included a number of key
topics including:
· the effectiveness of the Board in setting strategy and assessing
risk;
· the relationship between the CEO and Chair;
· that decision making was balanced and objective and took active
account of relevant stakeholder issues;
· shareholder relations and communications;
· that the Board was effective and responsive to new information
and events; and
· that the Board had the appropriate composition and skills to
discharge its duties, and had sufficient process in place for regular
self-assessment.
Overall, the Board Evaluations have indicated that Board processes are robust,
and previous areas highlighted by the Evaluation, such as Strategy Deep Dives
and Risk Reviews, have been comprehensively addressed. The Board aims to meet
face to face as often as possible, and continues to review practical and
transparent ways of engaging with its shareholders.
A number of actions were agreed as part of this year's process, including
revisiting succession planning, reviewing all the Committee's Terms of
Reference, and reviewing the communication mechanisms used by the Board.
The skills and experience of the Board are set out in their biographical
details on pages 39 and 40. The experience and knowledge of each of the
Directors gives them the ability to constructively challenge strategy and to
scrutinise performance. The Board meets regularly with external experts
including the NOMAD to ensure that it remains abreast of developments and
current best practice.
All Directors undertook a thorough induction process on joining the Board,
tailored to the existing knowledge and experience of the Director concerned.
The Group maintains communication with a wide range of stakeholders to ensure
that their needs, interests and expectations are understood and reflected
within the Group's strategy and in Board decision making. Further details of
how the Board has taken account of the needs of the Group's stakeholders are
set out on pages 19 to 25.
Succession planning
The Board, led by the Chairman, carries out ongoing assessments as to the
succession needs and planning of the Board. Senior management appointments are
made by the Executive Directors, who carry out ongoing assessments of
succession needs and skills gaps across the business. Compensation
arrangements for key appointments are overseen by the Remuneration Committee.
In April 2025, we also established a dedicated Nominations Committee to
support Board composition, leadership planning and succession. The Committee
comprises of four Non-Executive Directors, chaired by Phil Machray, and is
responsible for ensuring the Board and senior leadership retain the right mix
of skills, diversity and continuity to support the Group's strategy.
The Board
CONRAD BONA
INDEPENDENT NON-EXECUTIVE DIRECTOR
Conrad joined System 1 Group in September 2022 as a Non-Executive Director.
Conrad is a business consultant, investor and entrepreneur who started his
career as a banking and finance lawyer and has worked in Toronto, London and
Tokyo. He has a degree in economics from the University of Western Ontario,
law degrees from the University of Edinburgh and the University of New
Brunswick and qualified to practise as a lawyer in multiple jurisdictions. No
longer practising law, Conrad now advises companies on a wide range of
commercial, financial and business matters. He has both Canadian and British
citizenship and is based in London, England.
Favourite ad of all time: John Lewis Monty the Penguin
JAMES GREGORY
CHIEF EXECUTIVE OFFICER
James Joined System1 Group as Chief Operating Officer in 2021 and was
appointed CEO in December 2023. Prior to joining System1, James worked at
HomeServe Plc as Chief of Staff, Tesco Plc as Online Director, and Capgemini
Consulting. He brings 16 years of leadership experience in strategy and
transformation, operations and commercial management across digital,
distribution and online retail environments. Past roles involved scaling
digital businesses, initiating and leading large scale, complex
transformations, and delivering new customer propositions.
Favourite ad of all time: John Smiths Peter Kay, 'Ave It
RUPERT HOWELL
INDEPENDENT NON-EXECUTIVE CHAIRMAN,
Rupert joined System1 Group in 2021 as a Non-Executive Director and became
Chairman in September 2022. He founded a multi-award-winning ad agency HHCL
(named 1 of the top 10 ad agencies of all time). Rupert was then CEO of Chime
Communications PLC, President EMEA of McCann Erickson, PLC Executive Director
at ITV PLC, Chairman of Matomy Media, and Executive Director of Reach PLC. He
is Co-founder/Chairman of Pinwheel, the sustainability and planet repair
platform, and Chairman of Synapse Technologies the PR & Journalist
marketplace.
Favourite ad of all time: Tango Slap
JOHN KEARON
FOUNDER AND PRESIDENT
John ("JK") founded the Company in 1999 and remains its largest shareholder.
During over 20 years as CEO, JK steered System1 from a start-up to where it is
today, shaking up traditional market research with fresh innovative thinking
& game-changing methods. Before System1, JK founded innovation agency,
Brand Genetics, after being Planning Director at Publicis, and holding various
research/marketing positions at Unilever.
Favourite ad of all time: Coca Cola Life Argentina
PHILIP MACHRAY
INDEPENDENT NON-EXECUTIVE DIRECTOR
Phil joined System1 Group in 2022 as a Non-Executive Director and was
appointed Chair of the Remuneration Committee in December 2022. He started his
career at Deloitte in 1992, rising to Director of Assurance and Advisory. He
then joined Trinity Mirror Group, where he held a number of roles, and became
Director of Corporate Development, reporting to the CEO, of what became Reach
PLC. Since 2021, Phil has worked at Merit Group, a data and intelligence
business, as Chief Financial Officer and since January 2024 Chief Executive
Officer. Phil serves as a Non-Executive Director of Digitalbox, a mobile-first
digital publisher and AIM-listed company.
Favourite ad of all time: John Smiths Peter Kay, 'Ave It
SOPHIE TOMKINS
INDEPENDENT NON-EXECUTIVE DIRECTOR
Sophie joined the Board as Non-Executive Director in June 2018, became Audit
Committee Chair in June 2019 and Senior Independent Director in August 2021.
Her career included nearly two decades as a London-based stockbroker, focusing
mainly on high growth small to mid-cap companies. She started at Cazenove
& Co, and became more entrepreneurial, at both Collins Stewart, and then
Fairfax. As a City Analyst, and then Head of Equities, Sophie advised numerous
companies and Boards on a huge range of high-profile IPOs and M&A deals.
She is currently Non-Executive Director and Audit Committee Chair of Virgin
Wines UK PLC and Wilmington PLC. Sophie is also a qualified Chartered
Accountant.
Favourite ad of all time: Yellow Pages JR Hartley
CHRIS WILLFORD
CHIEF FINANCIAL OFFICER
Chris joined System1 Group in 2020 as Chief Financial Officer. A Chartered
Management Accountant, he built his career with blue chip consumer businesses
including Unilever, British Airways (Group Treasurer) Barclays (Finance
director of Corporate Bank and UK Retail Bank) and Bradford & Bingley
(Group Finance Director). Prior to joining System1 in 2020, Chris worked as a
consultant with a portfolio of scale up media and tech businesses.
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Board skills and experience
Sales and marketing Technology Finance Governance Sustainability
Conrad Bona ★ ★ ★ ★
Rupert Howell ★ ★ ★ ★
John Kearon ★ ★ ★
Philip Machray ★ ★ ★
Sophie Tomkins ★ ★ ★
Chris Willford ★ ★ ★
James Gregory ★ ★ ★
Audit Committee Report
The Audit Committee is responsible for ensuring that the financial performance
of the Group is properly reported and reviewed. Its role includes monitoring
the integrity of the financial statements (including annual and interim
accounts and results announcements), reviewing internal control and risk
management systems, reviewing any changes to accounting policies, reviewing
and monitoring the extent of the non-audit services undertaken by external
auditors and advising on the appointment of external auditors.
Members of the Audit Committee
The membership of the Committee is set out on page 45 of the Corporate
Governance Report. All members of the Committee are independent Non- Executive
Directors. The Chief Financial Officer routinely attends the Audit Committee
meetings by invitation, but other Executive Directors or members of the
management team may also be invited to attend meetings as required. The
Non-Executive Directors are provided an opportunity at the Audit Committee
meetings to discuss matters with the Auditors without the presence of the
Executive Directors.
The Board is satisfied that the Chair of the Committee has recent and relevant
financial experience. Sophie is a Chartered Accountant and is also Chair of
the Audit Committee at Virgin Wines UK plc, and at Wilmington PLC. The Audit
Committee meets at least twice a year and more frequently if required and has
unrestricted access to the Group's auditor. Attendance at Board and Committee
meetings is set out in the Corporate Governance Report on page 43.
Duties
The main duties of the Audit Committee are set out in its terms of reference,
which are summarised on page 37 and available on the Group's website
(system1group.com/investors).
The work carried out by the Audit Committee during FY25 comprised the
following:
· ensuring the financial performance of the Group is being properly
measured and reported on;
· review of the audit plan;
· consideration of key audit matters and how they are addressed;
· going concern review;
· review of suitability of the external auditor;
· review of the financial statements and Annual Report;
· review of the appropriateness of the Group's accounting policies
and judgements made in the preparation of the financial statements, and
adequacy of the disclosures made therein;
· consideration of the external audit report and management
representation letter;
· review of the risk management and internal control systems;
· meeting with the external auditor without management present;
· review of anti-bribery policy and whistleblowing arrangements
Role of the external auditor
The Audit Committee monitors the relationship with the external auditor to
ensure that auditor independence and objectivity are maintained. As part of
this role, the Committee reviews the non-audit fees of the auditor. Non-audit
fees paid to HaysMac in the year under review pertain to the review of the
Interim Statement.
Auditor Performance
The Audit Committee also assesses the auditor's performance. The Committee has
adopted a broad framework to review the effectiveness of the Group's external
audit process and audit quality which includes: assessment of the audit
partner and team with particular focus on the lead audit engagement partner;
planning and scope of the audit, with identification of particular areas of
audit risk; the planned approach and execution of the audit; management of an
effective audit process; communications by the auditors with the Committee;
how the audit contributes insights and adds value; a review of independence
and objectivity of the audit firm; and the quality of the formal audit report
to shareholders. The Audit Committee recommends that HaysMac be appointed as
the Group's auditor at the next AGM. On the 18 November, the Group's auditor
changed its name from Haysmacintyre LLP to HaysMac LLP
Areas of key significance in the preparation of the financial statements
Prior to publication of this Annual Report and Accounts, the Committee
reviewed the accounting policies and significant judgements and estimates
underpinning the financial statements as disclosed in notes to the
consolidated financial statements.
Significant focus is placed on key accounting policies, including any
judgements and estimates, which underpin the financial statements, which
include:
· revenue recognition;
· capitalisation and valuation of intangibles;
· valuation and recognition of share-based payments
Further detail on the approach to these areas can be found in Note 4 to the
financial statements.
Audit process
The auditor prepares an audit plan for the review of the full period financial
statements. The audit plan sets out the scope of the audit, areas to be
targeted and audit timetable. This plan is reviewed and agreed by the Audit
Committee. Following the audit, the auditor presents its findings to the Audit
Committee for discussion. No major areas of concern were highlighted by the
auditor during the period; however, areas of significant risk and other
matters of audit relevance are regularly communicated.
Internal audit
At present the Group does not have an internal audit function and the
Committee believes that management is able to derive assurance as to the
adequacy and effectiveness of internal controls and risk management procedures
without one. During FY25, the Audit Committee commissioned a limited scope
internal audit review of key operating processes by an external advisor.
Risk management and internal controls
As described throughout the Annual Report and the Corporate Governance section
of the Group's website (system1group.com/investors), the Group has established
a framework of risk management and internal control systems, policies, and
procedures. The Audit Committee is responsible for reviewing the risk
management and internal control framework and ensuring that it operates
effectively. During the period, the Committee has reviewed the framework, and
the Committee is satisfied that the internal control systems in place are
currently operating effectively.
Whistleblowing
The Group has in place a process whereby employees can discuss concerns
confidentially, including a channel of communication directly with our
non-executive Directors. The Committee is comfortable that the current policy
is operating effectively.
Anti-bribery
The Group has in place an anti-bribery and anti-corruption policy which sets
out its zero-tolerance position and provides information and guidance to those
working for the Group on how to recognise and deal with bribery and corruption
issues. The Committee is comfortable that the current policy is operating
effectively.
Sophie Tomkins
Chair, Audit Committee
Remuneration Committee Report
Annual statement from the Remuneration Committee chair, Philip Machray
Dear Shareholder,
The Remuneration Committee sets the strategy, structure, and levels of
remuneration for the Executive Directors and reviews the remuneration of
senior management, to ensure alignment of objectives and incentives throughout
the business in pursuit of the Group's stated objectives. The membership and
terms of reference of the Remuneration Committee are set out in the Corporate
Governance Report.
This Remuneration Report is split into two parts:
1. The directors' remuneration policy sets out the Company's policy on
directors' remuneration, and the key factors that were considered in setting
the policy
2. The annual report on remuneration sets out payments and awards made to
the directors for the year to 31 March 2025.
There are three elements in director remuneration:
· Base salary
· Bonus (STIP)
· Long term incentive plan (LTIP) Benefits
The Committee regularly reviews the appropriateness of remuneration across the
Group and is satisfied that an appropriate reward structure exists below Board
level to recognise and retain our top talent.
Directors' remuneration policy
The policy described in this part of the Remuneration Report is intended to
apply for four years beginning in FY26 to FY29 and covers Executive Directors
and a small number of other senior managers ("Executives").
The Remuneration Committee considers the policy annually to ensure that it
remains aligned with business needs and is appropriately positioned relative
to the market.
The Committee has based the Executive reward structure on the long-term
organic growth strategy of the business. If successful, this will deliver
significant shareholder value, and Executive rewards are designed to correlate
with the key driver of that value (primarily revenue growth).
Fixed annual elements-including salary, pension, and benefits-are to recognise
the responsibilities and leadership roles of our Executives and to ensure
current and future market competitiveness. Variable elements - including
bonuses and Long-term incentives are to motivate and reward them for
delivering the Group's strategy and making the Group successful on a
sustainable basis.
The balance of variable elements, between short-term and long-term awards, is
designed to focus decision making on delivering shareholder value.
Base salary and benefits
FY24 and FY25: Base salary is paid in 12 equal monthly instalments during the
year. Salaries are reviewed annually, and any changes are effective from the
beginning of the Group's financial year (which is 1st April). Benefits
comprise money purchase pension contributions of up to 6% of salary, private
medical and dental insurance, life insurance and long-term disability
insurance.
Bonuses
In FY25 Executive Directors participated in a short-term incentive plan (STIP)
under which they could earn cash bonuses linked to their salary, for
achievement of annual targets for Gross Profit and Adjusted Profit before
Taxation. On target performance equated to a 100% of salary award to James
Gregory, 70% of salary for Chris Willford and 40% of salary for John Kearon.
STIP reward was capped at 2x the on-target %. Actual achievement in the period
was slightly ahead of target for both measures, resulting in respective
payouts of 114%, 79% and 45%.
The long-term incentive plan
The 2021 LTIP effectively came to an end with the conclusion of the FY25
results, with the performance conditions having not been met and all
outstanding awards fully expected to lapse before or on 12 August 2025.
Following consultation with shareholders, a new 2025 LTIP scheme was
introduced covering the period from 2025 to 2029. I wish to thank those
shareholders whom contributed to the consultation process, their insight being
a valuable contribution in the Committees' determination of the new LTIP
parameters.
2021 LTIP
The Threshold Target of £45m Revenue of the 2021 LTIP was not achieved, the
non-market performance conditions have not been satisfied within the specified
time-period and all accumulated charges have been released in full to the
income statement. A new 2025-2029 scheme was announced in May 2025 and
participants in the new 2025 scheme waived any residual entitlement regarding
change of control between 31 March 2025, and the publication of these
financial statements, upon which date all outstanding options under the 2021
LTIP lapse.
At 31 March 2025, there were three Executive Director participants in the 2021
LTIP (James Gregory, John Kearon and Chris Willford) and seven senior manager
participants. The specific vesting levels are set out as follows:
Equity level shares No. Of issued shares Revenue target
Executive Directors 154,311 1.2% £45.0m Threshold
308,623 2.3% £88.0m Stretch
462,934 3.5%
Senior Managers 230,023 1.7% £45.0m Threshold
460,047 3.5% £88.0m Stretch
690,070 5.2%
In May 2025 James Gregory and Chris Willford waived their 2021 LTIP awards.
The remaining awards lapsed on the publication of these financial statements.
Non-employee plan
As at 31 March 2025, Stefan Barden retained 46,995 of his Tranche 1 options.
All remaining options under this scheme lapsed upon the publication of these
financial statements.
2024 Executive option scheme
On 18 July 2024, the Committee granted 30,103 nil-costs share options to James
Gregory. These awards will vest on 17 July 2026 if he remains in office at
that time and are subject to no other performance conditions.
2025 LTIP
Under the 2025 LTIP, the Company has granted nil-cost options over ordinary
shares of 1p each in the Company to members of its executive team, including
two Executive Directors of the Company who are persons discharging managerial
responsibilities ("PDMRs"). For the PDMRs and certain members of the executive
team the awards detailed below replace the options granted to them under 2021
LTIP which have now been cancelled.
Key Terms of the 2025 LTIP:
The Options vest over three vesting dates starting at the end of July 2027,
subject to the achievement of threshold performance levels related to Revenue
and Adjusted Profit Before Tax for the year ending 31 March 2027 of £46m and
£5.9m respectively ("Threshold"),
· Full vesting of Options on the achievement of performance
targets as follows:
· Revenue of £60m, £71.0m and £85.0m for the year ending 31
March 2027, 31 March 2028 and 31 March 2029 respectively; and
· Adjusted Profit Before Tax(1) of £10.5m, £15.3m and £20.0m
for the year ending 31 March 2027, 31 March 2028 and 31 March 2029
respectively.
· together ("Target").
o 12.5% of the Options vest on achievement of Threshold, with proportional
vesting from the Threshold through to 100% on achievement of Target
performance. Revenue weighting is 60%, Adjusted Profit Before
Tax(1) weighting is 40%.
o First vesting 31 July 2027, second vesting 31 July 2028 and final vesting
31 July 2029.
o Maximum 50% vesting by 31 July 2027, 75% by 31 July 2028 and 100% by 31
July 2029.
o Share price underpin of £6.35 - equivalent to circa £80m market
capitalisation - applies to the three vesting dates, being 31 July 2027, 31
July 2028 and 31 July 2029.
o A maximum of 10% of the total share capital is capable of being awarded
under the 2025 LTIP. 3.5% is initially awarded to Executive Directors and
4.5% to the wider executive team, with the balance currently reserved for new
participants, if required.
o Vested shares, adjusted for the sale of ordinary shares to satisfy tax
liabilities arising on exercise of Options, will be subject to a mandatory
one-year holding period following each vesting date.
(1) Profit before tax plus share-based payment expenses
Dilution
There are no outstanding vested options at 31 March 2025 (2024: 10,144 options
under the 2010 - 2014 LTIP).
Unvested options at 31 March 2025 comprise options granted under the 2019 and
2021 LTIP schemes, the Non- Employee Plan, and the Executive option scheme,
all described above. The maximum aggregate dilution under these schemes is
9.7% of the Company's voting shares.
Non-Executive Directors
Non-Executive Directors do not participate in any of the Company's incentive
arrangements, nor do they receive any benefits. Their fees are reviewed
periodically and set by the Board as a whole.
Remuneration of all employees
All employees are entitled to base salary, benefits, and a discretionary
annual bonus or commissions.
Director service contracts and policy on payment for loss of office
All the Executive Directors have service contracts. The agreements include
restrictive covenants which apply during employment and for a period of 6
months after termination. All the Executive Directors' service contracts can
be terminated on six months' notice in writing by either the Company or the
director.
Annual report on remuneration
Remuneration for Executive Directors
Year ended 31 March 2025 (audited)
Salary Back-dated salary Payment in lieu of pension Bonus Benefits Pension Total
£ £ £ £ £ £
James Gregory 285,000 - - 327,411 - 18,497 630,908
John Kearon 190,000 - - 87,310 4,661 11,930 293,901
Chris Willford 210,000 12,600 168,875 4,838 - 396,313
Total 685,000 - 12,600 583,596 9,499 30,427 1,321,122
Year ended 31 March 2024 (audited)
Salary Back-dated salary* Payment in lieu of pension Bonus Benefits Pension Total
£ £ £ £ £ £
James Gregory 262,500 26,167 - 158,041 222 19,840 466,770
John Kearon 190,000 - 158,041 4,644 8,081 360,766
Chris Willford 210,000 12,600 158,041 4,940 - 385,581
Total 662,500 26,167 12,600 474,123 9,806 27,921 1,213,117
*Included with remuneration is an element of salary contractually agreed in
April 2023 in respect of services rendered from 6 December 2022 (appointment
as Chief Executive Officer) to 31 March 2023.
This Annual report on Remuneration discloses the highest paid director in the
year.
Directors' interests
The Directors who held office at 31 March 2025 held the following shares in
the Company as at that date:
No. % Dividends received in the year
John Kearon 2,818,235 22.2% 140,217
Chris Willford 33,666 0.3% 1,683
Conrad Bona 28,712 0.2% 1,320
James Gregory 15,384 0.1% 769
Philip Machray 15,380 0.1% 769
Rupert Howell 11,000 0.1% 500
Sophie Tomkins 8,000 0.1% 400
Directors' interests in options over shares and conditional shares of the
Company are shown below.
Date of grant Earliest exercise date Exercise price No. Granted in year Cancelled in year No.
at 1 Apr 2024
at 31 Mar 2025
James Gregory 27/10/2021 12/08/2022 0.0p 132,267 30,103 - 162,370
John Kearon 04/09/2019 12/08/2022 0.0p 198,400 - - 198,400
Chris Willford 27/11/2020 12/08/2022 0.0p 132,267 - - 132,267
There were no equity awards or vesting of options other than under the LTIP as
set out in the directors' remuneration policy.
Fees for Non-Executive Directors (audited)
The Non-Executive Directors received fees, but no other benefits, as follows.
2025 2024
£ £
Conrad Bona 38,000 38,000
Philip Machray 40,000 39,849
Rupert Howell 52,000 42,000
Sophie Tomkins 46,000 40,000
176,000 159,849
Philip Machray
Chair, Remuneration Committee
Independent auditors' report
to the members of System1 Group PLC
Opinion
We have audited the financial statements of System1 Group PLC (the 'parent
company') and its subsidiaries (the 'group') for the year ended 31 March 2025
which comprise:
Group Company
· The Consolidated Income Statement; · the Company Statement of Changes in Equity;
· the Consolidated Statement of Comprehensive · the Company Balance Sheet;
Income;
· the Consolidated Statement of Changes in Equity; · and related notes to the financial statements
· the Consolidated Balance Sheet;
· the Consolidated Statement of Cash flows;
· and related notes to the financial statements
The financial reporting framework that has been applied in the preparation of
the group financial statements is applicable law and UK-adopted international
accounting standards. The financial reporting framework that has been applied
in the preparation of the parent company financial statements is applicable
law and United Kingdom Accounting Standards, including Financial Reporting
Standard 101 "Reduced Disclosure Framework" (United Kingdom Generally Accepted
Accounting Practice).
In our opinion:
· the financial statements give a true and fair view of the state
of the group's and of the parent company's affairs as at 31 March 2025 and of
the group's profit for the period then ended;
· the group financial statements have been properly prepared in
accordance with UK adopted international accounting standards;
· the parent company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
· have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report.
We are independent of the group in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard as applied to listed entities, and we
have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
An overview of the scope of our audit
The Group consists of 13 components, located in various geographical
territories. All components are trading apart from System1 Agency Limited and
System1 AdRatings Limited, which are dormant. Three UK components, System1
Research Limited, System1 Agency Limited and System1 AdRatings Limited are
exempt from statutory audit requirements but audit work on these was performed
to component level materiality where considered appropriate.
The scope of the audit and our audit strategy was developed by using our audit
planning process to obtain an understanding of the Group, its activities, its
internal control environment, current, and where relevant to our audit, likely
future developments.
Our audit testing was informed by this understanding of the Group and
accordingly was designed to focus on areas where we assessed there to be the
most significant risks of material misstatement.
Audit work to respond to the assessed risks was performed directly by the
audit engagement team who performed full scope audit procedures on the Parent
Company and the Group as a whole.
Our audit planning and risk assessment identified 3 components (one of which
was System1 Group PLC, the Parent company) which were categorised as full
scope audits. One component was deemed to be material to the group and
specific scope procedures were performed. The remaining components were deemed
to be out of scope (analytical review components), however it was decided as
part of our group scoping that we would perform specific audit procedures over
revenue across all components to achieve 100% coverage of this balance.
Further information around these procedures is disclosed within the key audit
matters section of this report.
The below graphs summarise the monetary coverage achieved through our audit
procedures:
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
Our evaluation of the directors' assessment of the group's ability to continue
to adopt the going concern basis of accounting included:
· Discussing management's assessment of the group's ability to
remain a going concern;
· Reviewing and understanding the cash flow forecasts for the
period to end of July 2026 which are the central element of management's going
concern assessment;
· Assessing and challenging the inputs in and judgements made in
the preparation of the cash flow forecasts for the period to the end of July
2026; and
· Performing stress tests including sensitivity analysis to model
the effect of changing assumptions made or amending key data used in
management's cash flow forecasts and considering the impact on the group's
ability to adopt the going concern basis.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group's ability to continue as
a going concern for a period of at least twelve months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on:
· the overall audit strategy,
· the allocation of resources in the audit; and
· directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
In determining the key audit matters we considered the:
· Areas of higher risks of material misstatement or significant
risks identified in accordance with ISA (UK) 315
· Significant audit judgements on financial statement line items
that involved significant management judgement such as accounting estimates,
and
· The impact of significant events and transactions during the
period covered by the audit.
The following table summarises the key audit matters we have identified and
rationale for their identification together we how we responded to each in our
audit and our key observations. The table also shows how our judgement of the
magnitude of each risk has changed since the previous audit.
Key audit matter How we addressed the key audit matter in the audit
Revenue recognition (Group) In response to this risk, our work consisted of, but was not limited to, the
following audit procedures in respect of all full scope and specific scope
The Group's revenue recognition policy is included within the accounting components:
policy in Note 4 of the financial statements.
During the year ended 31 March 2025, the Group have recognised revenues of
£37,426k (2024: £30,019k). The Group recognises revenue largely at the point · We gained an understanding of key processes and controls relating
in time at which the final written debrief becomes available to the customer. to the revenue process and revenue recognition, through the documentation of
This is deemed by management to be the point at which the performance walkthrough procedures for each material revenue stream to assess the design
obligations are satisfied, and control is transferred to the customer. and implementation of controls;
The application of the five-step model of IFRS 15, in particular determining · We assessed the Group's accounting policy for each revenue stream
whether a contract exists with a customer, and the determination of whether with reference to the five-step model of IFRS 15, "Revenue from Contracts with
the performance obligations included in such contract have been satisfied, Customers";
involves judgement. Revenue is also deemed to be a key metric to users of the
financial statements. As a result, this was deemed to be an area of high · We performed a substantive review over the occurrence of revenue
importance in the Group audit and was therefore determined to be a key audit through reconciling cash receipts in the period to the nominal ledger;
matter.
· We performed substantive testing over a sample of transactions
recorded in the nominal ledger to supporting documentation to demonstrate the
performance obligations were met and revenue recognised appropriately in the
year;
· We performed test of details for transactions In March 2025 and
April 2025, obtaining evidence to demonstrate the performance obligations were
satisfied in the period in which the transaction had been recognised;
· Using Data Analytical procedures, we performed a review of
entries posted to revenue accounts in the period to determine entries which
did not follow the expected flow of transactions; and
· We performed an analytical review of revenue and gross profit
from 1 April 2024 to 31 March 2025 to assess the cut off of revenue by
comparing actuals to our expectation. We obtained supporting rationale for any
variances outside of our expectations
In addition to the above procedures performed over the full scope components,
we also performed substantive analytical review procedures in respect of all
other out of scope components, providing 100% coverage over the Group's
revenue as at the 31 March 2025.
Our application of materiality
The scope and focus of our audit were influenced by our assessment and
application of materiality. We define materiality as the magnitude of
misstatement that could reasonably be expected to influence the readers and
the economic decisions of the users of the financial statements. We use
materiality to determine the scope of our audit and the nature, timing and
extent of our audit procedures and to evaluate the effect of misstatements,
both individually and on the financial statements as a whole.
Group Financial Statements Parent Company Financial Statements
Materiality £480,000 (2024: £278,000) £100,000 (2024: £98,700)
Benchmark Materiality for the Group was determined to be 1.25% (2024: 1%) of total Materiality for the Parent company was determined to be 1.25% (2024: 1%) of
forecast Group revenues for the period, based on the point at which we total assets. The Parent company is a holding company for investments in
performed our audit planning and risk assessment. subsidiaries, intercompany balances and intangible assets, and as such total
assets is deemed to be an important metric to users of the Parent company
Revenue is a key metric to management and users of the financial statements, financial statements.
and as such was deemed the most appropriate benchmark for determining
materiality.
We also considered other important metrics in determining materiality for the
Group, and the chosen revenue materiality fell within the acceptable range for
these alternative metrics, including EBITDA and Net Profit.
Whilst Group revenues finished slightly lower than the initial expectation, we
elected to not adjust Group materiality to reflect 1.25% of actual Group
revenues. Our materiality therefore reflected 1.28% of Group revenues.
Basis for, and judgements used in the determination of materiality Revenue is a key metric to management and users of the financial statements, The Parent company is a holding company for investments in subsidiaries,
and as such was deemed the most appropriate benchmark for determining intercompany balances and intangible assets, and as such total assets is
materiality. The Group's long term strategic plans highlight a focus on deemed to be an important metric to users of the Parent company financial
revenue growth. statements.
We also considered other important metrics in determining materiality for the
Group, such as profit based metrics, and the chosen revenue materiality fell
within the acceptable range for these alternative metrics.
Performance materiality - Based on our risk assessment and our review of the
Group's control environment, performance materiality was set at 70% of
materiality, being £336,000 (2024: £181,000). We determined performance
materiality to be 70% for the Group and all full scope components on the basis
that there are no significant control weaknesses across the Group. We do note
that the entity is AIM listed and therefore is a higher level of risk. We
evidenced effective controls in place which mitigate the risk of misstatement
and have obtained evidence to support their effectiveness through our
assessment of controls and walkthrough procedures. We typically set
performance materiality between 50% and 75% of materiality.
Performance materiality for the Parent company was set at 70% of materiality
being £70,000 (2024: £64,200).
Reporting threshold - The reporting threshold to the audit committee was set
as 5% of materiality, being £24,000 (2024: £13,900).
Reporting threshold for the Parent company was set at 5% of materiality, being
£5,000 (2024: £4,940).
Other information
The directors are responsible for the other information. The other information
comprises the information included in the annual report, other than the
financial statements and our auditor's report thereon. Our opinion on the
financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements, or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial period for which the financial statements are
prepared is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the parent company financial statements are not in agreement with
the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the
directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group's and the parent company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to
liquidate the group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below. However, the primary
responsibility for the prevention and detection of fraud rests with both those
charged with governance of the Group and management.
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
Based on our understanding of the company and industry, we identified that the
principal risks of non-compliance with laws and regulations related to
regulatory requirements in respect of employment law, including but not
limited to minimum wage regulation, and food standards requirements. We
considered the extent to which non-compliance might have a material effect on
the financial statements. We also considered those laws and regulations that
have a direct impact on the preparation of the financial statements such as
the Companies Act 2006, payroll tax and sales tax.
We evaluated management's incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of
controls) and determined that the principal risks were related to posting
inappropriate manual journal entries to revenue and the risk of management
bias in accounting estimates. Audit procedures performed by the engagement
team included:
· Discussions with management including consideration of known or
suspected instances of non-compliance with laws and regulation and fraud;
· The evaluation of management's controls designed to prevent and
detect irregularities;
· The identification and review of manual journals, in particular
journal entries which shared key risk characteristics; and
· The review and challenge of assumptions, estimates and judgements
made by management in their recognition of accounting estimates.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an Auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Jon Dawson (Senior Statutory Auditor)
For and on behalf of HaysMac LLP, Statutory Auditors
10 Queen Street Place
London EC4R 1AG
9 July 2025
Consolidated Income Statement
for the year ended 31 March 2025
Note 2025 2024
£'000 £'000
Revenue 5 37,426 30,019
Cost of sales 16 (4,565) (3,898)
Gross profit 32,861 26,121
Administrative expenses 16 (27,975) (23,434)
Other operating income 17 381 413
Operating profit 5,267 3,100
Finance income 20 62 44
Finance expense 20 (26) (35)
Profit before taxation 21 5,303 3,109
Income tax (expense)/credit 21 (830) (1,076)
Profit for the financial year 4,473 2,033
Attributable to the equity holders of the Company
4,473 2,033
Earnings per share attributable to equity holders of the Company
Basic earnings per share 23 35.3p 16.0p
Diluted earnings per share 23 35.2p 16.0p
The notes on pages 71 to 104 are an integral part of these consolidated
financial statements.
All the activities of the Group are classed as continuing.
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2025
2025 2024
£'000 £'000
Profit for the financial year 4,473 2,033
Other comprehensive income:
Items that may be subsequently reclassified to profit/(loss)
Currency translation differences on translating foreign operations (255) (72)
Other comprehensive income for the period, net of tax (255) (72)
Total comprehensive income for the period attributable to equity holders of 4,218 1,961
the Company
The notes on pages 71 to 104 are an integral part of these consolidated
financial statements.
Consolidated Balance Sheet
as at 31 March 2025
Registered company no. 05940040
Note 2025 2024
£'000 £'000
ASSETS
Non-current assets
Property, plant, and equipment 6 638 225
Intangible Assets 7 1,254 1,578
Deferred tax asset 22 194 151
2,086 1,954
Current assets
Contract assets 205 180
Finance lease receivable 9 - 85
Trade and other receivables 10 6,822 7,261
Cash and cash equivalents 8 12,871 9,610
19,898 17,136
Total assets 21,984 19,090
EQUITY
Attributable to equity holders of the Company
Share capital 11 132 132
Share premium account 1,601 1,601
Merger reserve 477 477
Foreign currency translation reserve 96 351
Retained earnings 4 11,797 8,007
Total equity 14,103 10,568
LIABILITIES
Non-current liabilities
Lease liabilities 15 - 66
- 66
Current liabilities
Provisions 12 - 6
Lease liabilities 15 526 280
Contract liabilities 14 758 1,137
Income taxes payable 643 470
Trade and other payables 13 5,954 6,563
7,881 8,456
Total liabilities 7,881 8,522
Total equity and liabilities 21,984 19,090
The notes on pages 71 to 104 are an integral part of these consolidated
financial statements.
These financial statements were approved by the directors on 9 July 2025 and
are signed on their behalf by:
James Gregory Chris Willford
Director
Director
Consolidated Statement of Cash Flows
for the year ended 31 March 2025
Note 2025 2024
£'000 £'000
Net cash generated from operations 25 6,199 6,430
Tax paid (687) (499)
Net cash generated from operating activities 5,512 5,931
Cash flows from investing activities
Purchases of property, plant, and equipment 6 (127) (97)
Purchase of intangible assets 7 (468) (736)
Net cash used by investing activities (595) (833)
Net cash flow before financing activities 4,917 5,098
Cash flows from financing activities
Interest received 61 36
Interest paid (26) (35)
Property lease liability payments (732) (1,121)
Dividends paid to shareholders 24 (634) -
Net cash used by financing activities (1,331) (1,120)
Net increase in cash and cash equivalents 3,586 3,978
Cash and cash equivalents at beginning of year 9,610 5,719
Exchange loss on cash and cash equivalents (325) (87)
Cash and cash equivalents at end of year 12,871 9,610
Office lease costs are not included within "Net cash flow before financing
activities" (the Company's key cash flow performance indicator). "Net cash
flow before financing activities", adjusted for office leases, known by the
Company as "Operating cash flow" is shown below:
2025 2024
£'000 £'000
Net cash flow before financing activities 4,917 5,098
Net cash flow for property leases (758) (1,156)
Operating cash flow 4,159 3,942
The notes on pages 71 to 104 are an integral part of these consolidated
financial statements.
Consolidated Statement of Cash Flows (continued)
for the year ended 31 March 2025
Consolidated Movements in Net Cash and Financing Activities
Cash and cash equivalents Lease liabilities Total
£'000 £'000 £'000
At 1 April 2023 5,719 (1,456) 4,263
Cash flows 3,978 1,156 5,134
Non-cash charges
Interest on lease liabilities - (34) (34)
New lease liabilities (175) (175)
Disposal of lease liabilities - 163 163
Exchange and other non-cash movements (87) - (87)
At 31 March 2024 9,610 (346) 9,264
Cash and cash equivalents Lease liabilities Total
£'000 £'000 £'000
At 1 April 2024 9,610 (346) 9,264
Cash flows 3,586 758 4,344
Non-cash charges
Interest on lease liabilities - (26) (26)
New lease liabilities (955) (955)
Disposal of lease liabilities - 42 42
Exchange and other non-cash movements (325) 1 (324)
At 31 March 2025 12,871 (526) 12,345
Consolidated Statement of Changes in Equity
for the year ended 31 March 2025
Note Share capital Share premium account Merger reserve Foreign currency translation reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
At 31 March 2023 132 1,601 477 423 5,974 8,607
Profit for the financial year - - - - 2,033 2,033
Other comprehensive income:
- currency translation differences - - - (72) - (72)
Total comprehensive income - - - (72) 2,033 1,961
Transactions with owners:
Employee share options:
- value of employee services 10 - - - - - -
At 31 March 2024 132 1,601 477 351 8,007 10,568
Profit for the financial year - - - - 4,473 4,473
Other comprehensive income:
- currency translation differences - - - (255) - (255)
Total comprehensive income - - - (255) 4,473 4,218
Transactions with owners:
Employee share options:
- value of employee services 10 - - - - (64) (64)
- deferred tax credited to equity 15 15
Dividends paid (634) (634)
At 31 March 2025 132 1,601 477 96 11,797 14,103
The notes on pages 71 to 104 are an integral part of these consolidated
financial statements.
Notes to the Consolidated Financial Statements
for the year ended 31 March 2025
1. General information
System1 Group PLC (the "Company") was incorporated on 19 September 2006 in the
United Kingdom. The Company's principal operating subsidiary, System1 Research
Limited, was at that time already established, having been incorporated on 29
December 1999. The address of the Company's registered office is 4 More London
Riverside, London, England, SE1 2AU. The Company's shares are listed on the
AIM Market of the London Stock Exchange ("AIM").
The Company and its subsidiaries (together the "Group") provide market
research data and insight services. The Chief Executive's Statement and the
Financial Review provide further detail of the Group's operations and
principal activities.
2. Basis of preparation
The Group has prepared its consolidated financial statements in accordance
with UK-adopted international accounting standards and applicable law. The
consolidated financial statements have been prepared under the historical cost
convention.
The preparation of financial statements in accordance with UK-adopted
international accounting standards ("UK-adopted IFRS") requires the use of
certain critical accounting estimates. It also requires management to exercise
its judgement in the process of applying the Group's accounting policies. The
critical accounting judgements and estimates applied in the preparation of the
consolidated financial statements are disclosed in Note 4.
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates ("the Functional Currency"). The consolidated financial
statements are presented in Pounds Sterling (GBP), which is the Company's
functional and presentation currency. The financial statements are presented
in round thousands unless otherwise stated.
3. Going concern
The Group has prepared its financial statements on a going concern basis.
As noted in the Financial Review, cash balances and cash flow are healthy, and
we will continue to invest in our products, data assets and talent. We ended
the year with a cash balance and net cash of £12.9m and net assets at £14.1m
(31 March 2024: £9.6m and £10.6m respectively).
The Group has reviewed its financial forecasts for the 12 months from the
approval of these financial statements, flexing sensitivity analysis scenarios
with external and internal inputs that would represent the Group's forecast
and various downturn scenarios. Our internal assessment of a reasonable
worst-case scenario shows that, in the face of a striking negative downturn on
System1's immediate capacity to function, management would respond
appropriately by reducing our costs as soon as possible.
The Group is very confident in its ability to respond to an abrupt negative
situation, whatever the cause. Our mitigating factors involve an active review
cycle of the Group's performance. The Board reviews the performance of the
Group monthly, and senior management has a weekly assessment of sales revenue
and gross profit. The Group also reviews its profit forecasts on a monthly
basis.
The Group is confident that our strong balance sheet position, in particular
the cash balance, will be able to sustain the Group reasonably until July 2026
and beyond.
4. Principal accounting policies
The principal accounting policies adopted are consistent with those of the
financial statements for the year ended 31 March 2024.
Standards, amendments, and interpretations in issue but not yet effective
The Group adopted the following new pronouncements during the year ended 31
March 2025, which did not have a material impact on the Group's financial
statements:
• Classification of Liabilities as Current or Non-current and
Non-current Liabilities with Covenants - Amendments to IAS 1 (effective for
periods commencing on or after 1 January 2024)
• Lease Liability in a Sale and Leaseback - Amendments to IFRS 16
(effective for periods commencing on or after 1 January 2024)
• Disclosures: Supplier Finance Arrangements - Amendments to IAS 7
and IFRS 7 (effective for periods commencing on or after 1 January 2024)
The following standards and amendments, issued before 31 March 2025 with an
effective date on or after 1 April 2025, have not been early adopted by the
Group, they do not have a material impact on the Group's financial statements:
• Lack of exchangeability - Amendments to IAS 21 (effective for
periods commencing on or after 1 January 2025)
• Classification and Measurement of Financial Instruments -
Amendments to IFRS 9 and IFRS 7 (effective for periods commencing on or after
1 January 2026)
The following standards and amendments, issued before 31 March 2025 with an
effective date on or after 1 April 2025, have not been early adopted by the
Group, and have not yet been assessed for impact on the Group's financial
statements:
• IFRS 18 - Presentation and Disclosure in Financial Statements
(effective for periods commencing on or after 1 January 2027)
Basis of consolidation
The Group financial statements consolidate those of the Company and all its
subsidiary undertakings drawn up to 31 March 2025.
Subsidiaries are all entities over which the Group has power over the
subsidiary, i.e. the Group has existing rights that give it the ability to
direct the relevant activities (the activities that significantly affect the
subsidiary's returns), exposure or rights, to variable returns from its
involvement with the subsidiary and the ability to use its power over the
subsidiary to affect the amount of the subsidiary's returns.
The Group obtains and exercises control through voting rights.
The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether the Group
controls another entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are de-consolidated from the
date that control ceases.
The Group uses the acquisition method of accounting to account for business
combinations. The consideration transferred for the acquisition of a
subsidiary is the fair values of the assets transferred, the liabilities
incurred, and the equity interests issued by the Group. The consideration
transferred includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Acquisition related costs are expensed
as incurred. Identifiable assets acquired, liabilities and contingent
liabilities assumed in a business combination are measured initially at their
fair values at the acquisition date.
On an acquisition-by-acquisition basis, the Group recognises any
non-controlling interest in the acquiree either at fair value or at the
non-controlling interest's proportionate share of the acquiree's net assets.
The excess of the consideration transferred, the amount of any non-controlling
interest in the acquiree and the acquisition-date fair value of any previous
equity interest in the acquiree over the fair value of the Group's share of
the identifiable net assets acquired is recorded as goodwill.
All intra-group transactions and balances are eliminated on consolidation.
Unrealised gains on transactions between the Group and its subsidiaries are
eliminated. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Amounts reported
in the financial statements of subsidiaries have been adjusted where necessary
to ensure consistency with the accounting policies adopted by the Group.
Property, plant, and equipment
Property, plant, and equipment are stated at historical cost less accumulated
depreciation and accumulated impairment losses. Depreciation is provided to
write off the cost of all property, plant, and equipment to its residual value
on a straight-line basis over their expected useful economic lives, which are
as follows:
Furniture, fittings, and equipment 5 years
Computer hardware 3 to 4 years
The residual value and useful life of each asset is reviewed and adjusted, if
appropriate, at each balance sheet date.
Depreciation on all property, plant and equipment is charged to administrative
expenses.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The
right-of-use asset is measured at cost, which comprises the initial amount of
the lease liability, adjusted for, as applicable, any lease payments made at
or before the commencement date net of any lease incentives received, any
initial direct costs incurred, and an estimate of costs expected to be
incurred for dismantling and removing the underlying asset, and restoring the
site or asset.
Right-of-use assets are depreciated on a straight-line basis over the
unexpired period of the lease or the estimated useful life of the asset,
whichever is the shorter. Where the Group expects to obtain ownership of the
leased asset at the end of the lease term, the depreciation is over its
estimated useful life. The Group had no such lease arrangements for the years
ended 31 March 2025 or 2024.
Right-of use assets are subject to impairment or adjusted for any
remeasurement of lease liabilities to reflect the actual and expected effect
of exercising extension and termination options in lease arrangements.
Depreciation on all right-of-use assets is charged to administrative expenses.
Finance lease receivables
Amounts due from lessees under finance leases are recognised as receivables at
the amount of the group's net investment in the leases. Finance lease income
is allocated to accounting periods so as to reflect a constant periodic rate
of return on the group's net investment outstanding in respect of the leases.
Subsequent to initial recognition, the group regularly reviews the estimated
unguaranteed residual value and applies the impairment requirements of IFRS 9,
recognising an allowance for expected credit losses on the lease receivables.
Finance lease income is calculated with reference to the gross carrying amount
of the lease receivables, except for credit-impaired financial assets for
which interest income is calculated with reference to their amortised cost
(i.e. after a deduction of the loss allowance).
Intangible assets
Software
Costs incurred in the development of identifiable and unique software products
controlled by the Group, and that will probably generate economic benefits
exceeding costs beyond one year, are recognised as intangible assets.
Costs include professional fees and directly attributable employee costs
required to bring the software into working condition. Non-attributable costs
are expensed under the relevant income statement heading.
Research and development - internally generated intangible assets
All on-going research expenditure is expensed in the year in which it is
incurred. Where no internally generated intangible asset can be recognised,
development expenditure is charged to administrative expenses in the period in
which it is incurred.
Furthermore, internally generated software and product development costs are
recognised as an intangible asset only if the Group can demonstrate all the
following conditions:
a) the technical feasibility of completing the intangible asset so that it
will be available for use or sale;
b) its intention to complete the intangible asset and use or sell it;
c) Its ability to use or sell the intangible asset;
d) how the intangible asset will generate probable future economic
benefits; and among other things, the Group can demonstrate the existence of a
market for the output of the intangible asset or the intangible asset itself
or, if it is to be used internally, the usefulness of the intangible asset;
e) the availability of adequate technical, financial, and other resources
to complete the development and to use or sell the intangible asset;
f) its ability to measure reliably the expenditure attributable to the
intangible asset during its development.
Amortisation
Intangible assets are amortised on a straight-line basis over their expected
useful economic lives, which are as follows:
Computer software licenses 5 years
Capitalised development costs 3 years
Amortisation on all intangible assets is charged to administrative expenses.
Impairment of property, plant and equipment, right-of-use assets, and
intangible assets
At each balance sheet date, the Group reviews the carrying amount of its
property, plant and equipment and intangible assets for any indication that
those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated to determine the extent of
the impairment loss, if any. Intangible assets not available for use are
tested for impairment on at least an annual basis. The recoverable amount is
the higher of the fair value less costs to sell and value in use. Cash flows
for the determination of value in use are derived from either the incremental
contribution attributable to the specific assets or from cost savings arising
from the use of the specific assets.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and bank deposits available on
demand.
Contract assets
Contract costs comprise directly attributable external costs incurred in
fulfilling customer contracts that relate to incomplete market research
projects. The Group assesses at each balance sheet date whether there is
objective evidence that contract cost assets are impaired, and provision is
made when there is evidence that the Group will not be able to recover all
costs incurred under the terms of the customer contract.
Income taxes
Current income tax liabilities comprise those obligations to fiscal
authorities relating to the current or prior reporting period, which are
unpaid at the balance sheet date. They are calculated according to the tax
rates and tax laws that have been enacted or substantively enacted at the
reporting date applicable to the fiscal periods to which they relate, based on
the taxable profit for the year.
All changes to current tax assets or liabilities are recognised as a component
of tax expense in the income statement, except where they relate to items
charged or credited to other comprehensive income or directly to equity.
Deferred income taxes are calculated using the liability method on temporary
differences. This involves the comparison of the carrying amounts of assets
and liabilities in the consolidated financial statements with their respective
tax bases. In addition, tax losses available to be carried forward as well as
other income tax credits to the Group are assessed for recognition as deferred
tax assets, by reference to the probable recovery of those losses against
future taxable profits.
Deferred tax liabilities are always provided for in full. Deferred tax assets
are recognised to the extent that it is probable that the underlying
deductible temporary differences will be able to be offset against future
taxable income. Deferred tax assets and liabilities are calculated, without
discounting, at tax rates that are expected to apply to their respective
period of realisation, provided they are enacted or substantively enacted at
the balance sheet date. Deferred tax is recognised as a component of tax
expense in the income statement, except where it relates to items charged or
credited to other comprehensive income or directly to equity.
Revenue recognition
The Group's revenues are primarily derived from the delivery of research
services. Revenue from the Group's research product lines (Platform Revenues
and Other Consultancy services) arise from contracts with customers within the
scope of IFRS 15 'Revenue from Contracts with Customers' and are recognised on
the same basis, as set out below.
Revenue is recognised at a point in time (rather than over time) as the key
performance obligation is the delivery of the final written debrief to the
customer. The only exception to this is where subscriptions are sold for
access to our Test Your Ad database, where revenue is recognised on a
straight-line basis across the period of the subscription.
Revenue is recognised only after the results or final written debrief has been
delivered to the customer, except on the rare occasion that a large project
straddles a financial period end, and that project can be sub-divided into
separate discrete deliverables; in such circumstances revenue is recognised on
delivery of each separate deliverable, and the transaction price is allocated
across the discrete performance obligations by reference to the standalone
price for the separate services. Where a contract with a customer requires a
purchase order, signed schedule of work or similar document to evidence the
right to consideration, revenue is not recognised until the Group receives
these documents.
There are no elements of variable consideration in the contracts entered into
by the Group. Revenue is measured by reference to the fair value of
consideration receivable, excluding sales taxes, discounts and volume rebates.
Other operating income
On 27 September 2021, the Company filed a complaint for trademark
infringement, unfair competition and deceptive trade practices at the United
States District Court Southern District of New York against System1 LLC
("LLC"), since renamed System1 Inc., an omnichannel customer acquisition
marketing provider, over their infringing use of the mark "SYSTEM1". On 30
June 2023 the Company announced that a settlement had been reached with LLC.
The parties signed a global agreement which governs the co-existence of their
respective use of the "System1" mark in connection with their operations. As
part of this agreement, the Company was receiving a fixed undisclosed payment
payable in instalments. The final instalment due to the Company was received
in November 2024. Amounts received under this arrangement are included within
other income.
Cost of sales
Cost of sales includes external costs attributable to customer projects. For
the research business, these include respondent sample, data processing,
language translation and similar costs.
Employee benefits
All accumulating employee-compensated absences that are unused at the balance
sheet date are recognised as a liability. The Group operates several defined
contribution pension plans. The Group pays contributions to these plans based
upon the contractual terms agreed with each employee.
The Group has no further payment obligations once the contributions have been
paid. The contributions are recognised as employee benefit expense when they
are due, and any outstanding amounts due at the reporting date are recognised
within accruals.
Share-based payment transactions
The Group issues equity-settled share-based compensation to certain employees
(including directors). Equity-settled share-based payments are measured at
fair value at the date of grant. The fair value determined at the grant date
of the equity-settled share-based payment is expensed on a straight-line basis
over the vesting period, together with a corresponding increase in equity,
based upon the Group's estimate of the shares that will eventually vest.
Apart from market-based elements of awards, these estimates are subsequently
revised if there is any indication that the number of options expected to vest
differs from previous estimates. Any cumulative adjustment prior to vesting is
recognised in the current period. No adjustment is made to any expense
recognised in prior periods. The fair value of option awards with time vesting
performance conditions are measured at the date of grant using a Black-Scholes
based Option Valuation model. The expected life used in the model has been
adjusted, based on management's best estimate, for the effects of
non-transferability, exercise restrictions and behavioural considerations.
The fair value of awards made with market-based performance conditions (for
example, the entity's share price) are measured at the grant date using a
Monte Carlo simulation method incorporating the market conditions in the
calculations. The awards made in respect of the Group's long-term incentive
scheme have been measured using such a method. At the end of each reporting
period, an assessment is made in respect of any non-market conditions with
regard to likely vesting, and the estimate is adjusted prospectively as
required.
Social security contributions payable in connection with the grant of share
options are considered integral to the grant itself, and the charge is treated
as a cash-settled transaction.
Earnings per share
Basic EPS is calculated by dividing the profit or loss attributable to
ordinary shareholders of the company by the weighted average number of
ordinary shares outstanding during the period.
Diluted EPS is determined by adjusting the profit or loss attributable to
ordinary shareholders and the weighted average number of ordinary shares
outstanding, for the effects of all dilutive potential ordinary shares.
Provisions
Provisions for sabbatical leave and dilapidations are recognised when:
a) the Group has a legal or constructive obligation because of past
events;
b) it is probable that an outflow of resources will be required to settle
the obligation; and
c) the amount has been reliably estimated. Where material, the increase in
provisions due to passage of time is recognised as interest expense. The
provision for sabbatical leave is measured using the projected unit credit
method. The provision for dilapidations is measured at the present value of
expenditures expected to be required to settle those obligations.
During the year ended 31 March 2024, the Company ceased to operate the
sabbatical provision in its entirety, with no previously eligible individuals
entitled to any further paid leave under the scheme or any alternate
compensation. Accordingly, the provision was released in full.
Foreign currencies
Transactions in foreign currencies are translated into the functional currency
at the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses arising from the settlement of such transactions and
from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the Income
Statement.
The results and financial position of all Group companies that have a
functional currency different from the presentation currency are translated
into the presentation currency as follows:
a) assets and liabilities for each balance sheet presented are translated
at the closing rate at the balance sheet date;
b) income and expenses for each income statement are translated at average
exchange rates; and
c) all resulting exchange differences are recognised as a separate
component of equity.
On consolidation, exchange differences arising from the translation of the net
investment in foreign operations are recognised in other comprehensive income.
When a foreign operation is partially disposed of or sold, exchange
differences that were recorded in equity are recognised in the income
statement as part of the gain or loss on sale.
Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the main decision-making body of the Company and Group,
which collectively comprises the Executive Directors. The Executive Directors
are responsible for allocating resources and assessing performance of the
operating segments.
Financial instruments
Financial assets
The Group's financial assets comprise trade and other receivables held at
amortised cost. The Group does not possess assets held at fair value through
profit or loss. The classification is determined by management at initial
recognition, being dependent upon the business model and the contractual cash
flows of the assets.
Financial assets are derecognised when the rights to receive cash flows from
the investments have expired or have been transferred and the Group has
transferred substantially all risks and rewards of ownership. Financial assets
arising from contracts with customers are separately presented in accordance
with IFRS 15 in the Consolidated Balance Sheet.
Trade and other receivables
Trade and other receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. The Group's
amortised cost financial assets comprise trade and other receivables and cash
and cash equivalents in the Consolidated Balance Sheet.
Trade receivables are initially recorded at fair value, but subsequently at
amortised cost using the effective interest rate method. In accordance with
IFRS 9, the Group assesses on a forward-looking basis the expected credit
losses associated with its financial assets at amortised cost. The Group
applies the simplified model to recognise lifetime expected credit losses for
its trade and other receivables by making an accounting policy election. The
Group assesses expected credit losses based on the ageing of the receivable,
the Group's historical experience adjusted for forward looking information,
and informed credit assessment. The amount of the write-down is determined as
the difference between the asset's carrying amount and the present value of
estimated future cash flows.
Financial liabilities
Financial liabilities are initially recognised at fair value, net of
transaction costs, and subsequently carried at amortised cost using the
effective interest rate method. Financial liabilities arising from contracts
with customers are separately presented in accordance with IFRS 15 in the
Consolidated Balance Sheet. Financial liabilities and equity instruments are
classified according to the substance of the contractual arrangements entered.
An equity instrument is any contract that evidences a residual interest in the
assets of the entity after deducting all its financial liabilities.
Where the contractual obligations of financial instruments (including share
capital) are equivalent to a similar debt instrument, those financial
instruments are classed as financial liabilities.
Financial liabilities are presented as such in the Consolidated Balance Sheet.
Finance costs and gains or losses relating to financial liabilities are
included in the income statement.
Finance costs are calculated to produce a constant rate of return on the
outstanding liability. Where the contractual terms of share capital do not
have any terms meeting the definition of a financial liability then this is
classed as an equity instrument. Dividends and distributions relating to
equity instruments are debited directly to equity.
Accrued income and contract liabilities
Accrued income is recognised when a performance obligation has been satisfied
but has not yet been billed. Accrued income is transferred to receivables when
the right to consideration is unconditional and billed per the terms of the
contractual agreement. The Group is generally paid in arrears for its services
and invoices are typically payable within 120 days. In certain cases, payments
are received from customers prior to satisfaction of performance obligations
and recognised as deferred income. These balances are considered contract
liabilities. There is no significant passage of time between the receipt of
funds from a customer and the delivery of services, or between the delivery of
services to a customer and the receipt of funds when payment is in arrears.
The Group does not enter contractual arrangements with significant financing
components.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease
liability is initially recognised at the present value of the lease payments
to be made over the term of the lease, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the
consolidated entity's incremental borrowing rate. Lease payments comprise of
fixed payments less any lease incentives receivable, variable lease payments
that depend on an index or a rate, amounts expected to be paid under residual
value guarantees, exercise price of a purchase option when the exercise of the
option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a
rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest
method. The carrying amounts are remeasured if there is a change in the
following: future lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase option and
termination penalties. When a lease liability is remeasured, an adjustment is
made to the corresponding right-of use asset, or to profit or loss if the
carrying amount of the right-of-use asset is fully written down.
Share capital
Ordinary shares are classified as equity. Equity instruments issued by the
Company are recorded at the proceeds received, net of direct issue costs.
Share premium
Share premium represents the excess over nominal value of the fair value of
consideration received for equity shares, net of direct expenses of the share
issue.
Merger reserve
The merger reserve represents the difference between the parent company's cost
of investment and a subsidiary's share capital and share premium. The merger
reserve in these accounts has arisen from a group reconstruction upon the
incorporation and listing of the parent company that was accounted for as a
common control transaction.
Common control transactions are accounted for using merger accounting rather
than the acquisition method, where this reflects the substance of the
transaction.
Foreign currency translation reserve
The foreign currency translation reserve represents the differences arising
from translation of investments in overseas subsidiaries.
Treasury shares
Where the Company purchases the Company's equity share capital, the
consideration paid is deducted from the total shareholders' equity and
classified as treasury shares until they are cancelled. Where such shares are
subsequently sold or re-issued, any consideration received is included in
total shareholders' equity. No gain or loss is recognised on the purchase,
sale, issue, or cancellation of the Company's own equity instruments.
Significant accounting estimates and judgements
The preparation of the consolidated financial statements requires the
Directors and management to make judgements and estimates in respect of
certain items where the choice of accounting policy and assumptions applied in
determining the judgement or estimate could materially affect the Group's
financial position or results at the reporting date.
Capitalisation of development costs - judgement
The point at which development costs meet the criteria for capitalisation is
critically dependent on management's judgement of the point at which technical
feasibility is demonstrable. Furthermore, the useful economic lives of
capitalised development costs are based on management's knowledge of the life
cycle of the Group's products and technology. The carrying value of
development assets also depends on management's ability to demonstrate the
future economic benefits they will deliver. This judgement requires
assumptions about factors outside the business's control such as short and
medium-term economic conditions, technological developments and market
changes. Details are contained in note 7.
Impairment of development costs - judgement and estimate
The Group tests annually whether intangible assets, have been impaired by
reference to expected future generation of cash from the relevant platforms
incorporating the technologies and methodologies developed. In estimating the
cash flows the capitalised development costs may generate the directors make
judgements, based on budgets and forecasts, about the amount of future profits
from the relevant products that will be generated and the timing of when these
will be realised. Furthermore, where new technology is acquired through an
acquisition, management consider the impact this could have on the carrying
value of existing technology, that is similar in nature, when preparing the
budgets and forecasts. The Group has carried out an impairment review and
determined no impairment is required in the year ended 31 March 2025 (31 March
2024: £nil). Details are contained in note 7.
Share-based payments - judgement and estimate
The fair value of options granted under the long-term incentive scheme is
determined using Monte Carlo simulation models. The models require several
estimates and assumptions. The significant inputs into the models are share
price at grant date, exercise price, historic exercise multiples, expected
volatility and the risk-free rate. Volatility is measured at the standard
deviation of expected share price returns based on statistical analysis of
historical share prices. These inputs are provided in Note 12.
In previous years, the Company has sometimes purchased shares arising from the
exercise of share options to minimise shareholder dilution and create
shareholder value. IFRS 2 does not provide guidance on the application of
'substance over form' when evaluating whether a share-based payment should be
accounted for as equity or cash settled.
To determine whether the Company's share options are equity or cash-settled,
consideration needs to be given as to whether the settlement of the share
options through the issue and subsequent repurchase of treasury shares should
be treated as one transaction or as two distinct transactions, and whether the
Company has an obligation to settle in cash.
The Company does not publicise to option holders that option shares may be
repurchased, the decision to repurchase option shares is only made at the
point of option exercise, and there is no contractual or other obligation to
settle in cash. Therefore, it is appropriate to treat the exercise of options
and repurchase of option shares as two separate transactions and account for
the option exercise as equity-settled rather than cash-settled.
In the past the Company has on occasion cash-settled part of long-term
incentive plan equity awards. Despite the repurchase of these equity interests
the Company did not have an obligation to do so and does not have an
obligation, constructive or otherwise to do so in the future. As a result, the
Company continues to account for share-based payments related to its long-term
incentive plans as equity rather than cash-settled.
The 2021 LTIP is subject to Revenue, Profit After Tax and the Company's share
price exceeding certain targets; the full details of which are given in the
Company's Remuneration Report. The measure of the share-based payment charge
is dependent on the estimates made in respect of the probability of those
targets being achieved over the vesting period of the options. The key inputs
into those estimates are the Company's forecasts, revenue volatility and
inflation. Revenue volatility is determined by reference to the share price
volatility used to determine the fair value of the options (with an assumption
that the two will have a high level of correlation). Inflation is determined
by reference to the Bank of England data for the UK. Non-market vesting
conditions are assessed by reference to the Group's latest forecasts. The
final measurement date for the Revenue, Profit After Tax and Company's share
price under the 2021 LTIP was 31 March 2025. As the Company did not meet the
required targets in FY25, the non-market performance conditions have not been
satisfied within the specified time-period and all accumulated charges have
been released in full to the income statement (a credit of £126,000). All
outstanding options under the 2021 LTIP lapsed upon the publication of these
financial statements.
On 18 July 2024, the Committee granted 30,103 nil-costs share options to James
Gregory. These awards will vest on 17 July 2026 if he remains in office at
that time and are subject to no other performance conditions.
Leases - estimate and judgement
Management exercises judgement in determining the likelihood of exercising
break or extension options in determining the lease term, and reviews this on
a lease-by-lease basis.
The discount rate used to calculate the lease liability is the rate implicit
in the lease, if it can be readily determined, or the lessee's incremental
borrowing rate if not. Incremental borrowing rates are determined based on the
term, country, currency and start date of the lease, to derive the rate of
interest that the lessee would have to pay to borrow over a similar term, and
with a similar security, the funds necessary to obtain an asset of a similar
value to the right-of-use asset in a similar economic environment. Details of
lease liabilities can be found in note 15.
5. Segment information
The financial performance of the Group's geographic operating units
("Reportable Segments") is set out below. The Group defines its Consultancy
business as a Research and Advertising Agency.
2025 2024
Revenue Revenue
£'000 £'000
By location of customer
USA 12,829 8,625
LatAm 2,577 2,446
United Kingdom 16,217 12,694
Rest of Europe 3,964 4,815
APAC 1,839 1,439
37,426 30,019
*Segmental revenue is revenue generated from external customers and so
excludes intercompany revenue and is attributable to geographical areas based
upon the location in which the service is delivered.
2025 2024
Revenue Revenue
£'000 £'000
By product type
Predict Your (data) 28,116 19,776
Improve Your (data-led consultancy) 6,441 5,005
Standard (platform) revenue 34,557 24,781
Other consultancy (non-platform) 2,869 5,238
Total revenue 37,426 30,019
By product group
Communications (Ad Testing) 31,482 22,775
Brand (Brand Tracking) 3,069 3,178
Innovation 2,875 4,066
37,426 30,019
Consolidated balance sheet information is regularly provided to the Executive
Directors while segment balance sheet information is not. Accordingly, the
Company does not disclose segmental balance sheet information here.
The Company is domiciled in the UK, its consolidated non-current assets, other
than financial instruments and deferred tax assets are as follows:
2025 2024
£'000 £'000
Non-current assets
United Kingdom 1,697 1,643
Rest of world 195 160
1,892 1,803
6. Property, plant, and equipment
Right-of-use assets Furniture Computer hardware Total
and fixtures
£'000 £'000 £'000 £'000
Cost at 1 April 2023 1,244 11 206 1,461
Additions 175 - 97 272
Disposals (1,245) (11) - (1,256)
Foreign exchange (2) - - (2)
Cost at 31 March 2024 172 - 303 475
Depreciation at 1 April 2023 466 10 172 648
Depreciation charge for the year 645 1 56 702
Disposals (1,089) (11) - (1,100)
Foreign exchange 2 - (2) -
Depreciation at 31 March 2024 24 - 226 250
Carrying amount 31 March 2024 148 - 77 225
Cost at 1 April 2024 172 - 303 475
Additions 955 - 127 1,082
Disposals (102) - - (102)
Foreign exchange (27) - (1) (28)
Cost at 31 March 2025 998 - 429 1,427
Depreciation at 1 April 2024 24 - 226 250
Depreciation charge for the year 500 - 84 584
Disposals (51) - - (51)
Foreign exchange 9 - (3) 6
Depreciation at 31 March 2025 482 - 307 789
Carrying amount 31 March 2025 516 - 122 638
Depreciation charges are included within administrative expenses.
7. Intangible assets
Development costs Software Total
£'000 £'000 £'000
Cost at 1 April 2023 1,225 525 1,750
Additions 736 - 736
Cost at 31 March 2024 1,961 525 2,486
Amortisation at 1 April 2023 101 253 354
Amortisation for the year 423 131 554
Amortisation at 31 March 2024 524 384 908
Carrying value at 31 March 2024 1,437 141 1,578
Cost at 1 April 2024 1,961 525 2,486
Additions 468 - 468
Cost at 31 March 2025 2,429 525 2,954
Amortisation at 1 April 2024 524 384 908
Amortisation for the year 653 139 792
Amortisation at 31 March 2025 1,177 523 1,700
Carrying value at 31 March 2025 1,252 2 1,254
Amortisation charges are included within administrative expenses.
The only software cost as at 31 March 2025 is the Group's finance and
operations system that was brought into use October 2020.
Development costs relate to costs capitalised for the development of the
following:
· "Test Your" platform, which underpins the delivery of our data
and data led consultancy product suite and was completed during the year ended
31 March 2023. The carrying value at 31 March 2025 was £205k (2024: £464k)
· Supply Chain Automation platform which enables System1 to
interface (via API) with multiple suppliers of panel respondents and was
substantially completed at 31 March 2024. The carrying value at 31 March 2025
was £724k (2024: £930k)
· Modular Surveys which facilitates the automation of custom
products and was completed in two phases in the year ended 31 March 2025. The
carrying value at 31 March 2025 was £178k (2024: £nil)
· Boost, which optimises our methodology for sourcing sample
respondents, and is ongoing at 31 March 2025, anticipated to complete in H1
FY2026. The carrying value at 31 March 2025 is £145k (2024: £nil)
Development costs in respect of completed projects are tested for impairment
where impairment indicators exist. No indicators exist at 31 March 2025 (31
March 2024: none). Development costs in respect of ongoing projects are tested
for impairment at each reporting date. The carrying value of the assets in
each case are assigned to their respective cash generating units for the
purposes of assessing future cashflows. The principal assumptions used in the
forecasts were the timing and amount of future revenues and cost savings,
which were derived from the latest forecasts approved by the Board. Following
the assessment, the Board have determined that no impairment of assets is
required as at 31 March 2025 (31 March 2024: £nil). The headroom in the
impairment review exceeds the carrying value of the asset.
8. Financial risk management
The Group's financial risk management policies and objectives are explained in
the Group Directors' report.
Credit risk
The Group reviews and manages credit risk, arising from trade receivables and
cash and cash equivalents, on a consolidated basis. The vast majority of the
Group's customers are large blue-chip organisations, and the Group has only
ever suffered minimal bad debts. The Group has concentrations of credit risk
as follows.
2025 2024
£'000 £'000
Cash and cash equivalents
HSBC Bank PLC (AA credit rating) 10,647 8,588
Santander 668 828
Deutsche Bank 73 50
UBS 151 144
Other banks 1,332 -
12,871 9,610
Amounts held with other banks represents cash held via the Flagstone deposit
platform, which is used to place short term deposits of three months or less
with multiple banks to access higher interest rate returns on surplus cash.
The distribution of these amounts between financial institutions is designed
to keep exposure to any one organisation within the £85,000 limit of FSCS
Protection.
At 31 March 2025, the Group has cash balances of £38,000 (2024: £40,000)
which are not readily available for use due to ongoing restrictions imposed by
overseas banking institutions. The Group has made full provision against these
balances at the year end.
Market risk - foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk
arising from various currency exposures, primarily with respect to the US
dollar and the Euro. The Group considers foreign exchange risk to be one of
its financial risks and may seek to minimise its effects by using forward
foreign exchange contracts where appropriate. During 2024 and 2025, the Group
did not enter into any forward foreign exchange contracts.
The denominations of the cash and cash equivalents held by the Group were as
follows:
2025 2024
£'000 £'000
Cash and cash equivalents
GBP 4,909 1,076
USD 4,304 4,367
EUR 2,164 2,285
CHF 366 553
AUD 418 496
SGD 128 6
BRL 582 827
12,871 9,610
Financial instruments by category
At the balance sheet date, the Group held the following financial instruments
by category.
2025 2024
£'000 £'000
Financial assets carried at amortised cost
Finance lease receivables - 85
Trade and other receivables (excluding prepayments) 6,217 6,380
Cash and cash equivalents 12,871 9,610
19,088 16,075
Other financial liabilities carried at amortised cost
Current liabilities
Trade payables 1,256 2,051
Accruals 4,064 3,880
Lease liabilities 526 280
5,846 6,211
Non-current liabilities
Lease liabilities - 66
- 66
On 22 February 2023, the Company entered into an Overdraft Facility with HSBC.
The facility of up to £1,500,000 is secured over the Company's trade
receivables, and incurs interest at 3% above the Bank of England base rate on
drawn balances. The facility has no fixed end date and can be cancelled by
either party at any time. During the year ended 31 March 2025, the Company has
not drawn any amounts under the facility, and no amounts have been drawn to
the date of the signing of these financial statements (amounts drawn in the
year ended 31 March 2024: £nil).
9. Finance lease receivables
: 2025 2024
£'000 £'000
Amounts receivable under finance leases
Year 1 - 94
Year 2 - -
Total undiscounted lease payments - 94
Unearned finance income - (9)
Net investment in lease - 85
2025 2024
£'000 £'000
Net investment in the lease analysed as:
Recoverable after 12 months - -
Recoverable within 12 months - 85
- 85
Finance lease receivables relate to the sublease of the Group's previous
office in New York, which expired in July 2024. There were no variable
payments within the lease arrangement. At each reporting date the Group
estimates the loss allowance on finance lease receivables. No amounts were
past due at 31 March 2024 or 2025.
10. Trade and other receivables
2025 2024
£'000 £'000
Trade receivables 5,948 6,126
Prepayments and accrued income 639 899
Other receivables 235 236
6,822 7,261
Trade and other receivables are due within one year and are not interest
bearing. The maximum exposure to credit risk at the balance sheet date is the
carrying amount of receivables (detailed in Note 8). The Group does not hold
any collateral as security against trade receivables. The Directors do not
believe that there is a significant concentration of credit risk within the
trade receivables balance.
Impairment of financial assets
The Group has financial assets, primarily trade receivables, which are subject
to the IFRS 9 expected credit loss model, and the Group is required to assess
these assets for expected credit losses. The Group has applied the simplified
approach to measuring expected credit losses as permitted by IFRS 9 and
recognises a loss allowance based on the financial assets' lifetime expected
loss.
The Group assesses on a forward-looking basis the expected credit losses
associated with its debt instruments carried at amortised cost. Trade
receivables are grouped for the purposes of the assessment based on industry
sector, entity size and geography. The Group assesses expected credit losses
based on the ageing of the receivable, the Group's historical experience and
informed credit assessment. Further credit losses are recognised where the
Group has information that indicates it is unlikely to recover balances in
full.
The Group has no financial assets designated as measured at fair value.
As of 31 March 2025, trade receivables of £1,083,000 (2024: £3,937,000) were
past due but not impaired. The ageing of trade receivables, and the associated
loss allowance, is as follows:
Current 0-3 months due 3-6 months due Over 6 months due Total
£'000 £'000 £'000 £'000 £'000
At 31 March 2025
Gross trade receivables 4,917 802 215 153 6,087
Loss provision 52 8 5 74 139
Expected loss rate 1% 1% 2% 48%
At 31 March 2024
Gross trade receivables 2,208 3,540 287 171 6,206
Loss provision 19 38 3 20 80
Expected loss rate 1% 1% 1% 12%
Movements in the impairment allowance for trade receivables are as follows:
2025 2024
£'000 £'000
Provision for impairment of trade receivables
Opening balance 80 176
Charged to the income statement 64 (68)
Utilisations and other movements (5) (28)
139 80
As of 31 March 2025, no other receivables or contract costs were impaired
(2024: £Nil).
The carrying amount of the Group's trade and other receivables are denominated
in the following currencies.
2025 2024
£'000 £'000
United States dollar 1,998 1,924
British sterling 3,213 3,990
Euro 776 547
Brazilian real 385 240
Swiss franc 132 231
Australian dollar 162 152
Singapore dollar 156 177
6,822 7,261
11. Share capital
The share capital of System1 Group PLC consists only of fully paid Ordinary
Shares ("Shares") with a par value of one penny each. All Shares are equally
eligible to receive dividends and the repayment of capital and represent one
vote at the Annual General Meeting.
2025 2024
No. £'000 No. £'000
Allotted, called up, and fully paid ordinary shares 13,226,773 132 13,226,773 132
At 1 April and at 31 March
The Company has treasury shares to satisfy the requirements of the Group's
share incentive schemes. The movement in the Company's treasury shares balance
is as follows:
2025 2024
Treasury shares Weighted average exercise price per share Treasury shares Weighted average exercise price per share
No. Pence No. Pence
Shares held by Treasury
At 1 April 547,844 547,844
Transfer of shares to satisfy options exercise (10,144) - - -
At 31 March 537,700 547,844
Share options
Employee share option scheme
The Group issues share options to directors and senior managers under an HM
Revenue and Customs approved Enterprise Management Incentive (EMI) scheme and
under an unapproved scheme.
Options granted in more recent years have been awarded in accordance with
management long-term incentive plans and such options have a zero-exercise
price and are subject to performance criteria. If share options remain
unexercised after a period of ten years from the date of grant, the options
expire. Share options are forfeited in some circumstances if the employee
leaves the Group before the options vest, unless otherwise agreed by the
Remuneration Committee of the Board.
Movements in the number of share options outstanding and their related
weighted average exercise prices are as follows:
2025 2024
Options Weighted average exercise price per share Options Weighted average exercise price per share
No. Pence No. Pence
Share options outstanding
Opening balance 1,253,724 - 1,260,724 0.7
Granted 52,148 - - -
Lapsed (65,626) - (7,000) -
Exercised (10,144) - - -
Closing balance 1,230,102 - 1,253,724 -
Exercisable at year-end - 0.0 10,144 0.0
Weighted average share price at date of options exercised (pence) 445.0 NA
Weighted average fair value of options granted in the year (pence) 313.2 NA
The Group had the following outstanding options and exercise prices:
2025 2024
Expiry date Options Weighted average exercise price per share Weighted average remaining contractual life Options Weighted average exercise price per share Weighted average remaining contractual life
No. Pence Months No. Pence Months
2024 - - - 57,139 - 3.6
2025 46,995 - 4.0 - - -
2027 1,153,004 - 23.7 1,196,585 - 29.8
2028 - - - - - -
2029 30,103 - 50.9 - - -
2032 - - - - - -
1,230,102 - 23.6 1,253,724 0.0 28.6
Long-term incentive scheme
The Company introduced the current 2021 LTIP in October 2021. The 2021 LTIP
was implemented in October 2021 as a modification to the 2019 LTIP. The 2021
LTIP options vest between 12 August 2022 and 12 August 2025, subject to
Revenue, Profit After Tax and the Company's share price exceeding certain
targets. The full details of which are given in the Company's Remuneration
Report. The final vesting date of the 2021 LTIP is 12 August 2025, with the
exercise period ending on 21 March 2027.
The final measurement date for the Revenue, Profit After Tax and Company's
share price under the 2021 LTIP was 31 March 2025. As the Company did not meet
the required targets in FY25, the non-market performance conditions have not
been satisfied within the specified time-period and all accumulated charges
have been released in full to the income statement (a credit of £126,000).
All outstanding options under the 2021 LTIP lapsed upon the publication of
these financial statements.
The number of options outstanding under the replaced 2019 LTIP scheme is nil
(31 March 2024: 54,180).
At 31 March 2025, the number of options granted under the 2021 LTIP reached
1,153,004 or 9.1% of issued ordinary share capital of maximum capacity at 10%
(2024: 1,130,959 or 8.6% of issued ordinary share capital).
The key inputs into the fair value measurement of the 198,401 options granted
in the year ended 31 March 2023 are as follows:
· Expected Life: 2 years and 7.5 months
· Exercise price: £Nil
· Share price at date of grant: £1.45
· Expected volatility: 53.52%
· Risk free rate: 3.51%
On 18 July 2024, the Committee granted 30,103 nil-costs share options to James
Gregory under a new Executive option scheme. These awards will vest on 17
July 2026 if he remains in office at that time and are subject to no other
performance conditions.
The key inputs into the fair value measurement of the 30,103 options granted
in the year ended 31 March 2025 are as follows:
· Expected Life: 3 years
· Exercise price: £Nil
· Share price at date of grant: £5.43
· Expected volatility: 55.00%
· Risk free rate: 4.24%
Non-employee option plan
On 17 April 2019, the Company granted Stefan Barden who was then an advisor to
the Board, an equity award comprising 300,000 zero cost options. In the year
ended 31 March 2022, the plan was modified to reflect the same targets as the
2021 LTIP scheme. As at 31 March 2025, Stefan Barden retained 46,995 of his
options, with the remaining 253,005 options cancelled following his
resignation in 2022.
Share-based payment charge
The total credit relating to equity-settled share-based payment plans was
£64,000 (2024: £nil); as a consequence of management's assessment that the
probability of non-market performance conditions attached to the 2021 LTIP
being fulfilled is negligible (a credit of £126,000) and the charges
associated with the Executive Option Scheme. The associated credit for social
security was £21,000. (2024: £nil).
12. Provisions
Sabbatical Leasehold dilapidations Total
£'000 £'000 £'000
At 1 April 2023 419 35 454
Provided in the year 81 - 81
Utilised in the year (52) - (52)
Reversals of unused amounts (446) (28) (474)
Foreign exchange movement (2) (1) (3)
At 31 March 2024 - 6 6
Provided in the year - - -
Utilised in the year - - -
Reversals of unused amounts - (4) (4)
Foreign exchange movement - (2) (2)
At 31 March 2025 - - -
Due within one year - - -
Due after one year - - -
The Company historically operated a sabbatical leave scheme, which provided 20
days paid leave for each successive period of six years' service. There was no
proportional entitlement for shorter periods of service. During the year ended
31 March 2023, the Company modified the terms of the scheme such that rather
than being open to all employees, the scheme was only available to those
individuals who had accrued three or more years of unbroken service as at 30
September 2022. During the year ended 31 March 2024, the Company ceased to
operate the sabbatical provision in its entirety, with no previously eligible
individuals entitled to any further paid leave under the scheme or any
alternate compensation. Accordingly, the provision was released in full.
Dilapidation provisions represent the Group's best estimate of costs required
to meet its obligations under property lease agreements.
13. Trade and other payables
2025 2024
£'000 £'000
Trade payables 1,256 2,051
Social security and other taxes 634 632
Accruals 4,064 3,880
5,954 6,563
Trade and other payables are due within one year and are not interest bearing.
The contractual terms for the payment of trade payables are generally 30-45
days from receipt of invoice.
The contractual maturity of all trade and other payables is within one year of
the balance sheet date.
14. Contract liabilities
2025 2024
£'000 £'000
Contract liabilities 758 1,137
From time to time, payments are received from customers prior to work being
completed. Such payments are recorded in the balance sheet as contract
liabilities.
Included within Revenue is £1,072,000 relating to contract liabilities
recognised at 1 April 2024 (2024: £536,000). No revenue has been recognised
in the year from performance conditions satisfied, or partially satisfied in
previous periods.
15. Borrowings
The analysis of the maturity of lease liabilities is as follows:
2025 2024
£'000 £'000
Within one year 535 291
Later than 1 but no later than 5 years - 68
More than 5 years - -
Total contractual undiscounted cashflows 535 359
Impact of discounting (9) (13)
Total lease liabilities 526 346
Lease liabilities are presented in the Consolidated Balance Sheet as follows:
2025 2024
£'000 £'000
Within one year 526 280
Later than 1 but no later than 5 years - 66
More than 5 years - -
526 346
There are no contingent payments, purchase options or restrictive covenants in
respect of property leases. Details of loan facilities and balances are given
in note 9.
16. Expenses by nature
2025 2024
£'000 £'000
Employee benefit expense* 18,514 15,712
Other research and development costs 1,306 1,302
Capitalised development costs - gross of amortisation (468) (736)
Depreciation, amortisation, and impairment 1,376 1,249
Net foreign exchange (gains)/losses 337 204
Lease expense related to short term leases 92 195
Third party direct costs (sample, translation, data processing) 4,565 3,898
Indirect delivery costs 959 858
Other expenses 5,859 4,650
32,540 27,332
*Included within employee benefit expense is £1,881,000 of costs related to
staff involved in research and development activities (2024: £1,811,000)
which has not been capitalised under IAS 38.
Analysed as:
Cost of sales 4,565 3,898
Administrative expenses 27,975 23,434
32,540 27,332
17. Other income
2025 2024
£'000 £'000
Other income 381 413
381 413
Other operating income includes amounts in relation to the trademark
co-existence agreement. See note 4 for further details.
18. Auditor Remuneration
2024 2024
£'000 £'000
Audit of parent company and consolidated accounts 126 110
Audit-related assurance services 10 -
136 110
19. Employee benefit expense
2025 2024
£'000 £'000
Employee benefit expenses (including directors) comprise:
Wages and salaries 15,170 13,327
Social security contributions and similar taxes 2,114 1,788
Defined contribution pension cost 524 453
Long service leave cost - sabbatical provision - (417)
Share-based payment expense (85) -
Compensation for loss of office 223 87
Medical benefits 568 474
18,514 15,712
Key management personnel are those persons having authority and responsibility
for planning, directing, and controlling the activities of the Group,
including the 3 (2024: 3) Executive Directors of the company. Details of
directors' emoluments are given in the Remuneration Report on pages 56 and 57.
Compensation to key management is set out as follows:
2025 2024
£'000 £'000
Salaries and benefits in kind 883 871
Bonus 584 474
Social security contributions 203 175
Defined contribution pension cost 30 28
Share-based payment (credit)/expense 62 41
1,762 1,589
The average number of full-time equivalent staff employed by the Group during
the financial year was as follows:
2025 2024
No. No.
Sales and marketing 59 46
Operations 52 44
IT 30 31
Administration 26 23
167 144
20. Finance charges
2025 2024
£'000 £'000
Interest on finance lease receivables 1 8
Interest on bank deposits 61 36
Finance income 62 44
2025 2024
£'000 £'000
Interest on bank loans - -
Other net interest payable - (1)
Interest on lease liabilities (26) (34)
(26) (35)
Net finance income/(expense) 36 9
21. Income tax expense
2025 2024
£'000 £'000
Current tax 860 1,023
Deferred tax (30) 51
830 1,074
Income tax expense for the year differs from the standard rate of taxation as
follows:
2025 2024
£'000 £'000
Profit on ordinary activities before taxation 5,303 3,109
Profit on ordinary activities multiplied by standard UK tax rate 1,326 777
Difference between tax rates applied to Group's subsidiaries 110 243
Net expenses not deductible for tax purposes 409 57
Adjustments to trading losses and brought forward values (313) (3)
R&D claims surrendered for loss relief (754) -
Remeasurement of deferred tax for change in tax rates 5 (7)
Tax on intra-group management charges (Brazil) 222 256
Receipt of research and development credits - (210)
Adjustment to current tax in respect of prior years (30) (21)
Adjustments to foreign and withholding tax (81) 120
Adjustments to deferred tax in respect of prior and current years (64) (136)
830 1,076
The standard tax rate for the years ended 31 March 2025 was 25% (31 March
2024: 25%).
The tax charge for the year includes claims in respect of R&D expenditure
for the years 2023 and 2024 which have been surrendered for tax losses of
£750,000 that have been group relieved in the period. Excluding these losses,
the effective tax rate for the Group would have been in the region of 30%.
22. Deferred tax
Deferred tax assets and liabilities are as follows.
2025 2024
£'000 £'000
Deferred tax assets:
- Deferred tax assets to be recovered after more than 12 months 81 37
- Deferred tax assets to be recovered within 12 months 271 155
352 192
Deferred tax liabilities:
- Deferred tax liability to be Incurred within 12 months (158) (41)
Deferred tax asset (net): 194 151
The gross movement in deferred tax is as follows.
2025 2024
£'000 £'000
Opening balance 151 203
Income statement credit/(charge) 30 (51)
Foreign exchange movements (2) (1)
Tax credited directly to equity 15
Closing balance 194 151
The movement in deferred income tax assets and liabilities during the year,
without taking into consideration the offsetting of balances within the same
tax jurisdiction, is as follows:
Deferred tax assets Other provisions Share options Dilapidation provisions Trading losses Accelerated capital allowances Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2024 171 19 2 - - 192
Credited/(charged) to income statement 117 12 (2) 18 145
-
Credited to equity - 15 - - - 15
At 31 March 2025 288 46 - 18 - 352
Deferred tax liabilities Accelerated capital allowances
£'000
At 1 April 2024 (41)
Charged to income statement (117)
At 31 March 2025 (158)
Deferred tax assets are recognised only to the extent that their
recoverability is considered probable.
The deferred tax asset in respect of the Company's share option plans relates
to corporate tax deductions available on exercise of employee share options.
23. Earnings per share
2025 2024
Profit attributable to equity holders of the Company, in £'000 4,473 2,033
Weighted average number of Ordinary Shares in issue 12,687,461 12,678,929
Basic earnings per share 35.3p 16.0p
Profit attributable to equity holders of the Company, in £'000 4,473 2,033
Weighted average number of Ordinary Shares in issue 12,687,461 12,678,929
Share options 30,103 10,144
Weighted average number of Ordinary Shares for diluted earnings per share 12,717,564 12,689,073
Diluted earnings per share 35.2p 16.0p
Basic earnings per share is calculated by dividing the profit or loss
attributable to equity holders of the Company by the weighted average number
of Ordinary Shares in issue during the year.
Diluted earnings per share is calculated by adjusting the weighted average
number of shares outstanding assuming conversion of all dilutive share options
to Ordinary Shares. Options are included in the determination of diluted
earnings per share if the required performance thresholds would have been met
based on the Group's performance up to the reporting date, and to the extent
that they are dilutive. Accordingly, employee options of 1.2 million (2024:
1.3 million) have not been included in the calculation of diluted EPS because
their exercise is contingent on the satisfaction of certain criteria that had
not been met at 31 March 2025 and 31 March 2024. The total number of options
in issue is disclosed in Note 12.
24. Dividends
The Company paid a final dividend of 5.0p per share for the year ended March
2024 on 18 October 2024 (ex-dividend date 26 September 2024). The Company
proposes to pay an ordinary dividend of 5.5p per share for FY25, and an
additional special dividend of 5.5p per share for the year ended 31 March
2025, which will be put to the Group's annual general meeting in 25 September
2025.
Dividends paid to directors in the years ended 31 March 2025 totalled
£145,659 (31 March 2024: £nil).
25. Net cash generated from operations
2025 2024
£'000 £'000
Profit before taxation 5,302 3,108
Depreciation and impairment of property, plant, and equipment 584 702
Amortisation and impairment of intangible assets 791 553
Loss/(profit) on disposal of right-of-use assets 9 (8)
Interest received (61) (36)
Interest paid 26 35
Share-based payment credit (64) -
(Increase)/decrease in contract assets (25) (78)
Decrease in finance lease receivables 85 263
Increase in trade and other receivables 440 (917)
Increase in trade and other payables (607) 2,863
Increase/(decrease) in contract liabilities (378) 372
Decrease in provisions (4) (445)
Exchange differences on operating items 101 18
6,199 6,430
26. Related party transactions
The following transactions took place between entities within the Group, all
of which are consolidated in these financial statements, and are related
parties by virtue of the common control of the Company.
Overhead charges Royalties Amounts due from/(to) related parties
£'000 £'000 £'000
2025
System1 Group PLC 8,504 3,485 323
System1 Research Limited (3,957) (1,622) 2,369
System1 Research, Inc. (3,131) (1,283) (2,645)
System1 Research B.V. (169) (69) 413
System1 Research Sarl (214) (88) (232)
System1 Research GmbH (428) (176) (652)
System1 Marketing Consulting (Shanghai) Co. Limited - - -
System1 Research Do Brazil Servicos de Marketing Ltda. - - 42
System1 Research France Sarl (156) (64) 280
System1 Market Research Pte Ltd (105) (43) (856)
System1 Research Pty Ltd. (344) (141) 904
System1 Agency Limited - - 54
System1 AdRatings Limited - - -
2024
System1 Group PLC 8,762 2,755 2,135
System1 Research Limited (4,030) (1,267) 424
System1 Research, Inc. (2,743) (862) (1,835)
System1 Research B.V. (177) (56) 315
System1 Research Sarl (407) (128) (501)
System1 Research GmbH (418) (131) (917)
System1 Marketing Consulting (Shanghai) Co. Limited - - -
System1 Research Do Brazil Servicos de Marketing Ltda. - - 54
System1 Research France Sarl (530) (167) 309
System1 Market Research Pte Ltd (123) (39) (511)
System1 Research Pty Ltd. (335) (105) 471
System1 Agency Limited - - 55
System1 AdRatings Limited - - -
During the year, purchases of £80,539 (2024: £136,374) were made from Merit
Data &Technology Limited, a related party by virtue of the common
directorship of Philip Machray. At the year end, an amount of £8,400 was owed
(2024: £16,800). Of the purchases made, £nil was capitalised within
development costs in the year ended 31 March 2025 (2024: £37,000). Purchases
of £2,250 (2024: £nil) were made from Messier Holdings Limited, a related
party by virtue of the common directorship of John Kearon and Rupert Howell.
At the year end, an amount of £nil was owed.
27. Audit exemption
System1 Research Limited (company number 03900547), System1 Agency Limited
(company number 09829202) and System1 Ad Ratings Limited (company number
11313402) are exempt from the requirements of the Companies Act 2006 relating
to the audit of accounts under section 479A. System1 Group PLC has given a
parental guarantee for all entities above under section 479C of the Companies
Act 2006.
28. Post balance sheet events
On 13 May 2025, the Company established the 2025 Long-Term Incentive Plan
("2025 LTIP"). Under the 2025 LTIP the Company has granted nil-cost options
over ordinary shares of 1p each in the Company to members of its executive
team, including two Executive Directors of the Company. Details of the scheme
are given in the Remuneration Report on page 56.
Company Balance Sheet
as at 31 March 2025
Registered Company No. 05940040
2025 2024
Note £'000 £'000
Fixed assets
Intangible assets 2 1,254 1,578
Tangible assets 3 444 65
Investments in subsidiaries 4 581 581
2,279 2,224
Current assets
Debtors due within one year 5 5,828 6,047
Cash and cash equivalents 2,220 1,908
8,048 7,955
Creditors: amounts due within one year 6 7,773 5,889
Net current assets 275 2,066
Total assets less current liabilities 2,554 4,290
Provisions for liabilities 7 105 40
Net assets 2,449 4,250
Capital and reserves
Share capital 9 132 132
Share premium account 1 1,601 1,601
Retained earnings 1 716 2,517
Shareholders' funds 2,449 4,250
As permitted by Section 408 of the Companies Act 2006, the Company's profit
and loss account has not been included in these financial statements. The
Company's loss after tax was £1,244,000 (2024: profit of £62,000).
The notes on pages 107 to 120 are an integral part of these company financial
statements.
These financial statements were approved by the directors on 9 July 2025 and
are signed on their behalf by:
James Gregory Chris Willford
Director
Director
Company Statement of Changes in Equity
for the year ended 31 March 2025
Share capital Share premium Retained earnings Total
£'000 £'000 £'000 £'000
At 1 April 2023 132 1,601 2,705 4,438
Loss for the financial period and total comprehensive income attributable to - - (62) (62)
the equity holders
Transactions with owners:
Employee share option scheme:
- value of employee services - - (126) (126)
- - (126) (126)
At 31 March 2024 132 1,601 2,517 4,250
Loss for the financial period and total comprehensive income attributable to - - (1,244) (1,244)
the equity holders
Transactions with owners:
Employee share option scheme:
- value of employee services - - 62 62
- deferred tax credited to equity 15 15
Dividends paid to owners - - (634) (634)
- - (557) (557)
At 31 March 2025 132 1,601 716 2,449
The notes on pages 107 to 120 are an integral part of these company financial
statements.
Notes to the Company Financial Statements
for the year ended 31 March 2025
1. Accounting policies
Statement of compliance
The separate financial statements of the Company are presented in accordance
with Financial Reporting Standard 101 - 'The Reduced Disclosure Framework'.
They have been prepared under the historical cost convention. The principal
accounting policies adopted in the preparation of these financial statements
are set out below. These policies have been applied consistently throughout
the year.
This Company is included in the consolidated financial statements of System1
Group PLC for the year ended 31 March 2025. These accounts are available from
the registered office address of the Company, and at
system1group.com/investors.
Disclosure exemptions adopted
In preparing these financial statements the Company has taken advantage of all
disclosure exemptions available under FRS 101. Therefore, these financial
statements do not include:
a) a statement of cash flows and related notes;
b) the requirements of IAS 24 Related Party Disclosures to disclose
related party transactions entered between two or more wholly owned members of
the group;
c) disclosure of key management personnel compensation;
d) capital management disclosures;
e) disclosure of leases as required by paragraph 52 of IFRS 16 "Leases"
f) presentation of a comparative reconciliation of the number of shares
outstanding at the beginning and at the end of the period;
g) the effect of future accounting standards not adopted;
h) disclosures in respect of share-based payments
i) disclosures in respect of financial instruments and fair value
measurement.
As permitted by the Companies Act 2006 section 408, the Company does not
present a profit and loss account.
Research and development - internally generated intangible assets
All on-going research expenditure is expensed in the year in which it is
incurred. Where no internally generated intangible asset can be recognised,
development expenditure is charged to administrative expenses in the period in
which it is incurred.
Costs relating to the research phase of the product, amounting to £2.7m were
expensed in the year to 31 March 2025 (31 March 2024: £2.4m). Development
costs include professional fees and directly attributable employee costs
required to bring the software into working condition.
Furthermore, internally generated software and product development costs are
recognised as an intangible asset only if the Company can demonstrate all the
following conditions:
a) the technical feasibility of completing the intangible asset so that it
will be available for use or sale;
b) its intention to complete the intangible asset and use or sell it;
c) its ability to use or sell the intangible asset;
d) how the intangible asset will generate probable future economic
benefits; among other things, the Company can demonstrate the existence of a
market for the output of the intangible asset or the intangible asset itself
or, if it is to be used internally, the usefulness of the intangible asset;
e) the availability of adequate technical, financial and other resources
to complete the development and to use or sell the intangible asset;
f) its ability to measure reliably the expenditure attributable to the
intangible asset during its development.
Amortisation
Acquired computer software licences are amortised on a straight-line basis
over their estimated useful economic life of five years.
Capitalised development costs are amortised on a straight-line basis over
their estimated useful economic life of three years.
Amortisation and impairment on all intangible assets are charged to
administrative expenses.
Investments
Fixed asset investments comprise investments by the Company in the shares of
subsidiary undertakings. The carrying value of is reviewed for indicators of
impairment on an annual basis. Where such indicators are present, a quantified
impairment test is required and the value in use calculated based upon a
discounted cash flow methodology using the most recent forecasts prepared by
management. No impairment indicators were identified at 31 March 2025 or 31
March 2024.
Tangible assets and right-of-use assets
Property, plant and equipment are stated at historical cost less accumulated
depreciation and accumulated impairment losses. Depreciation is provided to
write off the cost of all property, plant and equipment to its residual value
on a straight-line basis over its expected useful economic lives, which are as
follows:
Furniture, fittings and equipment 5 years
Computer hardware
2 to 3 years
The residual value and useful life of each asset is reviewed and adjusted, if
appropriate, at each balance sheet date. Depreciation is charged to
administrative expenses in the income statement.
Right-of-use assets are measured at cost to include the lease liability,
direct and restoration cost and are generally depreciated over the shorter of
the asset's useful life and the lease term on a straight-line basis. Payments
associated with short term leases of equipment and vehicles and all leases of
low value assets are recognised on a straight-line basis as an expense in the
profit and loss.
Impairment of property, plant and equipment and intangible assets
At each balance sheet date, the Company reviews the carrying amount of its
property, plant and equipment and intangible assets for any indication that
those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated to determine the extent of
the impairment loss, if any. Intangible assets not available for use are
tested for impairment on at least an annual basis. The recoverable amount is
the higher of the fair value less costs to sell and value in use.
Cash at bank
Cash at bank comprises cash in hand and bank deposits available on demand.
Income taxes
Current income tax liabilities comprise those obligations to fiscal
authorities relating to the current or prior reporting period, which are
unpaid at the balance sheet date. They are calculated according to the tax
rates and tax laws that have been enacted or substantively enacted at the
reporting date applicable to the fiscal periods to which they relate, based on
the taxable profit for the year. All changes to current tax assets or
liabilities are recognised as a component of tax expense in the income
statement, except where it relates to items charged or credited to other
comprehensive income or directly to equity.
Deferred income taxes are calculated using the liability method on temporary
differences. This involves the comparison of the carrying amounts of assets
and liabilities in the consolidated financial statements with their respective
tax bases. In addition, tax losses available to be carried forward as well as
other income tax credits to the Company are assessed for recognition as
deferred tax assets.
Deferred tax liabilities are always provided for in full. Deferred tax assets
are recognised to the extent that it is probable that the underlying
deductible temporary differences will be able to be offset against future
taxable income. Deferred tax assets and liabilities are calculated, without
discounting, at tax rates that are expected to apply to their respective
period of realisation, provided they are enacted or substantively enacted at
the balance sheet date. Deferred tax is recognised as a component of tax
expense in the income statement, except where it relates to items charged or
credited to other comprehensive income or directly to equity.
Employee benefits
All accumulating employee-compensated absences that are unused at the balance
sheet date are recognised as a liability.
The Company operates a defined contribution pension plan. The Company pays
contributions to the plan based upon the contractual terms agreed with each
employee. The Company has no further payment obligations once the
contributions have been paid. The contributions are recognised as employee
benefit expense when they are due. Any amounts outstanding at the reporting
date are recognised in liabilities within accruals.
Share-based payments
Equity-settled, share-based payments are measured at fair value at the date
of grant. Equity-settled, share-based payments that are made available
to employees of the Company's subsidiaries are treated as increases in equity
over the vesting period of the award, with a corresponding increase in the
Company's investments in subsidiaries, based on an estimate of the number of
shares that will eventually vest.
Provisions
Provisions are recognised when: the Company has a legal or constructive
obligation because of past events; it is probable that an outflow of resources
will be required to settle the obligation; and the amount has been reliably
estimated. Where material, the increase in provisions due to passage of time
is recognised as interest expense.
The provision for dilapidations is measured at the present value of
expenditures expected to be required to settle those obligations.
Financial instruments
The Company's financial assets comprise trade and other receivables held at
amortised cost. The Company does not possess assets held at fair value through
profit or loss. The classification is determined by management at initial
recognition, being dependent upon the business model and the contractual cash
flows of the assets. Financial assets are derecognised when the rights to
receive cash flows from the investments have expired or have been transferred
and the Company has transferred substantially all risks and rewards of
ownership. Financial assets arising from contracts with customers are
separately presented in accordance with IFRS 15 'Revenue from Contracts with
Customers' in the Balance Sheet.
Trade and other receivables
Trade and other receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. The Company's
amortised cost financial assets comprise trade and other receivables and cash
and cash equivalents in the balance sheet.
Trade receivables are initially recorded at fair value, but subsequently at
amortised cost using the effective interest rate method. In accordance with
IFRS 9, the Company assesses on a forward-looking basis, the expected credit
losses associated with its financial assets carried at amortised cost. This
assessment considers the age of the debt, as well as historical experience.
The amount of the write-down is determined as the difference between the
asset's carrying amount and the present value of estimated future cash flows.
Financial liabilities
Financial liabilities are initially recognised at fair value, net of
transaction costs, and subsequently carried at amortised cost using the
effective interest rate method. Financial liabilities and equity instruments
are classified according to the substance of the contractual arrangements
entered. An equity instrument is any contract that evidences a residual
interest in the assets of the entity after deducting all its financial
liabilities.
Where the contractual obligations of financial instruments (including share
capital) are equivalent to a similar debt instrument, those financial
instruments are classed as financial liabilities. Financial liabilities are
presented as such in the balance sheet. Finance costs and gains or losses
relating to financial liabilities are included in the income statement.
Finance costs are calculated to produce a constant rate of return on the
outstanding liability. Where the contractual terms of share capital do not
have any terms meeting the definition of a financial liability then this is
classed as an equity instrument. Dividends and distributions relating to
equity instruments are debited directly to equity.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease
liability is initially recognised at the present value of the lease payments
to be made over the term of the lease, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the
consolidated entity's incremental borrowing rate. Lease payments comprise of
fixed payments less any lease incentives receivable, variable lease payments
that depend on an index or a rate, amounts expected to be paid under residual
value guarantees, exercise price of a purchase option when the exercise of the
option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a
rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest
method. The carrying amounts are remeasured if there is a change in the
following: future lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase option and
termination penalties. When a lease liability is remeasured, an adjustment is
made to the corresponding right-of use asset, or to profit or loss if the
carrying amount of the right-of-use asset is fully written down.
Share capital
Ordinary shares are classified as equity. Equity instruments issued by the
Company are recorded at the proceeds received, net of direct issue costs.
Share premium
Share premium represents the excess over nominal value of the fair value of
consideration received for equity shares, net of expenses of the share issue.
Treasury shares
Where the Company purchases the Company's equity share capital, the
consideration paid is deducted from the total shareholders' equity and
classified as treasury shares until they are cancelled. Where such shares are
subsequently sold or re-issued, any consideration received is included in
total shareholders' equity. No gain or loss is recognised on the purchase,
sale, issue or cancellation of the Company's own equity instruments.
Significant accounting estimates and judgements
Capitalisation of development costs - judgement
The point at which development costs meet the criteria for capitalisation is
critically dependent on management's judgement of the point at which technical
feasibility is demonstrable. Furthermore, the useful economic lives of
capitalised development costs are based on management's knowledge of the life
cycle of the Group's products and technology. The carrying value of
development assets also depends on management's ability to demonstrate the
future economic benefits they will deliver. This judgement requires
assumptions about factors outside the business's control such as short and
medium term economic conditions, technological developments and market
changes. Details are contained in note 2.
Impairment of development costs - judgement and estimate
The Group tests annually whether intangible assets, have been impaired by
reference to expected future generation of cash from the relevant platforms
incorporating the technologies and methodologies developed. In estimating the
cash flows the capitalised development costs may generate the directors make
judgements, based on budgets and forecasts, about the amount of future profits
from the relevant products that will be generated and the timing of when these
will be realised. Furthermore, where new technology is acquired through an
acquisition, management consider the impact this could have on the carrying
value of existing technology, that is similar in nature, when preparing the
budgets and forecasts. The Group has carried out an impairment review and
determined no impairment is required in the year ended 31 March 2025 (31 March
2024: £nil). Details are contained in note 2.
Share-based payments - judgement and estimate
In the past the Company has on occasion cash-settled part of long-term
incentive plan equity awards. Despite the repurchase of these equity interests
the Company did not have an obligation to do so and does not have an
obligation, constructive or otherwise to do so in the future. As a result, the
Company continues to account for share-based payments related to its long-term
incentive plans as equity rather than cash-settled.
The 2021 LTIP is subject to Revenue, Profit After Tax and the Company's share
price exceeding certain targets; the full details of which are given in the
Company's Remuneration Report. The measure of the share-based payment charge
is dependent on the estimates made in respect of the probability of those
targets being achieved over the vesting period of the options. The key inputs
into those estimates are the Company's forecasts, revenue volatility and
inflation. Revenue volatility is determined by reference to the share price
volatility used to determine the fair value of the options (with an assumption
that the two will have a high level of correlation). Inflation is determined
by reference to the Bank of England data for the UK. Non-market vesting
conditions are assessed by reference to the Group's latest forecasts. The
final measurement date for the Revenue, Profit After Tax and Company's share
price under the 2021 LTIP was 31 March 2025. As the Company did not meet the
required targets in FY25, the non-market performance conditions have not been
satisfied within the specified time-period and all accumulated charges have
been released in full to the income statement (a credit of £126,000). All
outstanding options under the 2021 LTIP lapsed upon the publication of these
financial statements.
On 18 July 2024, the Committee granted 30,103 nil-costs share options to James
Gregory. These awards will vest on 17 July 2026 if he remains in office at
that time and are subject to no other performance conditions.
Employee benefits - estimate
The Company has historically operated a sabbatical leave scheme, which
provided 20 days paid leave for each successive period of six years' service.
There was no proportional entitlement for shorter periods of service. During
the year ended 31 March 2023, the Company modified the terms of the scheme
such that rather than being open to all employees, the scheme was only
available to those individuals who had accrued three or more years of unbroken
service as at 30 September 2022. During the year ended 31 March 2024, the
Company ceased to operate the sabbatical provision in its entirety, with no
previously eligible individuals entitled to any further paid leave under the
scheme or any alternate compensation. Accordingly, the provision was released
in full.
The average number of staff employed by the Company during the year ended 31
March 2025 was 69 (2024: 65) and total employment costs were £8,183,000
(2024: £7,785,000).
Leases - estimate and judgement
Management exercises judgement in determining the likelihood of exercising
break or extension options in determining the lease term, and reviews this on
a lease-by-lease basis.
The discount rate used to calculate the lease liability is the rate implicit
in the lease, if it can be readily determined, or the lessee's incremental
borrowing rate if not. Incremental borrowing rates are determined based on the
term, country, currency and start date of the lease, to derive the rate of
interest that the lessee would have to pay to borrow over a similar term, and
with a similar security, the funds necessary to obtain an asset of a similar
value to the right-of-use asset in a similar economic environment.
2. Intangible assets
Development costs Software Total
£'000 £'000 £'000
Cost at 1 April 2023 1,225 525 1,750
Additions 736 - 736
Cost at 31 March 2024 1,961 525 2,486
Amortisation at 1 April 2023 101 253 354
Amortisation for the year 423 131 554
Amortisation at 31 March 2024 524 384 908
Carrying value at 31 March 2024 1,437 141 1,578
Cost at 1 April 2024 1,961 525 2,486
Additions 468 - 468
Cost at 31 March 2025 2,429 525 2,954
Amortisation at 1 April 2024 524 384 908
Amortisation for the year 653 139 792
Amortisation at 31 March 2025 1,177 523 1,700
Carrying value at 31 March 2025 1,252 2 1,254
Amortisation charges are included within administrative expenses.
The only software cost as at 31 March 2025 is the Group's finance and
operations system that was brought into use October 2020.
Development costs relate to costs capitalised for the development of the
following:
· "Test Your" platform, which underpins the delivery of our data
and data led consultancy product suite and was completed during the year ended
31 March 2023. The carrying value at 31 March 2025 was £205k (2024: £464k)
· Supply Chain Automation platform which enables System1 to
interface (via API) with multiple suppliers of panel respondents and was
substantially completed at 31 March 2024. The carrying value at 31 March 2025
was £724k (2024: £930k)
· Modular Surveys which facilitates the automation of custom
products and was completed in two phases in the year ended 31 March 2025. The
carrying value at 31 March 2025 was £178k (2024: £nil)
· Boost, which optimises our methodology for sourcing sample
respondents, and is ongoing at 31 March 2025, anticipated to complete in H1
FY2026. The carrying value at 31 March 2025 is £145k (2024: £nil)
Development costs in respect of completed projects are tested for impairment
where impairment indicators exist. No indicators exist at 31 March 2025 (31
March 2024: none). Development costs in respect of ongoing projects are tested
for impairment at each reporting date. The carrying value of the assets in
each case are assigned to their respective cash generating units for the
purposes of assessing future cashflows. The principal assumptions used in the
forecasts were the timing and amount of future revenues and cost savings,
which were derived from the latest forecasts approved by the Board. Following
the assessment, the Board have determined that no impairment of assets is
required as at 31 March 2025 (31 March 2024: £nil). The headroom in the
impairment review exceeds the carrying value of the asset.
3. Tangible assets
Right-of-use assets Furniture Computer hardware Total
and fixtures
£'000 £'000 £'000 £'000
Cost at 1 April 2023 1,245 11 188 1,444
Additions - - 85 85
Disposals (1,245) (11) - (1,256)
Cost at 31 March 2024 - - 273 273
Depreciation at 1 April 2023 467 9 160 636
Depreciation charge for the year 622 2 48 672
Disposals (1,089) (11) - (1,100)
Depreciation at 31 March 2024 - - 208 208
Carrying amount 31 March 2024 - - 65 65
Cost at 1 April 2024 - - 273 273
Additions 681 - 111 792
Cost at 31 March 2025 681 - 384 1,065
Depreciation at 1 April 2024 - - 208 208
Depreciation charge for the year 340 - 73 413
Depreciation at 31 March 2025 340 - 281 621
Carrying amount 31 March 2025 341 - 103 444
4. Investments
£'000
Cost and net book amount at 1 April 2024 and 31 March 2025 581
Subsidiary undertakings
Details of subsidiary undertakings, registered office and country of
incorporation of each, at 31 March 2025 are as follows:
Subsidiary undertaking Registered office Country of incorporation
System1 Research Limited 4 More London Riverside, London, England, SE1 2AU UK
System1 Research B.V. Conradstraat 38 D2. 138, 3013AP Rotterdam Netherlands
System1 Research, Inc. 251 Little Falls Drive, Wilmington, DE 19808, New Castle County, Delaware USA
System1 Research Sarl Avenue Gratta Paille 2, 1018 Lausanne, Switzerland Switzerland
System1 Research GmbH Kleine Seilerstrasse 1 D-20359 Hamburg Germany
System1 Research Do Brazil Servicos de Marketing Ltda. Avenida das Nacoes Unidas 14261 - Conj. 25-126B - Cond. WT Morumbi, CEP Brazil
04794-000, Vila Gertrudes, São Paulo
System1 Research France Sarl 17 Rue de Turbigo, 75002 Paris France
System1 Market Research Pte Ltd 36 Robinson Road, #20-01 City House, Singapore 068877 Singapore
System1 Research Pty Ltd. Suite 1, Level 11, 60 Castlereagh Street, Sydney, NSW 2000 Australia
System1 Agency Limited 4 More London Riverside, London, England, SE1 2AU UK
System1 AdRatings Limited 4 More London Riverside, London, England, SE1 2AU UK
System1 Research Limited, System1 Agency Limited, and System1 AdRatings
Limited are wholly owned direct subsidiaries of System1 Group PLC. The
remaining subsidiaries are each wholly owned direct subsidiaries of System1
Research Limited. The activities of all companies are the provision of market
research data and insight services, apart from System1 Agency Limited and
System1 AdRatings Limited, which are dormant.
5. Debtors
2025 2024
£'000 £'000
Due within one year
Trade debtors - 1
Trade debtors from group companies 5,061 4,873
Amounts due from group companies 20 81
Other debtors 6 84
VAT recoverable 253 211
Corporation tax recoverable - 15
Prepayments 488 782
5,828 6,047
The Company assesses on a forward-looking basis, the expected credit losses
associated with its debt instruments carried at amortised cost. The Company
assesses expected credit losses based on the ageing of the receivable, the
Group's historical experience and informed credit assessment. Further credit
losses are recognised where the Company has information that indicates it is
unlikely to recover balances in full.
The Company is part of a VAT group with its wholly owned subsidiary, System1
Research Limited. As at 31 March 2025, System1 Research Limited had a VAT
liability of £335,000, therefore the net exposure of the two entities is
£172,000 (2024: creditor of £262,000).
6. Creditors
2025 2024
£'000 £'000
Due within one year
Trade creditors 642 693
Social security and other taxes 190 181
Amounts due to group companies 4,758 2,818
Lease liabilities 344 -
Accruals 1,839 2,197
7,773 5,889
7. Provisions for liabilities
Deferred tax Sabbatical Leasehold dilapidations Total
£'000 £'000 £'000 £'000
At 1 April 2023 - 184 10 194
Provided in the year 38 - - 38
Utilised in the year - (12) - (12)
Reversal of unused amounts - (172) (8) (180)
At 31 March 2024 38 - 2 40
Provided in the year 67 - - 67
Utilised in the year - - (2) (2)
At 31 March 2025 105 - - 105
Due within one year - - - -
Due after one year 105 - - 105
The Company has historically operated a sabbatical leave scheme, which
provided 20 days paid leave for each successive period of six years' service.
There was no proportional entitlement for shorter periods of service. During
the year ended 31 March 2023, the Company modified the terms of the scheme
such that rather than being open to all employees, the scheme was only
available to those individuals who had accrued three or more years of unbroken
service as at 30 September 2022. During the year ended 31 March 2024, the
Company ceased to operate the sabbatical provision in its entirety, with no
previously eligible individuals entitled to any further paid leave under the
scheme or any alternate compensation. Accordingly, the provision was released
in full.
8. Deferred tax
Deferred tax assets and liabilities are as follows:
2025 2024
£'000 £'000
Deferred tax assets:
- Deferred tax assets to be recovered after more than 12 months 7 -
- Deferred tax assets to be recovered within 12 months 46 33
53 33
Deferred tax liabilities:
- Deferred tax liability to be recovered within 12 months (158) (71)
Deferred tax (liability)/asset (net): (105) (38)
The gross movement in deferred tax is as follows.
2025 2024
£'000 £'000
Opening balance (38) 26
Income statement charge (82) (64)
Tax credited directly to equity 15
Closing balance (105) (38)
The movement in deferred income tax assets and liabilities during the year,
without taking into consideration the offsetting of balances within the same
tax jurisdiction, is as follows:
Deferred tax assets Other provisions Share options Total
£'000 £'000 £'000
At 1 April 2024 22 11 33
(Charged)/credited to income statement (15) 20 5
Tax credited directly to equity - 15 15
At 31 March 2025 7 46 53
Deferred tax liabilities Accelerated capital allowances
£'000
At 1 April 2024 (71)
Credited to income statement (87)
At 31 March 2025 (158)
9. Share capital
2025 2024
No. £'000 No. £'000
Allotted, called up, and fully paid ordinary shares
At 1 April and at 31 March 13,226,773 132 13,226,773 132
Included within issued share capital are 537,700 ordinary shares held in
treasury (2024: 547,844).
10. Related party transactions
During the year, purchases of £80,539 (2024: £136,374) were made from Merit
Data &Technology Limited, a related party by virtue of the common
directorship of Philip Machray. At the year end, an amount of £8,400 was owed
(2024: £16,800). Of the purchases made, £nil was capitalised within
development costs in the year ended 31 March 2025 (2024: £37,000). Purchases
of £2,250 (2024: £nil) were made from Messier Holdings Limited, a related
party by virtue of the common directorship of John Kearon and Rupert Howell.
At the year end, an amount of £nil was owed.
11. Post balance sheet events
On 13 May 2025, the Company established the 2025 Long-Term Incentive Plan
("2025 LTIP"). Under the 2025 LTIP the Company has granted nil-cost options
over ordinary shares of 1p each in the Company to members of its executive
team, including two Executive Directors of the Company. Details of the scheme
are given in the Remuneration Report on page 56.
Company Information
Company Secretary
Renata Ziolko-Nishikant
Registered Office
4 More London Riverside
London
England
SE1 2AU
United Kingdom
Registered Number
05940040
Independent Auditor
HaysMac LLP
Statutory Auditor
Chartered Accountants
10 Queen Street Place
London
EC4R 1AG
Registrars
Link Asset Services
34 Beckenham Road
Beckenham
Kent
BR3 4TU
United Kingdom
Nominated Adviser & Broker
Canaccord Genuity Limited
88 Wood Street
London
EC2V 7QR
United Kingdom
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