REG - System1 Group PLC - Trading Statement

System1Announcement

23/04/2025 07:00

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RNS Number : 7480F  System1 Group PLC  23 April 2025

 

     23 April 2025

 

 

System1 Group PLC (AIM: SYS1)

 ("System1", or "the Company", or "the Group")

 

Final Quarter and Full Year Trading Update

 

 

System1, the marketing decision-making platform www.system1group.com
(http://www.system1group.com) today issues an update on trading for the
quarter ("Q4") and financial year ended 31 March 2025 ("FY25").

 Revenue £ million - unaudited        Q4    Q4    Q4     H2    H2    H2     Full Year  Full Year  Full Year
                                      FY25  FY24  % YoY  FY25  FY24  % YoY  FY25       FY24       % YoY
 Predict Your (data)                  6.6   5.5   19%    14.7  10.7  37%    28.1       19.8       42%
 Improve Your (data-led consultancy)  1.8   2.1   -15%   3.1   3.1   0%     6.5        5.0        29%
 Platform Revenue                     8.4   7.7   10%    17.9  13.9  29%    34.6       24.8       39%
 Other consultancy (non-platform)     0.5   1.0   -48%   1.2   2.9   -57%   2.9        5.2        -45%
 Total Revenue                        8.9   8.7   3%     19.1  16.7  14%    37.4       30.0       25%

* All numbers in this announcement are unaudited and therefore may be subject
to change.

Full Year Highlights

« Total Revenue of £37.4m, +25% YoY (FY24: £30.0m)

« Platform Revenue up by 39% YoY

« Over 300 new Platform clients produced £8.1m new Platform Revenue (FY24:
£7.5m)

« Platform Net Revenue Retention 106% (FY24: 100%)

« US Revenue +49% YoY; UK + 28% YoY

« Ad testing Revenue +39% YoY

« Gross profit margin 88% (FY24: 87%)

« Adjusted EBITDA £6.5m (FY24: £4.4m)

« 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.

 

 

Revenue

Total Q4 Revenue of £8.9m was 2% higher than the very strong equivalent
quarter last year, lifting FY25 Total Revenue to £37.4m, up 25% year on year.
Platform Revenue increased by 9% in Q4 and 39% for the year due to continued
strong performance in the UK and the US.  Platform Revenue comprised 94% of
Revenue in Q4 and 92% for the year as a whole (Full year FY24: 83%). New
business performance was strong throughout the year, with over 300 new
platform clients providing 23% of full year Platform Revenue.

 

New business wins in Q4 included an international video streaming service, one
of the world's top three wine and spirits sellers, a large discount retailer
chain, a US biotech business, and a multinational quick service restaurant
group. Ad testing revenue grew by 39% in the year; Innovation showed
double-digit growth H2 on H1 but declined by 30% YoY, and Brand was 4% lower
than in FY24.  The relatively modest overall revenue growth in Q4 reflected
recent global disruption, volatility and uncertainty in global markets. In
spite of this, March was the highest revenue month of the financial year.

 

Profitability

The Gross Profit margin was consistently strong in each quarter, closing at
88% for the year (FY24: 87%). Based on the unaudited management accounts,
Adjusted Profit before Taxation for the year ended 31 March 2025 is expected
to amount to £5.2m, up £2.1m, 68% on FY24. The adjusted EBITDA margin of
over 17% in a period of accelerated investment in growth (FY24: 14%),
represents good progress towards the Group's at-scale goal of 30%.

 

Cash Generation

Net cash increased by £4.0m in H2 FY25 and £3.3m across the year, resulting
in year-end net cash of £12.9m (FY24: £9.6m, H1 FY25: £8.9m). Free cash
flow was £4.2m after £0.7m of property lease payments treated as
depreciation; (FY24: £4.0m). A £0.6m dividend was paid in Q3.

 

Notice of FY results

The Company intends to publish its FY25 results on 9 July 2025. Details of the
Investor Meet Company presentation will follow closer to the day of the
results.

 

Outlook

While it is too early for us to gauge the effect that the current volatility
in global markets will have on our clients' budgets, inevitably at this stage
there is more downside than upside risk and we will provide a further update
in our full year results. While we remain focused on continuing the profitable
growth momentum in the business, replicating 40%+ platform revenue growth may
be challenging in the current global economic and political climate, however
we do anticipate continuing to deliver strong revenue growth. We strongly
believe that with 25 years of advertising and innovation experience, and a
methodology rooted in behavioural science, System1 is well placed to achieve
our long-term goals by enabling the world's largest brands to create with
confidence.

 

Commenting on the results, CEO James Gregory said: "This year we delivered 39%
platform revenue growth, improved profitability and cash generation whilst
investing substantially in our people, the US market, and our customer
offering. We begin the new financial year with a clear plan to grow our
business in the US and revitalise our Innovation product offering".

 

 

Further information on the Company can be found at www.system1group.com
(http://www.system1group.com) .

 

This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of domestic law in
the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 and
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, Chief Executive Officer
 Chris Willford, Chief Financial Officer
                                                              Tel: +44 (0)20 7524 8000

 Canaccord Genuity Limited (Nominated Adviser & Broker)
 Simon Bridges / Andrew Potts / Harry Rees

 

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