REG - System1 Group PLC - Trading Update

System1Announcement

27/04/2022 07:00

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RNS Number : 4407J  System1 Group PLC  27 April 2022

27 April 2022

 

SYSTEM1 GROUP PLC (AIM: SYS1)

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

 

 

Year End Trading Update

 

 

System1 Group, the marketing decision-making platform, is today providing a
Trading Update for its financial year to the end of March 2022 ahead of its
results announcement on 12 July 2022.

 

12 MONTHS TO END-MARCH 2022

 

Revenue for the year rose by 6% to £24.1m (H1: +22%, H2: -8%). Data Revenue
increased by £8.4m year on year to £9.7m (H2: £5.3m), representing 40% of
the total (H2: 45%). As indicated in the interim statement and the February
trading updates, adjusted operating expenditure, principally employee-related
costs, rose 18% year on year (H2: 26%) reflecting the planned investment in
people, partnerships and platform.

Profitability was stronger in H1 than H2 as the planned increase in H2
operating costs coincided with a reduction in revenue during the final
quarter. We expect to report an adjusted profit before taxation (which
excludes impairment, share-based payments, government support, bonuses, loan
interest and certain provisions) of some £1.1m for the full year (FY21:
£3.0m). Statutory profit before taxation is expected to be ca £0.8m, £1.1m
before share-based payments. (FY21: £2.1m, £2.2m)

 

The business continued to generate cash, ending the period with £8.7m cash
net of borrowing versus £6.5m at the previous year end. During the final
quarter of the year the Company spent £0.6m repurchasing 158,674 ordinary
shares. No dividends were declared or paid during the financial year

 

 

OUTLOOK

System1 remains focused on achieving revenue growth over the short and medium
term. Having stepped up our investment in people, partnerships and platform to
develop and commercialise our automated marketing predictions last year, we
are convinced that it is right to keep those resources and infrastructure in
place despite the fall off in revenue performance in the last quarter.  We
intend to grow revenue and profits in the course of the new financial year and
anticipate that the growth will be weighted to the second half of the year as
expenditure flattens versus last year.  The launch of Test Your Idea and
further development of our commercial partnerships are expected to promote
revenue growth, particularly in the second half of the financial year.

 

System1 Founder and CEO John Kearon said: "System1 has rapidly addressed the
issues that led to the reduction in sales last quarter by injecting fresh
talent in the USA and unifying our sales and marketing activities under the
chief growth officer. The executive leadership group is focused on delighting
customers with the speed of our decision-making platform and the clarity of
our creative guidance."

 

CAPITAL MARKETS DAY

 

System1 will be holding a Capital Markets Day for investors and analysts at
14:00 BST today. This virtual event will be an opportunity for to learn more
about the Company's operating model, prediction methodologies and growth
strategy.

 

Speakers will include John Kearon (CEO), Chris Willford (CFO), Jon Evans
(Chief Growth Officer) and James Gregory (COO).

 

The Capital Markets Day is expected to last from 14:00 - 15:30 BST. To
register for the event, please email investorrelations@system1group.com .

 

A copy of the presentation materials and a video replay will be available on
the Company's website.

 

Other than as set out in today's announcement, no new material information
regarding current trading will be disclosed at the Capital Markets Day.

 

The Company can be found at https://system1group.com/
(https://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
 John Kearon, Founder and Chief Executive Officer
 Chris Willford, Chief Financial Officer
 Canaccord Genuity Limited                         Tel: +44 (0)20 7523 8000
 Simon Bridges / Andrew Potts

 

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