REG - System1 Group PLC - Trading Update

System1Announcement

25/10/2022 07:01

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RNS Number : 9391D  System1 Group PLC  25 October 2022

 

     25 October 2022

 

 

System1 Group PLC (AIM: SYS1)

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

 

Half Year Trading Update

 

 

In advance of its interim results announcement due at the end of November,
System1 today issues an update on trading for the half year ended 30 September
2022 (H1).

 

Data revenue grew 38% to £6.2m (H1 last year: £4.5m) representing 59% of H1
revenue, the highest absolute six-month revenue for our automated predictions
and the highest proportion of Group revenue since launching in 2020. The
continued Data growth was offset by a 46% decline in consultancy from £7.9m
to £4.3m. Consequently, total H1 revenue declined 15% on the comparable
period last year to £10.5m from £12.4m in H1 last year, in line with
management's expectations.

 

Gross profit fell by 18% to £8.5m (H1 last year: £10.4m) on revenue down 15%
versus the comparable period last year, with the reduction in margin due
mainly to region and product mix. Adjusted Operating Costs reduced by 1% to
£9.0m, and the Company expects to report an Adjusted Pre-Tax Loss of £0.4m
in the first half, compared to an Adjusted Pre-Tax Profit of £1.3m in H1 last
year. At Statutory Pre-Tax Profit level, the Company expects to break even in
the first half, down £1.3m on H1 last year.

 

H1 period-end cash, net of borrowings, was £6.6m, compared to £8.7m at
end-March 2022, an outflow for the period reflecting the Adjusted Pre-Tax
higher working capital and the repurchase of shares on market.

 

The Board is encouraged by the strong growth in "Test Your" Data products
which now represent almost 60% of Group revenues in H1 and grew 17% compared
to the preceding half year. It is clear that the transition from bespoke
research consultancy to platform-based "Test Your" data is well underway, and
the Board expects the drag from declining bespoke research consultancy to
reduce progressively.

 

US Litigation

On 9 November 2021, System1 announced that it had 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") over their infringing use of the mark "System1".

Earlier this month, the U.S. District Court Southern District of New York
rejected LLC's motion to dismiss the complaint which means the case will
proceed as planned.

In the same week, we received positive news for the next stage in the legal
case by successfully registering the mark "System1" with the United States
Patent and Trademark Office for use in classes 35 and 38, matching the
registrations already held in the UK, EU, and other territories.

 

Strategic Review

As announced on 31 August 2022, the Board is conducting a review of its
strategic options for growing the business and increasing shareholder value.
The Board also decided to postpone the previously planned tender offer and
share buyback programme, with decisions on future returns of capital being
considered as part of the overall strategic review. As previously announced,
the Board intends to update the market on its strategic review alongside the
interim results announcement on 30 November.

 

 

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 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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