REG - System1 Group PLC - Trading Update

System1Announcement

16/04/2024 07:00

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RNS Number : 7013K  System1 Group PLC  16 April 2024

 

     16 April 2024

 

 

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 2024 (FY24).

 

 Revenue £ million - unaudited        Q4    Q4    Q4     Year  Year  Year
                                      FY24  FY23  % YoY  FY24  FY23  % YoY
 Predict Your (data)                  5.6   4.5   24%    19.7  14.1  40%
 Improve Your (data-led consultancy)  2.0   1.0   98%    4.9   3.3   47%
 Platform Revenue                     7.6   5.5   37%    24.7  17.4  42%
 Other consultancy (non-platform)     1.1   1.2   -6%    5.3   6.0   -12%
 Total Revenue                        8.7   6.7   30%    30.0  23.4  28%

 

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

 

Q4 Revenue of £8.7m was 30% higher than the equivalent quarter last year,
lifting FY24 Revenue to £30.0m, up 28% year on year. Platform Revenue growth
remained strong (+37% in Q4; +42% for the year) buoyed by the successful H2
launch of TYA Pro+ and more than 50% Platform Revenue growth in Q4 in the US
where Revenue grew quarter on prior quarter throughout FY24. Platform Revenue
comprised 87% of Revenue in Q4 and 82% for the year as a whole (FY23:74%). New
business performance was strong throughout the year, with over 250 new clients
providing just over a quarter of total Revenue. All geographic regions
achieved substantial double-digit Revenue growth for the year. The
Communications product group (Test Your Ad) delivered the majority of the
Revenue growth in FY24, with gains in Innovation offsetting a reduction in
Brand following the end of a non-platform multi-year contract.

 

Following an exceptional H1, gross profit margins returned to expected levels
in H2, achieving 87.0% for the year as a whole (FY23: 84.2%), ahead of our 85%
benchmark.

Net cash increased by £3.3m in H2 FY24 and £3.9m across the year, resulting
in year-end net cash of £9.6m (FY23: £5.7m).

 

Based on the unaudited management accounts, Profit before Taxation for the
year ended 31 March 2024 is expected to amount to £2.8m, up £2.1m on FY23
and ahead of market expectations(1). This Profit before Taxation figure
includes the release of £0.4m of provisions related to a now-closed
sabbatical scheme. The adjusted EBITDA margin for the year is expected to
exceed 14% (FY23: 8%), representing good progress towards the Group's at-scale
goal of 30%.

 

Marking its confidence in the Group's cash generation and continuing
profitable growth, the Board intends to resume paying dividends, starting with
a final dividend for FY24 which will be detailed in the annual results and
formally proposed to shareholders at September's AGM.

 

Commenting on the results, CEO James Gregory said: "Our first full year post
the 2022 Strategic Review has surpassed our expectations. We have delivered
£30m of Revenue, up 28% year on year, growing quarter on prior quarter
throughout the year. This is underpinned by over 250 new client wins, Platform
Revenue up by over 40% and Profit before Taxation up by 300% on the previous
year. In the coming year we will step up investment in attracting, winning and
retaining customers in order to continue our growth trajectory".

 

1.     For the purpose of this announcement, the Group believes market
consensus for FY24 to be revenue of £29.1m, and profit before tax of £2.4m.

 

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
 James Gregory, Chief Executive Officer
 Chris Willford, Chief Financial Officer
 Canaccord Genuity Limited (Nominated Adviser & Broker)      Tel: +44 (0)20 7523 8000
 Simon Bridges / Andrew Potts / Harry Rees

 

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