REG - System1 Group PLC - Trading Update

System1Announcement

22/10/2024 07:00

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RNS Number : 0321J  System1 Group PLC  22 October 2024

 

 

 

     22 October 2024

 

 

System1 Group PLC (AIM: SYS1)

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

Quarter 2 and Half Year Trading Update

 

 

 

System1, the marketing decision-making platform www.system1group.com
(https://system1group-my.sharepoint.com/personal/chris_willford_system1group_com/Documents/Trading%20Updates/October%202024/www.system1group.com)
today issues an update on trading for the quarter ended 30 September 2024 (Q2
FY25) and the half-year ended 30 September 2024 (H1 FY25) in advance of its
interim results announcement scheduled for 3 December 2024.

 

 

 

Quarter 2

Platform Revenue increased by 35% to £8.2m with data sales 32% and data-led
consultancy 53% higher than in the same period last year. Platform Revenue
comprised 92% of Total Group Revenue in Q2 FY25 (Q2 FY24: 85%). As announced
in July, Platform Revenue in the previous quarter (Q1) was £8.6m reflecting
an exceptionally strong period, and ahead of our own expectations. Total Q2
FY25 Revenue of £8.9m grew by 25% on Q2 FY24, including the impact of lower
non-platform revenues. Growth in Group Revenue was driven mainly by the US
where Total Revenue rose by over 60% and Platform Revenue by over 75% compared
with Q2 FY24.

 

 

Half Year

The Company won over 160 new platform clients in H1 FY25 (H1 FY24: 136),
including a global short-form video hosting platform, a leading global
automotive business, and an international food delivery business.

Platform Revenue in H1 FY25 increased by 53% versus H1 FY24 to £16.7m with
data sales 48% and data-led consultancy 76% higher. Total H1 FY25 Revenue of
£18.3m was 38% above the same period last year, including the impact of a
£0.7m reduction in non-platform business. Growth in Revenue was driven mainly
by the US where Platform Revenue was more than double H1 FY24. Platform
Revenue comprised 91% of Total Group Revenue in H1 FY25 (H1 FY24: 82%).
Revenue growth in H1 derived from Ad testing (Comms), with Brand and
Innovation product groups broadly in line with H1 FY24.

 

Gross Profit in H1 FY25 reached £16.0m at a margin of 87.3% (H1 FY24: £11.7m
at 87.8% margin). Operating expenditure increased by £2.6m (+23% on H1 FY24),
due to increased investment in people, product and marketing to fuel the next
phase of growth.

 

Based on the unaudited management accounts, the Group expects to report a
Statutory Pre-Tax Profit of ca £2.5 million for the half-year including a
£0.1m credit to share-based payments (H1 FY24: £0.9m).

 

Free cashflow in H1 was in line with our plan, with an outflow of £0.3m, due
mainly to the payment of £2.6m of FY24 performance bonuses. The reduction in
the value of the US dollar and other currencies against Sterling, notably in
September, reduced the converted value of non-Sterling bank balances by £0.4m
compared to 31 March 2024 and, combined with the free cash outflow, resulted
in a 30 September 2024 cash balance of £8.9m (31 March 2024: £9.6m; 30
September 2023: £6.3m).

 

Commenting on the trading update, CEO James Gregory said: "I am delighted that
our focus on winning in America is delivering strong growth and financial
results. We are continuing to win and retain business with the world's largest
advertisers and will be accelerating and significantly increasing investment
in the coming months to build our position in America and revitalise System1's
Innovation proposition."

 

Interim Results

The Company intends to release interim results for the half-year ended 30
September 2024 on 3 December 2024.

 

Further information on the Company can be found at 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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