SYS1 System1 Group Plc

TIDMSYS1

RNS Number : 1242C

System1 Group PLC

06 February 2020

 
 Press Release   6 February 2020 
 

System1 Group PLC (AIM: SYS1)

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

Trading Update and Planned Share Buyback

System1 Group PLC (AIM: SYS1) (the international online market research agency), announces today the following trading update for its financial year to the end of March 2020.

After H1 single-digit growth, followed by modest further progress in Q3, trading in Q4 to date has been disappointing, due in the main to the ongoing transition of sales talent, and subsequent disruption and decline in adhoc revenue from smaller clients. Given the limited visibility in some areas, it is difficult to predict the full year outturn, but the Board believes Gross Profit will be slightly down compared to the prior year.

The Company continues to invest heavily in its AdRatings database, sales talent, digitisation and automation, in support of its increasing emphasis on Advertising Effectiveness. Underlying Overhead Costs (excluding Share Based Payments and AdRatings) are expected to increase 4-6% over the 2019/20 financial year.

The lower than expected Gross Profit and increased costs are expected to result in a normalised 2019/20 Profit Before Tax (i.e. excluding Share Based Payments and AdRatings) materially below the current market expectation.

At the same time AdRatings, now rebranded "Test Your Ad", is starting to show its commercial promise. As part of ITV Media's objective to 'Get people to fall back in love with advertising', they have chosen System1 as their partner in rating the 'Nation's favourite Ads' and helping advertisers to create more of them - starting with a UEFA Euro 2020 Competition to select the best sporting Ad, with the winner awarded a free advertising slot in the half-time break of the final match.

The Company has GBP4.2m cash, and no debt, and in line with the Company's approach to capital allocation, the Board intends to conduct a share buyback program of up to GBP1.5m of the Company's shares, following its normal post year-end Trading Update in April, subject to the Company's share price and cash balance at the time. This would be by way of market purchases. The Company will provide a further update nearer the time. Any share buybacks will be made under the existing authority the Company has in place to make market purchases, and also in accordance with the Market Abuse Regulation (EU) No. 596/2014 and Commission Delegated Regulation (EU) No. 2016/1052 where practicable.

The Company can be found at www.system1group.com.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside 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, Chief Executive Officer 
 James Geddes, Chief Financial Officer 
 Canaccord Genuity Limited                 Tel: +44 (0)20 7523 
                                                          8000 
 Simon Bridges / Andrew Potts 
 

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END

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February 06, 2020 02:00 ET (07:00 GMT)

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