TIDMSYS
RNS Number : 0872G
SysGroup PLC
23 November 2020
23 November 2020
SysGroup plc
("SysGroup" or the "Company" or the "Group")
Half yearly results for the six months ended 30 September
2020
SysGroup plc (AIM:SYS), the multi award-winning m anaged IT
services and cloud hosting provider , is pleased to announce its
unaudited half year results for the six months ended 30 September
2020 ("H1 2021").
Financial highlights
-- Revenue of GBP9.01m (H1 2020: GBP9.26m)
-- Recurring Managed IT Services revenue represented 83% of total revenue (H1 2020: 80%)
-- Adjusted EBITDA (1) increased 19% to GBP1.41m (H1 2020: GBP1.18m)
-- Adjusted profit before tax(2) increased by 52% to GBP0.99m (H1 2020: GBP0.65m)
-- Statutory profit before tax of GBP0.13m (H1 2020: loss of GBP0.37m)
-- Adjusted basic EPS (3) of 1.7p (H1 2020: 1.1p)
-- Basic profit per share of 0.2p (H1 2020: loss per share 0.9p)
-- Operational cashflows increased 83% to GBP1.56m (H1 2020: GBP0.85m)
-- Cash of GBP3.02m at 30 September 2020 (30 September 2019: GBP2.65m)
-- Net cash (4) at 30 September 2020 of GBP1.17m (30 September 2019: net debt of GBP(0.72)m)
Operational highlights
-- Resilient COVID-19 response with all team members continuing to work remotely
-- Certus and HNS integration completed on time
-- Project Fusion progressing according to plan to deliver a
unified platform of systems across the Group
-- Closure of Bristol satellite office to reflect new homeworking practices
Adam Binks, Chief Executive Officer, commented:
"I am pleased to be able to report on a period that has
demonstrated the stability, agility and relevance of our business
during a global crisis which has resulted in considerable
uncertainty for many businesses. Our team has worked tirelessly to
continue to provide a robust and uninterrupted service to our
customers whilst adapting to new ways of working and, for that
effort, I am extremely grateful.
Whilst COVID-19 has had a marked impact on many sectors, it has
created a huge opportunity for the IT services sector. The value of
robust, flexible and secure IT has never been so important to
businesses; outsourced managed services has been recognised as a
key component of many businesses' success, growth and continuity.
We look forward to capitalising on that trend in the years to
come."
Notes
1. Adjusted EBITDA is earnings before interest, taxation,
depreciation, amortisation of intangible assets, exceptional items
and share based payments.
2. Adjusted profit before tax is profit before tax after adding
back amortisation of intangible assets, exceptional items and share
based payments.
3. Adjusted basic EPS is profit after tax after adding back
amortisation of intangible assets, exceptional items, share based
payments and associated tax,divided by the number of shares in
issue.
4. Net cash represents cash balances less bank loans, lease
liabilities and contingent consideration.
For further information please
contact:
Tel: 0151 559
SysGroup Plc 1777
Adam Binks, Chief Executive
Officer
Martin Audcent, Chief Financial
Officer
Shore Capital (Nomad and Broker) Tel: 020 7408
Corporate Finance: Edward Mansfield 4090
/ Daniel Bush
Corporate Broking: Fiona Conroy
Tel: 07780 901
Alma PR (Financial PR) 979
Josh Royston / Helena Bogle
About SysGroup
SysGroup is a leading provider of Managed IT Services, Cloud
Hosting, and expert IT Consultancy. The Group delivers solutions
that enable clients to understand and benefit from industry leading
technologies and advanced hosting capabilities. SysGroup focuses on
a customer's strategic and operational requirements - enabling
clients to free up resources, grow their core business and avoid
the distractions and complexity of delivering IT services.
The Group has offices in Liverpool, London, Newport and
Telford.
For more information, visit http://www.sysgroupplc.com
Introduction
The Group delivered solid results in the first half of FY21
including a 19% increase in Adjusted EBITDA to GBP1.41m despite the
challenging economic environment which continues to be clouded by
the COVID-19 pandemic. Total revenue was largely flat YOY at
GBP9.01m with lower Value Added Resale ("VAR") sales which was
partially offset by a slight increase in recurring managed IT
services revenue which represented 83% of the Group's total revenue
(H1 2020: 80%). Our VAR sales, which contributed 17% of the total
revenue, were impacted in Q1 due to customers cautiously
withholding capex expenditure whilst they assessed the impact of
COVID-19 to their own businesses. As decision makers become more
confident with the economic landscape, we expect to see this figure
recover in the second half of the year and early evidence of this
is already being seen.
Following the acquisitions in 2019, the integration of Certus IT
Limited ("Certus") and Hub Network Services Limited ("HNS") is now
fully complete and the benefits to the Group are starting to be
realised. In keeping with our business model of focussing on the UK
mid-market, we have exited some lower margin customer contracts
that came with these acquisitions. Whilst this has had a small
impact on revenue the impact to the Group's profitability is
minimal.
As part of the integration, significant efforts have been made
to complete the rebranding of the acquired businesses to reflect
our operating model of a single go-to-market offering, known as
"one SysGroup". I am pleased to report that Certus and HNS are now
functioning under the SysGroup brand, with all systems fused onto a
single platform providing greater visibility across the enlarged
customer base. This has not only provided fast and accurate access
to greater business intelligence across the entire Group, but the
consolidated platform will enable future acquisitions to be
integrated with relative ease going forward.
We have continued to invest in people during the period
including in new hires to support future growth and development. In
addition, we have continued to invest in training for our sales and
leadership teams to ensure they can continue to confidently engage
with our customers. Training has been particularly important during
the pandemic as staff continue to adapt to different ways of
working.
Combined with this we have been particularly pleased to have
supported our staff throughout the pandemic and have had no need to
make use of the furlough scheme or any of the government backed
financial support mechanisms. We also took the decision early on in
the pandemic to maintain our fully remote working model through to
at least the new calendar year on the basis that a second lockdown
would be likely after the summer. In doing so, we have been able to
give our staff clarity and peace of mind, which has resulted in a
stabilised workforce who have been able to concentrate on
continuing to support our customers to the high standards to which
they are accustomed.
Strategy
The Group's strategy remains consistent: to expand its position
as a trusted provider of managed IT services to businesses in the
UK mid-market. The Board believes that a business focused on the
provision of managed IT services offers the highest growth
opportunity and the potential for increased margins and longer-term
contracts, thereby providing greater revenue visibility.
To deliver against this strategy, the Group has positioned
itself as an extension of a customer's existing IT department, with
an emphasis on consultative-led sales to guide customers through
the complexities and developments in the managed IT services and
cloud hosting marketplace. Our primary purpose is to remain abreast
of developments in technology and advise our customers accordingly.
This leading role is supplemented by exceptional customer service
and support, resulting in strong client engagement and embedding
SysGroup into their organisations. The Group continues to invest in
R&D to ensure its clients are making use of the latest and best
solutions available to them whilst maintaining its vendor agnostic
approach.
The Company's route to execute this strategy is through a
combination of organic and acquisitive growth whilst ensuring
cross-selling opportunities are created throughout the acquired
customer bases, providing a single go-to-market offering under the
SysGroup brand. Whilst COVID-19 has temporarily impacted our
ability to acquire quality businesses to add to our platform for
the short term, we will continue to assess strategic acquisitions
going forward which fit our strict criteria and believe there will
be further opportunities in due course.
Results and trading
During the period, the Group delivered revenue of GBP9.01m (H1
2020: GBP9.26m), a decrease of 3%, and Adjusted EBITDA of GBP1.41m
(H1 2020: GBP1.18m), an increase of 19%.
Managed IT services revenue of GBP7.46m was slightly higher than
H1 2020's GBP7.38m with the decline in Group revenue driven by
lower VAR sales in the period. VAR revenue in H1 2021 was GBP1.55m
compared to GBP1.88m in H1 2020 and sales were affected in Q1 by
customers withholding capex expenditure as an early precaution in
response to the impact of COVID-19 on their businesses and markets.
This has led to a shift in revenue mix to 83% managed IT services
and 17% VAR revenue in the period (H1 2020: 80%:20%) which we see
as a temporary position. We have seen VAR sales and orders begin to
recover during the latter part of Q2 and cautiously anticipate this
to continue into H2 2021 which would lead to a full year revenue
mix more similar to FY20.
Gross profit was GBP5.38m with a gross margin of 59.7% (H1 2020:
GBP5.47m and 59.1% respectively). The higher gross margin reflects
the increase in revenue mix towards managed IT services in the
period. Adjusted operating expenses of GBP3.97m were GBP0.32m below
the same period last year (H1 2020: GBP4.29m) which is due to the
benefit of acquisition synergies and the capitalisation of R&D
costs for Project Fusion, discussed in the Operations section
below. We have made no use of the government furlough scheme and
whilst we have implemented a Group wide recruitment freeze, in
certain areas of our business we have continued to make strategic
hiring decisions to support continued future growth.
The Group has reported a statutory profit before tax of GBP0.13m
which compares to a loss before tax of GBP(0.37)m in H1 2020. This
movement is principally due to the increase in Adjusted EBITDA and
lower level of exceptional costs in the period.
Adjusted basic earnings per share for H1 2021 was 1.7 pence (H1
2020: 1.1 pence). Basic profit per share for H1
2021 was 0.2 pence (H1 2020: loss per share of 0.9 pence).
The Group has a strong net cash position of GBP1.17m post IFRS16
(H1 2020: net debt GBP(0.72)m), and GBP1.63m pre-IFRS16 (H1 2020:
GBP0.14m). The Group's cash balance at 30 September 2020 was
GBP3.02m (30 Sept 2019: GBP2.65m) reflecting good working capital
control. During the period the Company paid the final earn-out
consideration relating to the acquisition of Certus. The full
earn-out profit target was achieved and GBP0.975m cash
consideration was paid to the vendors of Certus. The Group has made
no use of any of the government backed COVID-19 assistance schemes
other than to defer the payment of Q1 VAT which amounts to GBP0.28m
which will be paid in full prior to 31 March 2021.
Working capital has been managed well with a net GBP0.31m cash
inflow in the period (H1 2020: GBP0.04m) and a cash conversion rate
of 115% (H1 2020: 96%). On a like for like basis, excluding the
benefit of the VAT deferral, cash conversion remains strong at 95%
(H1 2020: 96%). This performance has been achieved despite
providing financial support to a small number of customers during
the period.
Share Option Grants
In July this year, we announced the implementation of a new 2020
SysGroup Long Term Incentive Plan ("2020 LTIP"), together with an
initial grant of 400,000 performance shares (the "Award") under the
2020 LTIP. The Remuneration Committee granted 250,000 performance
shares to Adam Binks, Chief Executive Officer, and 150,000
performance shares to Martin Audcent, Chief Financial Officer
(together the "Executive Directors"). The 2020 LTIP replaced in its
entirety the incentive plan set up in June 2018 ("2018 LTIP") and
the 1.6 million performance shares granted to the Executive
Directors under the 2018 LTIP vested with immediate effect.
In addition to the grant of the 400,000 performance shares to
the Executive Directors, 450,000 share options were granted in
April 2020 to senior management under the existing 2018 SysGroup
EMI Scheme.
Market Opportunity
Despite a subdued market environment, with many prospects
hesitant to sign new contracts until they have increased visibility
on their own operations, we believe the long term market
opportunity for SysGroup remains buoyant, underpinned by the
visible need for digital transformation. The accelerated shift
towards flexible and remote working has forced many companies to
rethink how they operate and adapt their working practices for both
the short and long term. This has positioned SysGroup well for the
future - now more so than ever, businesses are relying on proven
technology to ensure the smooth running of their operations and are
seeing the value of outsourced managed IT services. We therefore
anticipate significant sales opportunities over the coming years as
businesses realise the importance of enhanced IT processes within
their operations. We are well placed to support our customers
through this period of global change which will be further
supported by our buy-and-build strategy.
Operations
During H1 we completed the integration of the Certus and HNS
businesses and have already begun to see encouraging results.
Following completion of phase one of Project Fusion, the unified
platform of systems across the Group will enable more efficient
working practices and higher quality operating and reporting
information. Project Fusion has multiple workstreams for systems
covering Customer Relationship Management, Service Desk, Financial
Accounts, Marketing and Risk Management, and will greatly benefit
the Group as it not only provides enhanced business intelligence
but also makes the integration of future acquisitions simpler and
easier.
Our customer engagement strategy which was launched in the prior
year is designed to help us better identify customer motivations
and preferences to ensure we maintain our excellent customer
retention rates. Naturally, we have found it difficult to progress
this to the fullest extent whilst customers and team members are
working remotely, however, we have invested considerable time and
resources in training our sales teams to enable them to strengthen
customer relationships virtually. Whilst we have started to see
initial progress, we see this as a long-term process, which will
start to deliver tangible results in future periods.
Following the integration of the HNS business and owing to the
success of our homeworking capability, we made the decision to
close our Bristol office and transition the team members based from
that location to become permanent homeworkers. We expect to see a
small operational saving as a result of the closure.
Outlook
The first half of FY21, whilst clouded with some uncertainty,
has demonstrated the resilience of our business model and the clear
need for our offering. The integration of the acquired businesses
has both streamlined and enhanced our services, providing a
consolidated platform from which to operate and we believe this
will greatly benefit the Group for the remainder of the year as
well as future periods.
The swift invocation of our business continuity plan following
the global outbreak of COVID-19 and the transition of all employees
to homeworking, has proved to be successful, with our teams
providing uninterrupted service and support to our customers
throughout the period. The decision to keep all team members
working from home has ensured consistency throughout whilst having
minimal disruption on the day-to-day running of the Group. I would
like to thank our entire team for their continued hard work and
dedication through what has been a very challenging time for
everybody.
Despite the economic uncertainty that is still apparent, with
guidance now re-established in the market, the Board is confident
that the Company will meet full year expectations.
Adam Binks
Chief Executive Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
SIX MONTHSED 30 SEPTEMBER 2020
Unaudited Unaudited Audited
six months six months year to
to to
30-Sep-20 30-Sep-19 31-Mar-20
Notes GBP'000 GBP'000 GBP'000
Revenue 2 9,007 9,260 19,492
Cost of sales (3,629) (3,788) (8,291)
Gross profit 2 5,378 5,472 11,201
Operating expenses before depreciation,
amortisation, exceptional items and
share based payments (3,971) (4,291) (8,387)
------ ------------ ------------
Adjusted EBITDA 1,407 1,181 2,814
------------------------------------------ ------ ------------ ------------ ----------
Depreciation (369) (427) (847)
Amortisation of intangible assets (671) (636) (1,321)
Exceptional items 4 (36) (288) (475)
Share based payments (155) (95) (199)
------------------------------------------ ------ ------------ ------------ ----------
Administrative expenses (5,202) (5,737) (11,229)
Operating profit/(loss) 176 (265) (28)
------------------------------------------ ------ ------------ ------------ ----------
Finance costs (51) (103) (206)
========================================== ====== ============ ============ ==========
Profit/(loss) before taxation 125 (368) (234)
Taxation (30) (59) 112
Total comprehensive profit/(loss)
attributable to the equity holders
of the company 95 (427) (122)
------------------------------------------ ------ ------------ ------------ ----------
Basic earnings per share (pence) 3 0.2p (0.9p) (0.2p)
Fully diluted earnings per share (pence) 3 0.2p (0.9p) (0.2p)
------------------------------------------ ------ ------------ ------------ ----------
All the results arise from continuing operations.
CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2020
Unaudited Unaudited Audited
30-Sep-20 30-Sep-19 31-Mar-20
Notes GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Goodwill 15,554 15,578 15,554
Intangible assets 5,766 6,704 6,188
Plant, property and equipment 1,548 1,977 1,824
---------------------------------- ------- ----------- ---------- ----------
22,868 24,259 23,566
Current assets
Trade and other receivables 6 2,492 2,283 2,726
Cash and cash equivalents 3,021 2,647 3,036
---------------------------------- ------- ----------- ---------- ----------
5,513 4,930 5,762
Total Assets 28,381 29,189 29,328
---------------------------------- ------- ----------- ---------- ----------
Equity and Liabilities
Equity attributable to the equity shareholders of the parent
Called up share capital 494 494 494
Share premium 9,080 9,080 9,080
Other reserve 2,483 2,226 2,328
Translation reserve 4 4 4
Retained earnings 8,258 7,856 8,163
---------------------------------- ------- ----------- ---------- ----------
20,319 19,660 20,069
Non-current liabilities
Lease liabilities 296 540 441
Deferred taxation 1,082 1,288 1,200
Bank loan 951 1,284 1,146
---------------------------------- ------- ----------- ---------- ----------
2,329 3,112 2,787
Current liabilities
Trade and other payables 7 3,892 3,575 3,488
Deferred income 1,238 1,297 1,465
Contingent consideration - 1,000 1,000
Lease liabilities 270 321 268
Bank loan 333 224 251
================================== ======= =========== ========== ==========
5,733 6,417 6,472
Total Equity and Liabilities 28,381 29,189 29,328
---------------------------------- ------- ----------- ---------- ----------
CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
SIX MONTHSED 30 SEPTEMBER 2020
Attributable to equity holders of the parent
Share Share Other Translation Retained Total
capital premium reserve reserve profit
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2019 494 9,080 2,129 4 8,370 20,077
Loss and total comprehensive
expense for the period - - - - (427) (427)
Share-based payment charge - - 97 - - 97
Adjustment on adoption
of IFRS16 - - - - (87) (87)
-------------------------------- --------- --------- --------- ------------ --------- --------
At 30 September 2019 494 9,080 2,226 4 7,856 19,660
Profit and total comprehensive
income for the period - - - - 307 307
Share-based payment charge - - 102 - - 102
-------------------------------- --------- --------- --------- ------------ --------- --------
At 31 March 2020 494 9,080 2,328 4 8,163 20,069
Profit and total comprehensive
income for the period - - - - 95 95
Share-based payment charge - - 155 - - 155
At 30 September 2020 494 9,080 2,483 4 8,258 20,319
-------------------------------- --------- --------- --------- ------------ --------- --------
The following describes the nature and purpose of each reserve
within equity:
Reserve Description and purpose
-------------------- ----------------------------------------------------
Other reserve Amount reserved for share-based payments to
be released over the life of the instruments
and the amount subscribed for share capital
in excess of nominal value of acquisition of
another company
Retained earnings All accumulated profits and losses arising
net of distributions to shareholders
Share premium
Amounts subscribed for share capital in excess
of the nominal value
------------------ --------------------------------------------------------
CONSOLIDATED INTERIM STATEMENT OF CASHFLOWS
SIX MONTHSED 30 SEPTEMBER 2020
Unaudited Unaudited Audited
six months six months Year to
to to
30-Sep-20 30-Sep-19 31-Mar-20
GBP'000 GBP'000 GBP'000
Cashflows used in operating activities
Net profit/(loss) after taxation 95 (427) (122)
Adjustments for:
Depreciation and amortisation 1,040 1,063 2,168
Finance costs 51 103 206
Share based payments 155 95 199
Taxation 30 59 (112)
-------------------------------------------- ------------ ------------ ----------
Operating cashflows before movements
in working capital 1,371 893 2,339
-------------------------------------------- ------------ ------------ ----------
Decrease in trade and other receivables 223 942 501
Increase/(decrease) in trade
and other payables 83 (902) (533)
Operating cashflows before interest
and tax 1,677 933 2,307
-------------------------------------------- ------------ ------------ ----------
Interest paid (51) (103) (205)
Taxation (paid)/refunded (69) 21 (172)
Operational cashflows 1,557 851 1,930
-------------------------------------------- ------------ ------------ ----------
Cashflows from investing activities
Payments to acquire property, plant
& equipment (95) (180) (353)
Payments to acquire intangible
assets (246) - (190)
Acquisition of subsidiary companies (975) (1,911) (1,911)
Amounts received in respect of
previous acquisitions - 252 252
Cash acquired with acquisitions - 609 609
Net cash used in investing activities (1,316) (1,230) (1,593)
-------------------------------------------- ------------ ------------ ----------
Cashflows from financing activities
=========================================== ============ ============
Repayment of loan facility including
fees (112) (113) (224)
Capital repayment of lease liabilities (144) (237) (453)
-------------------------------------------- ------------ ------------ ----------
Net cash from financing activities (256) (350) (677)
-------------------------------------------- ------------ ------------ ----------
Net decrease in cash and cash equivalents (15) (729) (340)
-------------------------------------------- ------------ ------------ ----------
Cash and cash equivalents at the
beginning of the period 3,036 3,376 3,376
Cash and cash equivalents at the
end of the period 3,021 2,647 3,036
-------------------------------------------- ------------ ------------ ----------
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
SIX MONTHSED 30 SEPTEMBER 2019
1. ACCOUNTING POLICIES
The accounting policies used in the preparation of the unaudited
consolidated interim financial information for the six months ended
30 September 2020 are in accordance with the recognition and
measurement criteria of International Financial Reporting Standards
("IFRS") as adopted by the European Union and are consistent with
those that will be adopted in the annual statutory financial
statements for the year ended 31 March 2021.
While the financial information included has been prepared in
accordance with the recognition and measurement criteria of IFRS,
as adopted by the European Union, these financial statements do not
contain sufficient information to comply with IFRSs.
The accounting policies adopted in the interim financial
statements are consistent with those adopted in the financial
statements for the year ended 31 March 2020.
Exceptional items
The Group presents as exceptional items on the face of the
Statement of Comprehensive Income those material items of income
and expense which the Directors consider, because of their size or
nature and expected non-recurrence, merit separate presentation to
facilitate financial comparison with prior periods and to assess
trends in financial performance. Exceptional items are included in
Administration expenses in the Consolidated Statement of
Comprehensive Income but excluded from Adjusted EBITDA as
management believe they should be considered separately to gain an
understanding of the underlying profitability of the trading
businesses.
Going concern
The Directors have prepared the financial statements on a going
concern basis which assumes that the Group and the Company will
continue to meet liabilities as they fall due.
The Board recognises that whilst the Group is trading in an
uncertain economy following the onset of the COVID-19 pandemic, the
Group has demonstrated in its H1 results both operational and
financial resilience. The Group has an operating model with circa
75% of revenue deriving from contracted managed IT services which
is a continuous service supply to customers and this has been
largely uninterrupted by the impact of COVID-19. Cash conversion
remains strong and the Group has a resilient financial position
with a cash balance of GBP3.02m and a net cash position of GBP1.17m
at 30 September 2020.
The Directors performed stress tests on the Group's financial
forecasts during the period which allowed the Board to assess a
significant downside scenario. The projected trading forecasts and
resultant cashflows, together with the confirmed loan facilities
and other sources of finance, taking account of reasonably possible
changes in trading performance, show that the Group can continue to
operate within the current facilities available to it.
The Directors therefore have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future and they continue to adopt the going
concern basis of accounting in preparing the financial
statements.
2. SEGMENTAL REPORTING
The chief operating decision maker for the Group is the Board of
Directors and the Group reports in two segments:
-- Managed IT Services - this segment provides all forms of
managed services to customers and includes professional
services.
-- Value Added Resale (VAR) - this segment provides all forms of
product and licence sales procured from supplier partners.
The monthly management accounts reported to the Board of
Directors are reviewed at a consolidated level with the operating
segments representative of the business model for growth of
recurring contract income in Managed IT Services and VAR sales as a
complementary business activity. The Board review the results of
the operating segments at a revenue and gross profit level since
the Group's management and operational structure supports these
operational segments as unified Group functions.
All segments are continuing operations and there are no
transactions between segments.
Unaudited Unaudited Audited
six months six months year to
to to
30-Sep-20 30-Sep-19 31-Mar-20
GBP'000 GBP'000 GBP'000
--------------------- ------------ ------------ ----------
Revenue
Managed IT Services 7,462 7,382 15,092
Value Added Resale 1,545 1,878 4,400
9,007 9,260 19,492
--------------------- ------------ ------------ ----------
Gross Profit
Managed IT Services 5,049 5,073 10,281
Value Added Resale 329 399 920
5,378 5,472 11,201
--------------------- ------------ ------------ ----------
3. EARNINGS PER SHARE
Unaudited Unaudited Audited
six months six months year to
to to
30-Sep-20 30-Sep-19 31-Mar-20
GBP'000 GBP'000 GBP'000
Profit/(loss) for the financial year
attributable to shareholders 95 (427) (122)
Adjusted profit for the financial
period 823 562 1,657
Weighted number of equity shares in
issue 51,584,007 49,419,690 51,374,950
Adjusted basic earnings per share
(pence) 1.7p 1.1p 3.4p
Basic earnings per share (pence) 0.2p (0.9p) (0.2p)
Diluted earnings per share (pence) 0.2p (0.9p) (0.2p)
---------------------------------------- ------------ -------------- ------------------
Unaudited Unaudited Audited
six months six months year to
to to
30-Sep-20 30-Sep-19 31-Mar-20
GBP'000 GBP'000 GBP'000
Profit/(loss) after tax used for basic
earnings per share 95 (427) (122)
Amortisation of intangible assets 671 636 1,321
Exceptional items 36 288 475
Share based payments 155 95 199
---------------------------------------- ------------ -------------- ------------------
Tax adjustments (134) (30) (216)
Adjusted profit used for adjusted
earnings per share 823 562 1,657
---------------------------------------- ------------ -------------- ------------------
4. EXCEPTIONAL ITEMS
Unaudited Unaudited Audited
six months six months year to
to to
30-Sep-20 30-Sep-19 31-Mar-20
GBP'000 GBP'000 GBP'000
------------------------------- ------------ ------------ ----------
Integration and restructuring 61 204 390
Acquisitions (25) 84 85
36 288 475
------------------------------- ------------ ------------ ----------
Integration and restructuring costs relate to the exit of the
Bristol office and costs incurred for integrating the Certus
business operations. The credit of GBP25,000 for acquisitions is
the difference between the GBP1m contingent consideration accrued
at 30 March 2020 for the Certus earn-out payment and the sum
actually paid to the Sellers in H1 of GBP975,000.
5. ALTERNATIVE PERFORMANCE MEASURES
Reconciliation of operating profit Unaudited Unaudited Audited
to Adjusted EBITDA six months six months year to
to to
30-Sep-20 30-Sep-19 31-Mar-20
GBP'000 GBP'000 GBP'000
Operating profit/(loss) 176 (265) (28)
Depreciation 369 427 847
Amortisation of intangible assets 671 636 1,321
EBITDA 1,216 798 2,140
------------------------------------ ------------------- -------------- -------------------
Exceptional items 36 288 475
Share based payments 155 95 199
Adjusted EBITDA 1,407 1,181 2,814
------------------------------------ ------------------- -------------- -------------------
Reconciliation of profit before Unaudited Unaudited Audited
tax to Adjusted Profit before six months six months year to
Tax to to
30-Sep-20 30-Sep-19 31-Mar-20
GBP'000 GBP'000 GBP'000
Profit/(loss) before tax 125 (368) (234)
Amortisation of intangible assets 671 636 1,321
Exceptional items 36 288 475
Share based payments 155 95 199
------------------------------------ ------------------- -------------- -------------------
Adjusted Profit Before Tax 987 651 1,761
------------------------------------ ------------------- -------------- -------------------
Cash conversion Unaudited Unaudited Audited
six months six months year to
to to
30-Sep-20 30-Sep-19 31-Mar-20
GBP'000 GBP'000 GBP'000
Operational cashflows 1,557 851 1,930
Adjustments:
Acquisitions, integration and
restructuring cashflows 61 288 492
Cash generated from operations 1,618 1,139 2,422
------------------------------------ ------------------- -------------- -------------------
Adjusted EBITDA 1,407 1,181 2,814
------------------------------------ ------------------- -------------- -------------------
Cash conversion 115% 96% 86%
------------------------------------ ------------------- -------------- -------------------
Net Cash/(debt) Unaudited Unaudited Audited
six months six months year to
to to
30-Sep-20 30-Sep-19 31-Mar-20
GBP'000 GBP'000 GBP'000
Cash balances 3,021 2,647 3,036
Bank loans - current (333) (224) (251)
Bank loans - non-current (951) (1,284) (1,146)
Lease liabilities (566) (861) (708)
Contingent consideration - (1,000) (1,000)
Net Cash/(debt) 1,171 (722) (69)
----------------------------------------- -------------- -------------- -------------------
6. TRADE AND OTHER RECEIVABLES
Unaudited six Unaudited Audited
months to six months year to
to
30-Sep-20 30-Sep-19 31-Mar-20
GBP'000 GBP'000 GBP'000
============================ === ================= ============ =================
Trade debtors 1,469 1,166 1,427
Prepayments and accrued
income 1,023 1,117 1,299
----------------------------------------- --------- ------------ -----------------
2,492 2,283 2,726
----------- --------- ------------ -----------------
7. TRADE AND OTHER PAYABLES
Unaudited six Unaudited Audited
months to six months year to
to
30-Sep-20 30-Sep-19 31-Mar-20
GBP'000 GBP'000 GBP'000
================================= === ================= ============ =================
Trade payables 1,648 1,622 1,847
Corporation tax 237 451 158
Other taxes and social security 992 626 552
Accruals 1,015 876 931
---------------------------------------------- --------- ------------ -----------------
3,892 3,575 3,488
----------- --------- ------------ -----------------
8. ACQUISITIONS
In February 2019, the Company acquired 100% of the share capital
of Certus IT Limited ("Certus"), and the parties agreed an earn-out
mechanism for a period of twelve months post-acquisition based on
profit performance targets. In February 2020 the earn-out period
was completed and Certus successfully achieved the maximum EBITDA
target. The company paid GBP975,000 to the Sellers in full
settlement of the contingent consideration during H1 FY21.
9. AVAILABILITY OF INTERIM REPORT
Copies of this report are available on the Company's website at
http://www.sysgroupplc.com
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END
IR PPGRGGUPUGAG
(END) Dow Jones Newswires
November 23, 2020 02:00 ET (07:00 GMT)
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