3 December 2025

SysGroup plc
("SysGroup" or the "Company" or the "Group")

Half year results for the six months ended 30 September 2025

SysGroup plc (AIM:SYS), the trusted partner for cloud, cybersecurity, and AI enablement, delivering end to end solutions at the intersection of cybersecurity and digital transformation for the UK mid-market, is pleased to announce its unaudited half year results for the six months ended 30 September 2025 ("H1 FY26" or the "Period").

Strategic & Operational Highlights

·      Strategic shift to a consultative, end-to-end Go-To-Market ("GTM") approach is delivering tangible results

·      Cybersecurity represents a significant and fast-growing revenue stream for the Group, today comprising 47% of revenue in the Period

·      Secured a three-year Managed IT Services and technology refresh contract with a major UK non-profit institution

·      Managed IT Services revenue stabilised and is now well positioned to return to growth after two years of decline

·      AI is now our operational model, embedding tools, workflows, and culture across the business

·      Significant improvement in service quality and customer satisfaction, supported by AI and operational changes

·      AI delivering measurable ROI - service desk reduced from 36 to 22; throughput per engineer increased 17%

·      Headcount reduction from 111 in FY23 to 80 by end of FY26, delivered alongside strengthening technical capabilities and successful integration of an acquisition

Financial Highlights

·      Revenue £9.9m (H1 FY25: £10.2m); 10% growth in Q2 over Q1

·      Net Managed IT Services down sell reduced from £1.7m in FY25 to £0.3m run rate projected for FY26

·      Managed IT Services including professional services increased to 92.3% of total revenue (H1 FY25: 86.3%)

·      Gross margin 48.5% (H1 FY25: 49.6%) maintaining margin level

·      Adjusted EBITDA¹ of £0.2m (H1 FY25: £0.4m)

·      Statutory loss before tax of £1.6m (H1 FY25: loss before tax of £1.1m)

·      Net cash² of £3.1m at 30 September 2025 (30 September 2024: net cash² of £4.6m)

Heejae Chae, Executive Chair, commented:

"SysGroup has continued to make strong progress in transitioning to an advisory-led, end-to-end Managed IT Service Provider ("MSP") delivering tangible results. Our cybersecurity consulting capability, acquired last year, is enabling earlier engagement and unlocking deeper cross-sell opportunities reflected in increasing revenue pipeline. Service quality, customer satisfaction and retention have improved significantly, and Managed IT Services revenue has now stabilised and is positioned for a return to growth in FY27. 

AI has become central to how we operate. It is embedded across our workflows, our data, and our culture, and is already delivering tangible results: higher service quality, faster resolution, lower operating cost and a more productive workforce. The efficiency gains and service improvements achieved in the past year validate the value creation potential of an AI-enabled MSP. The MSP sector itself is at a crossroads. Customer expectations are rising, technology complexity is increasing, and traditional service models are under margin pressure. This creates a once-in-a-generation opportunity to redefine what an MSP can be. SysGroup is seizing that opportunity, building a scalable, consultative, AI-powered platform capable of leading the transformation of our sector.

Looking ahead, we expect a stronger H2 than H1, with improved EBITDA driven by AI-enabled efficiency and productivity gains. Full-year performance is expected to be in line with expectations. With a streamlined operating model, stronger customer engagement and increasing demand for cybersecurity and AI-readiness, SysGroup is well positioned for margin expansion and a return to growth in FY27."

Notes

1.     Adjusted EBITDA is earnings before interest, taxation, depreciation, amortisation of intangible assets, impairment of intangibles, exceptional items, share based payments and share scheme set up costs

2.     Net cash / (debt) represents cash balances less bank loans and lease liabilities

About us

SysGroup plc delivers a consultative, end-to-end GTM approach that blends expert advisory services with AI-driven data solutions. Our integrated capabilities, spanning connectivity, cloud hosting, data delivery, analytics, governance and security, enabling customers to modernise and transform with confidence.

The Group has offices in Edinburgh, London, Manchester and Newport.

For more information, visit http://www.sysgroup.com

Overview and Strategy

SysGroup has continued to make strong progress in its transition to an advisory-led, end-to-end MSP, delivering tangible results.  This advancement has strengthened the Group's capability to deliver integrated solutions across its portfolio, aligning service delivery, customer engagement, and commercial strategy behind a unified GTM approach. As a result, SysGroup is better positioned to deliver comprehensive value to clients throughout the entire technology lifecycle, from initial advisory and solution design through to deployment and ongoing Managed IT Services.

Following last year's acquisition of the business and assets of Crossword Consulting Ltd ("Crossword"), the consulting offering continues to be a major growth engine, expanding the advisory-led GTM approach and unlocking new cross-selling opportunities across the broader customer base. By leading with expertise and risk-focused guidance, the business is strengthening customer trust and increasing wallet share, whilst also creating a more resilient revenue model built on strategic engagements rather than transactional services.

Cybersecurity overall (consulting and managed security solutions) now accounts for 47% of total revenue, reflecting its importance as both a standalone service line and a complementary capability that enhances the value of the Group's managed services portfolio. This contribution underscores the increasing market demand for robust security posture improvement and continuous threat management.

During the period, the Group has secured a significant three-year Managed IT Service contract and a major technology refresh project with a large UK non-profit institution. This win highlights the strength of the Group's proposition and demonstrates its ability to deliver modernisation programmes that enhance performance, reliability, and cost efficiency for large-scale clients.

Managed IT Services revenue has stabilised and is showing clear momentum toward renewed growth following two consecutive years of decline. This recovery is driven by improved customer retention, strengthened service offerings, and the positive impact of the consultative MSP model. The business is also seeing increased interest from both new and existing clients seeking long-term partnerships to address evolving technology and security needs.

Service quality and customer satisfaction have improved significantly, supported by ongoing operational enhancements and the integration of AI across key workflows. These improvements are delivering faster resolution times, more proactive support, and a consistently better customer experience. The Group's focus on operational excellence continues to translate directly into stronger client relationships and better commercial outcomes.

Commercial and service performance have both improved through the adoption of AI-enabled sales, customer success management, and cross-sell tools. These systems provide enhanced insights into customer needs, increase lead-generation efficiency, and support more precise targeting of value-added services, resulting in improved revenue conversion and deeper client engagement.

The Group has developed an AI-enabled onboarding workflow that brings together various tools to standardise the integration of both new and legacy acquisition customers. This corrects historical inconsistencies, improves service quality and creates a unified operating environment. At the centre of this is our emerging AI Conductor, which acts as a learning flywheel, continuously improving, as more customers are onboarded. Over time, this will become a powerful integration engine for future acquisitions, enabling us to absorb targets faster, at lower cost, and with materially less disruption.

AI has become central to how we operate. It is embedded across our workflows, our data, and our culture, and is already delivering tangible results. AI-enabled efficiencies and operational optimisation are supporting a leaner, more productive workforce, delivered alongside an expansion of the Group's technical capabilities and the successful absorption of an acquisition, demonstrating the scalability of our new operating model. We are driving these improvements through data-driven decision-making, comprehensive workflow mapping and the integration of AI tools that enhance quality, efficiency and organisational productivity. By harnessing rapid advances in AI and aggregating the most effective tools into operational solutions, we are building a modern, scalable platform designed to continuously improve service and support future growth.

The MSP sector itself is at a crossroads. Customer expectations are rising, technology complexity is increasing, and traditional service models are under margin pressure. This creates a once-in-a-generation opportunity to redefine what an MSP can be. SysGroup is seizing that opportunity, building a scalable, consultative, AI-powered platform capable of leading the transformation of our sector.

Results and Trading

In H1 FY26, the Group delivered revenue of £9.9m (H1 FY25: £10.2m) and Adjusted EBITDA of £0.2m (H1 FY25: £0.4m). Managed IT services (including professional services), performed strongly, increasing to £9.2m (H1 FY25: £8.8m), up 4.6% year on year, supported by the successful integration of the Crossword acquisition completed in H2 FY25. Value Added Resale ("VAR") revenue declined to £0.8m (H1 FY25: £1.4m). This change is reflected in the revenue mix for H1 FY26, with Managed IT Services representing 92.3% of total revenue and VAR just 7.7% (H1 FY25: 86.3% / 13.7%).

Gross profit was £4.8m (H1 FY25: £5.0m), with only a modest reduction in gross margin to 48.5% (H1 FY25: 49.6%). Adjusted operating expenses remained flat at £4.6m (H1 FY25: £4.6m), despite the addition of nine employees from the Crossword acquisition in H2 FY25, reflecting the efficiencies delivered across both people and processes.

The consolidated income statement includes £0.3m of exceptional costs (H1 FY25: £0.4m), primarily relating to restructuring activities. The share-based payments charge increased to £0.3m in H1 FY26 following the introduction of new Group incentive plans in H2 FY25.

Net finance costs rose to £0.2m (H1 FY25: £0.0m), with the prior period reflecting interest income earned on higher cash balances held after the £10.6m (net of transaction costs) equity raise completed in June 2024.

The Group delivered a statutory loss before tax of £1.6m (H1 FY25: loss before tax £1.1m).

The taxation credit of £0.4m (H1 FY25: credit of £0.3m) represents the movement on deferred tax in the Period with no corporation tax charge arising on the Group's trading position in H1 FY25.

Adjusted basic loss per share was (0.1)p (H1 FY25: 0.0p) and basic loss per share was (1.4)p (H1 FY25: loss per share (1.2)p).

Cashflow and Net Debt

The Group's cash balance was £8.1m at 30 September 2025, compared with £8.7m at 31 March 2025. The debt facility remained at £4.8m (31 March: £4.8m), resulting in a net cash position of £3.1m (31 March 2025: £3.5m) after deduction for lease liabilities and contingent consideration. On top of available cash, the Group still retains £3.2m of unutilised banking facility headroom. 

Cash outflow from operations improved to £(0.2)m (H1 FY25: £(0.5)m). Net cash outflows from investing activities were £0.0m, consistent with H1 FY25 (outflow of £(0.1)m). 

Net cash outflows from financing activities totalled £(0.4)m, primarily reflecting £0.3m of lease and RCF interest payments and £0.1m of deferred consideration relating to the Crossword acquisition completed in H2 FY25. In comparison, H1 FY25 saw a net cash inflow from financing activities of £8.5m, driven by the £10.6m equity raise, partially offset by the £1.8m Truststream earn-out payment and £0.3m of lease and RCF interest payments.

CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME

SIX MONTHS ENDED 30 SEPTEMBER 2025

All the results arise from continuing operations.

CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2025

CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY

SIX MONTHS ENDED 30 SEPTEMBER 2025

The following describes the nature and purpose of each reserve within equity:

CONSOLIDATED CONDENSED STATEMENT OF CASHFLOWS

 SIX MONTHS ENDED 30 SEPTEMBER 2025

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

SIX MONTHS ENDED 30 SEPTEMBER 2025

1.    ACCOUNTING POLICIES

The accounting policies used in the preparation of the unaudited consolidated condensed financial information for the six months ended 30 September 2025 are prepared in accordance with UK adopted International Financial Reporting Standards ("IFRS") and are consistent with those that will be adopted in the annual statutory financial statements for the year ended 31 March 2026.

Whilst the financial information included has been prepared in accordance with the recognition and measurement criteria, in accordance with UK adopted International Financial Reporting Standards, these consolidated condensed financial statements do not contain sufficient information to comply with IFRSs.

The financial information for the six-month period ended 30 September 2025 and 30 September 2024 does not constitute statutory accounts within the meaning of Section 434(3) of the Companies Act 2006 and is unaudited. The comparative financial information for the year ended 31 March 2025 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2025 have been filed with the Registrar of Companies. The Independent Auditor's Report on that Annual Report and Financial Statements for 2024 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

This Interim Report has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The Interim Report should not be relied on by any other party or for any other purpose.

This unaudited interim financial information has been prepared in accordance with the requirement of the AIM Rules for Companies and in accordance with this basis of preparation.

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 (Note 4) 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 Group has an operating model with a high level of resilience with 92.3% of revenue deriving from contracted Managed IT Services which are business critical supplies to customers. The Group has a gross cash balance of £8.1m and a net cash position of £3.1m at 30 September 2025. The Group has undrawn RCF facilities available of £3.2m which can be used for working capital and acquisitions, and an unutilised overdraft facility of £0.5m. The Group is forecasting to generate healthy operational cashflows and achieve the bank loan covenants for the full period of the forecast to March 2027.  

The Directors have reviewed the Group's financial forecasts and reviewed against the backdrop of the current UK economic outlook. The projected trading forecasts and resultant cashflows, together with the confirmed loan and overdraft facilities, 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 is for sales of IT hardware and licences procured from supplier partners

The monthly management accounts reported to the Board of Directors are reviewed at a consolidated level and the Board review the results of the operating segments at a revenue and gross profit level since the Group's management and operational structure operate as unified Group functions. In this respect, assets and liabilities are also not reviewed on a segmental basis. All assets are located in the UK. All segments are continuing operations and there are no transactions between segments, and all revenue is earned from external customers. The business segments' gross profit is reconciled to profit before taxation as per the consolidated income statement. The Group's overheads are managed centrally by the Board and consequently there is no reconciliation to profit before tax at a segmental level.

3.    EARNINGS PER SHARE

3.    EARNINGS PER SHARE (continued)

The tax adjustments relate to current and deferred tax on the amortisation of intangible assets, exceptional items and share based payments.

4.    EXCEPTIONAL ITEMS

The integration and restructuring costs in the period relate to employee exit costs and professional service fees incurred when restructuring the Group's workforce. These costs are considered material and non-recurring and have therefore been classified as exceptional.

The M&A projects expenditure relate to costs associated with the evaluation of potential acquisition targets. This is considered material and has therefore been classified as exceptional.

The supplier charges in dispute are subject to ongoing action for which the Company is pursuing recovery. These costs are considered non-recurring and exceptional and are therefore classified as exceptional.

All of the items above, based upon the judgment of the management team, meet the definition of an exceptional item as defined within the Group's accounting policies.

5.    FINANCE COSTS

6.    ALTERNATIVE PERFORMANCE MEASURES

7.    INTANGIBLE ASSETS

8.    TRADE AND OTHER RECEIVABLES

9.    TRADE AND OTHER PAYABLES

10.  BANK LOAN

The Group has an £8.0m revolving credit facility with Santander of which £4.8m is drawn down at 30 September 2025. The banking facility has a term of five years to April 2027, an interest rate of Base Rate +3.25% margin on drawn funds and covenants that are tested quarterly relating to total net debt to adjusted EBITDA leverage and minimum liquidity.

11.  SHARE CAPITAL

12.  AVAILABILITY OF INTERIM REPORT

This report is available on the Company's website at http://www.sysgroup.com.