6 April 2017
SysGroup plc
("SysGroup" or the "Company" or the "Group")
Trading Update, Board Appointment and Notice of Results
SysGroup PLC (AIM: SYS), the managed services and cloud integrator, is pleased to provide a trading update for the year ended 31 March 2017, together with the announcement of a Board appointment and notice of results.
Group trading performance
The Group has delivered an encouraging trading performance in the year, with revenue and adjusted EBITDA1 expected to be in line with market expectations.
The Group expects to show revenue growth of approximately 62.8% (including discontinued operations) to £7.75m (FY2016: £4.76m) and adjusted EBITDA1 growth of approximately 10% to £0.8m (FY2016: £0.67m). Organic revenue growth from the Company's existing managed services business (excluding the acquisition of System Professional Ltd in the period) was 17%.
Profit before tax is expected to be approximately £0.5m (FY2016: £0.25m), which includes proceeds and the costs of the disposal of the mass market business in July 2016. Adjusted PBT2 is expected to be approximately £0.41m (FY2016: £0.31m)
In July 2016 the Group raised £5m gross by way of a placing and paid £3.3m of initial cash consideration for System Professional Ltd. The sale of the SME business raised £2.7m, less an adjustment for advance payments and receipts of £0.47m. During the period the Group settled part of the Q4Ex Ltd earn-out totalling £0.25m in cash as announced on 14 February 2017, and also funded various re-organisation costs in the period.
Cash at the year end was approximately £3.47m (FY2016: £0.51m) and the Group continues to enjoy low levels of debt, resulting in a net cash position of £3.02m (FY2016: net debt £0.21m).
Integration and restructuring
During the period the Group successfully acquired System Professional Ltd, a managed services provider, and disposed of its legacy mass market business. These transactions were part of the Group's stated strategy of becoming a leading provider of Cloud and Managed Services.
The disposal of the mass market business and associated restructuring is now fully completed. The Company continues to progress the integration of System Professional Ltd and this will be accelerated during H1 FY18.
Given the strong cash position, the unutilised £2.5m committed acquisition facility and low levels of existing debt, the Group is well placed to supplement organic growth with further acquisitions.
Board appointment
On 23 January 2017, the Group announced the Non-Board appointment of Julian David Llewellyn as Chief Financial Officer. The Board is now pleased to confirm his formal admission to the Board of Directors of SysGroup PLC, effective immediately.
Notice of Results
The Board looks forward to providing further detail at the time of full year results expected to be on Wednesday 7th June, 2017.
Chris Evans, Chief Executive commented: "The Group has delivered against its objectives for the 2017 financial year. The year has seen significant change as the business continued its transition to a Managed Services provider, and we believe the Group has established the right platform, expertise and service offering to capitalise on the substantial market opportunity available to us. I would like to thank all our staff and stakeholders for their continued support as we further progress our growth strategy. We start the new financial year in a strong position and the Board remains optimistic about the Group's long-term prospects."
(1) Adjusted EBITDA, which is referred to throughout this announcement, is earnings before interest, taxation, depreciation, acquisition and integration costs, fair value adjustments and share based payments.
(2) Adjusted PBT is profit before taxation after adding back share based payments, amortisation on acquired intangibles and exceptional costs
This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.
For further information please contact: SysGroup plc Chris Evans, CEO Julian Llewellyn, CFO |
Tel: 0151 559 1777 |
Shore Capital (Nomad and Broker) Bidhi Bhoma / Edward Mansfield |
Tel: 020 7408 4090 |
Alma PR (Financial PR) Josh Royston / Hilary Buchanan / Helena Bogle |
Tel: 020 8004 4218 |
About SysGroup
SysGroup is a leading provider of Cloud Hosting, Managed Services and expert IT Consultancy. The Group delivers solutions that ensure clients understand and benefit from industry-leading technologies and advanced hosting capabilities. The SysGroup team focuses on a customer's strategic and operational requirements - enabling them to free up resources, grow their core business and avoid the distractions and complexity of delivering IT services.
The Group has offices in Liverpool, Coventry, London and East Sussex.
For more information, visit http://www.sysgroup.com
Additional Information
Under schedule 2, paragraph (g) of the AIM rules, the following additional information is disclosed:
Mr Llewellyn, 47, is currently is a director of Octempo Receivables Management Ltd and Sworton Heath Associates Ltd. Within the last 5 years Mr Llewellyn also served as a Director of Greenergy Fuels Ltd and Greenergy Flexigrid Ltd. There are no other matters to be disclosed under Schedule 2 (g) of the AIM Rules.
