System1 Group PLC – Financial results to 31 March 2019

System1 Group PLC – Financial results to 31 March 2019

System1, the international marketing and market research agency, today announces its results for the 12 month period ended 31 March 2019.

As previously announced, the Company is making a significant investment in a new business line “AdRatings” and, for ease of prior year comparisons, is splitting its results into the existing business (“Consulting”) and AdRatings. 

12 months ended 31 March

2018/19

2017/18

£m

Consulting

AdRatings

Total

Revenue

26.90

26.90

26.94

Gross Profit

22.05

22.05

22.23

Underlying Overheads

(18.35)

(2.22)

(20.57)

(20.18)

Underlying Profit Before Tax/(Loss)

3.70

(2.22)

1.48

2.05

Share Based Payments*

0.20

0.20

(0.07)

Exceptional Credit*

0.25

0.25

Finance income

0.01

Profit Before Tax/(Loss)

4.15

(2.22)

1.93

1.99

* See notes 10 and 25

Highlights

  • Revenue flat at £26.90m, flat in constant currency
  • 1% decline in Gross Profit to £22.05m (2017/18: £22.23m), 1% in constant currency
  • 80% growth in Underlying Profit Before Tax (excluding AdRatings) to £3.70m (2017/18: £2.05m)
  • Profit Before Tax (including AdRatings) stable at £1.93m (2017/18: £1.99m)
  • 4% growth in Profit After Tax (including AdRatings) to £1.26m (2017/18: £1.21m)
  • 3% growth in diluted Earnings Per Share to 9.8p (2017/18: 9.5p)
  • £3.03m investment in AdRatings, of which £0.81m has been capitalised and £2.22m expensed
  • £4.32m Cash at 31 March 2019 and no debt (31 March 2018: £5.78m and no debt)Final dividend 6.4p per share (total dividend for 2018/19 7.5p per share, same as 2017/18).

Commenting on the Company’s results, John Kearon, Chief Executive Officer of System1, said:

 ‘The previous year, our first as System1, was a painful one, but with the support of our future-focussed investors and dedicated staff, we held our nerve and pushed on with the work needed to turn our intellectual leadership into a scalable business, capable of becoming the industry leader over time. 

This year’s results may not be spectacular, but they were significant. Flat revenues, 7% growth in Ad Testing, a 23% increase in the number of clients and 5% growth in H2 revenues against H2 2018, leave us cautiously optimistic the changes are working. Increased productivity and efficiency from our product, process and technology enhancements, saw Underlying Profit Before Tax grow by 80%. We’re looking forward to what we can achieve in the years ahead, both from established products and new offerings such as AdRatings.’

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