System1, the marketing services group, issues the following update on trading for the six months to end-September 2019. The Company will announce its interim results on 7 November 2019.
The first half of the current year (H1) saw Gross Profit (our main top-line performance indicator) growing modestly. Gross Profit for the half-year is expected to be some 7% above the comparable 2018/19 period (4% at constant exchange rates).
Operating Costs were well controlled, benefiting from our ongoing drive to increase efficiency across the business. Excluding investment in AdRatings (the Company's database of advert ratings), Operating Cost growth was some 3%.
Normalised H1 Pre-tax profits, excluding AdRatings and share based payments, are expected to be some £2.4m, approximately 24% higher than in the comparable period.
A total of £1.2m, modestly below budget, was invested in further expanding our AdRatings asset during H1. System1's financial position remains strong. Despite continued relatively high levels of investment and the payment of the 2018/19 final dividend during H1, the period-end cash balance was £4.1m, compared with a cash balance of £4.3m at the end of March 2019. System1 has no debt.
As well as ongoing investment in AdRatings, the Company continues to invest in its IT infrastructure and data capability. System1 also strengthened its senior management team during the first half. Key new hires include a Chief Commercial Officer (Karen Wolfe, formerly at Nielsen) and a Chief Marketing Officer (Jon Evans, formerly at Lucozade Ribena Suntory), both of whom joined System1 towards the end of the half year.