Trading Update

RNS Number : 3486O

System1 Group PLC

18 August 2017

 

Press Release

18 August 2017

System1 Group PLC (AIM: SYS1)

formerly BrainJuicer Group PLC

("System1", or "the Company", or "the Group")

Trading Update

At the Annual General Meeting of the Company this morning, Ken Ford, Chairman, will make the following comments on trading relating to the current financial year ending 31 March 2018:

"The slower than expected start to our financial year which we noted at the time of the announcement of our 2016/17 results on 15 June 2017 has continued since then, and we now expect H1 Gross Profit (our main top line performance indicator) to be 6-11% lower than prior year.  This is mainly due to non-recurrence of large one-off Innovation projects as a result of some significant client spending deferrals and a more competitive market, although there have been some more encouraging signs recently.  Meanwhile we are continuing to refine our Innovation product offering (Predictive Markets), with a relaunch planned in Q3 of our financial year.  Notwithstanding this slow start and our lack of revenue visibility, we expect Gross Profit to move back to growth in H2.

We expect that H1 2017/18 costs will be some 15% higher than last year.  This reflects continued investment in senior hires in the US, which we referred to in our full year results announcement, to support future growth in both our Research and new Advertising Agency businesses.  The H1 cost increase also includes one-off severance costs which will result in savings of around £0.5m per annum in H2 and beyond.  Over the financial year as a whole, costs are currently expected to grow by around 10%.

As of now, we anticipate a little over break-even in Profit Before Tax in H1 (prior year: £2.8m) and a decline in full year Profit Before Tax of approximately 10-15% from the £6.3m achieved last year.

We will provide an update in early October, and a more detailed report  with our H1 results announcement on 31 October 2017.

The Company can be found at www.system1group.com.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.  Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For further information, please contact:

System1 Group PLC	Tel: [phone]
John Kearon, Chief Executive Officer
James Geddes, Chief Financial Officer
Canaccord Genuity Limited	Tel: [phone]
Simon Bridges / Emma Gabriel

 

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