SysGroup flags fall in first-half revenue

(Sharecast News) - Managed information technology and cloud service provider SysGroup said in a trading update on Friday that it expected to report first half revenue of £7.58m, 15.8% lower year-on-year.

The AIM-traded firm noted at the time of its 2021 final results that customers had continued to defer and curtail expenditure decisions as a result of the pandemic, with its sales teams continuing to face restrictions in their ability to have in-person interactions with customers and prospects to develop the pipeline.

Operationally, performance was described as "robust" in the six months ended 30 September.

SysGroup said it was still benefiting from lower overheads as a result of integration synergies delivered from past acquisitions, with the group "diligently managing" its operations while continuing to invest in the business as required.

As a result, the group said it expected adjusted EBITDA to be £1.34m for the first half, which was in line with management expectations, and down slightly from the £1.41m it reported a year earlier.

The group said it ended the half-year with a "very healthy" net cash position of £1.96m, up £1.17m year-on-year.

"Whilst the economic uncertainty of last year has continued through the first half and has affected customer decision making, I am pleased to report that our adjusted EBITDA performance is in line with our expectations," said chief executive officer Adam Binks.

"Our team's dedication to delivering for our customers has been excellent and I thank them for their hard work during the first half of the year.

"The long-term outlook for our business and market remains very positive and we are continuing to see an increasing number of companies seeking to move towards cloud rather than on-premise solutions."

Binks said it expected IT projects and investment decisions, as a business-critical agenda item, to recover strongly once there was more certainty around the economic environment and the ongoing impact of Covid-19.

"The board remains confident that adjusted EBITDA for the current financial year will be in line with its expectations."

SysGroup said it would publish its half-year results for the six months ended 30 September on 22 November.

At 1454 BST, shares in SysGroup were down 12.12% at 29.44p.