SSY.L Regulatory News (SSY)

28 January 2016

SCISYS PLC

(SSY: AIM)

Pre-close Trading Update

SCISYS PLC ('SCISYS', the 'Group' or the 'Company'), the supplier of bespoke software systems, IT-based solutions, web and mobile application development, and support services to the Space, Defence, Media & Broadcast, Government and Commercial sectors, is pleased to announce a trading update for the year ended 31 December 2015 prior to entering its close period.

Trading

The Directors are encouraged by the performance of the Group during the second half of 2015 and believe that the underlying results will comfortably meet current market guidance.

Despite the continuing headwinds created by adverse foreign exchange movements, the Group's trading performance for the second half of the year indicates that the Board's previously-expressed confidence, that problems encountered in the first half were a temporary anomaly, was well founded. As announced on 14 October 2015, the isolated contract that had been the cause of the problems was brought to a mutually satisfactory conclusion, ensuring that SCISYS could fully focus its efforts on its unaffected activities which represented the vast majority of the Group's projects.

In its announcement on 4 September 2015, which provided an update on the Group's banking position, the Board expressed confidence that SCISYS would achieve the required minimum level of EBITDA in 2015 for its bank to waive the covenant breach resulting from the guidance downgrade in June 2015. All current indicators point to this threshold being comfortably exceeded, further reinforcing the strong relationships the Company has with its lenders. The Group's net debt at the year-end was lower than consensus forecasts at £1.0m. 

Several key contract wins during the final quarter of 2015 contributed to a healthy opening order book for 2016 and this is further supported by an encouraging pipeline of potential new business prospects. SCISYS continues to recruit appropriately skilled staff in both the UK and Germany to expand its delivery capacity.

Outlook

The Directors remain confident that current market guidance for 2016 will be achieved. Although we anticipate that the relative weakness of the euro will continue to have an impact on our financial performance in 2016, we have implemented currency hedging contracts to mitigate the risk and this is reflected in the guidance.

Commenting, Chairman of SCISYS, Mike Love, said:

"After a challenging first half of 2015 it is pleasing to confirm a recovery in the second half and the establishment of a solid platform for returning to the levels of profit and margin expectations in 2016 and beyond that investors have experienced in the recent past and can reasonably expect going forward."

Results

SCISYS expects to report its preliminary results for the year ended 31 December 2015 on 31 March 2016.

Investor Lunch Programme

SCISYS will be holding a series of Investor Lunches in London, Bristol, Birmingham and Leeds for Private Client Investment Managers and Private Investors. Those wishing to attend should contact Tom Cooper on tom.cooper@walbrookpr.com or 020 7933 8780 or 0797 122 1972 for further details.

For further information please contact:

About SCISYS:

Employing nearly 450 staff, SCISYS group is a leading developer of Information and Communications Technology services, e-Business, web and mobile applications and advanced technology solutions. The Company operates in a broad spectrum of market sectors including Media & Broadcast, Space, Government and Defence and Commercial sectors. SCISYS clients are predominantly blue chip and public sector organisations. Customers include the Environment Agency, the Ministry of Defence, Airbus Defence & Space, Arqiva, Vodafone, the European Space Agency, Eumetsat, the BBC, RNLI, AON, Halfords, Interflora and the National Trust. The Company has UK offices in Chippenham, Bristol, Leicester and Reading and two offices located in Germany. More information is available at www.scisys.co.uk