Trading Statement

29 Aug 2007 07:01

SciSys PLC29 August 2007 SciSys plc ("SciSys" or the "Company") TRADING STATEMENT SciSys plc (stock code: SSY) - the specialist supplier of IT services hasreleased the following trading statement today ahead of its interim resultsannouncement on 18 September. As part of its AGM trading update in May the Board of SciSys reported that therewere issues on two major contracts. The statement noted that the resolution ofthese issues would adversely impact the results for the first half of thecurrent year. The Board has now reached final agreement on the contractualissues. Regrettably, the full impact is more extensive than had been estimatedin May and is expected to have an adverse impact on both halves of 2007. The Board is further disappointed to announce that since the statement in Maythere has been a delay to the award of a number of new and follow on contractswhich the Board expected to secure in the defence sector. SciSys' cost base hasalready been re-structured to accommodate this reduced level of business. As a result of these issues, the Board now anticipates a significant reductionin revenues against current market expectations for the year. The profits of thebusiness for the year are also expected to be materially affected SciSys' underlying business remains strong, and it continues to win businessfrom both existing and new clients. Contracts in the first half year totallingover £9m have been secured with long-standing customers across all 4 operationalsectors. Contracts with new customers include work with 5 Non GovernmentalOrganisations and 2 major aerospace companies. The Company's balance sheet also remains strong. In particular, cash reservesremain similar to the levels reported in December 2006 and the Board iscommitted to use these to enhance shareholder value. Plans in this area arewell advanced and the Board is pleased to announce that it is very close tocompleting a substantial acquisition. The planned acquisition is consistent withthe Board's stated corporate strategy to broaden markets, both geographicallyand vertically, and to build the business based on expert knowledge and IPR. Thetarget business is highly compatible with SciSys current operations, offeringbespoke and product based software solutions to blue chip customers in wellunderstood markets. There is also a strong cultural compatibility between thetwo companies. Management is confident that this provides an immediateopportunity to enhance earnings and drive growth. The Board expects to be ableto provide full details of the completed transaction by the interim resultsannouncement. Whilst the Board is clearly disappointed by the issues highlighted in the firstpart of this trading statement, it is nevertheless very encouraged at both thepotential of the acquisition and the continuing fundamental strengths of thebusiness. SciSys continues to build on its excellent long term relationshipswith major blue chip customers and, through the remainder of 2007 and beyond,looks forward to sustainable profitable growth. For further information please contact: SciSys Plc Mark Hampson, CEO T: +44 (0) 1249 466 466Chris Cheetham, FD Landsbanki Securities (UK) Ltd Ian Dighe T: +44 (0) 207 426 9000Simon Bridges This information is provided by RNS The company news service from the London Stock Exchange