SysGroup PLC – SYS – Final Results

SysGroup PLC (AIM:SYS), the multi award-winning managed IT services and cloud hosting provider is pleased to announce its audited final results for the year ended 31 March 2020.

HIGHLIGHTS

Financial

Operational

·      Successful COVID-19 response and transition of all employees to home working with continuation of services to customers

·      Acquisition of Hub Network Services Limited for £1.45m in cash; integration completed in under three months

·      New Executive Operational Board and Senior Leadership Team following the integration of Certus IT  Limited

·      Introduction of Customer Engagement plan demonstrating >97% satisfaction

·      Increased investment in sales and demand generation training

·      Planned closure of legacy Coventry office and datacentre complete

Post period-end developments

·      Business continuity plans successfully implemented and remote working facilitated across the business in response to the COVID-19 pandemic, with minimal impact to operations

·      Strategic sales engagement relating to digital transformation with both new and existing customers has increased although the Group is seeing some major asset refreshes and contract renewal decisions being delayed

·    Strong balance sheet with a cash balance of £3.0m and a net cash⁴ balance of £0.45m at 31 March 2020. The Group has facilities of £5m expiring in 2024, consisting of a £1.75m term loan which has £0.35m of headroom at 31 March 2020 and an undrawn £3.25m acquisition revolving credit facility, providing the Group with additional available liquidity to execute on acquisition opportunities.

1.     Adjusted EBITDA is earnings before interest, taxation, depreciation, amortisation of intangible assets, exceptional items, and share based payments.

2.     Adjusted profit before tax (“Adjusted PBT”) is profit before tax after adding back amortisation of intangible assets, exceptional items, and share based payments.

3.     Adjusted Basic EPS is profit after tax after adding back amortisation of intangible assets, exceptional items, share based payments and associated tax, divided by the number of shares in issue

4.     Net cash represents cash balances less bank loans, lease liabilities and contingent consideration, and excludes IFRS16 lease liabilities.

Adam Binks, Chief Executive Officer, commented:

“FY20 has been another year of considerable growth, in which we delivered increased revenues and EBITDA, whilst integrating our largest acquisition to date. Despite COVID-19 dominating the end of the financial year, I have been impressed with how the team have continued to support and service our customers during these challenging circumstances.

While there is still uncertainty around the impact of COVID-19, we believe it has presented us with significant opportunities. We have seen an accelerated shift towards flexible and remote working practices, with investment in the appropriate technology becoming ever more mission critical. Businesses are now seeing, more than ever before, the value of outsourced managed IT services and are looking to trusted providers to help them navigate the complexities of the technological landscape. I am confident we are well positioned to support our customers through this period of change which will be further underpinned by our buy-and-build strategy.

As we look ahead, I remain optimistic for continued growth, supported by a robust balance sheet, a diverse customer base and the growing relevance of our solutions. I am pleased to be able to report that, underpinned by our strong levels of recurring revenue, momentum in the first months of FY21 trading has continued.”

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