Sysgroup loss widens but revenue soars on acquisitions

Sysgroup on Monday reported a widening of its interim loss due to rising costs, but revenue surged thanks to new acquisitions.

The IT services provider booked a loss before tax of £0.4m for the six months ended 30 September, 6% wider than in the same period last year, as administrative expenses jumped 49% to £5.7m and cost of sales rose 71% to £3.8m.

The AIM-traded company also recorded exceptional costs of £0.3m, up 22%, due to costs associated with acquisitions, integration, restructuring and property exit costs for the planned closure of the Coventry office.

Even so, turnover surged by 60% to £9.3m due to contributions from Certus IT and Hub Network Services, which performed in line with expectations after being snapped up in February and June respectively.

Sysgroup said it had maintained good control of the cost base with operating expenses as a percentage of revenue having reduced by 6% to 46%, with this improvement expected to be maintained throughout the remainder of the year.

Chief executive Adam Binks said: "The operational and structural improvements that we continue to make will further benefit the business as it continues to scale and we have a proven ability to identify, attract and integrate good businesses to add to our platform, alongside the appetite to do so.

"I am pleased to report that the group continues to perform in line with our expectations as we continue to execute on our growth strategy."

Sysgroup shares were down 2.78% at 35.00p at 1012 GMT.