System1 keeps control of costs as gross profit rises
Marketing services provider System1 Group said gross profit was ahead “modestly” in its first half in a trading update on Monday, with the board saying it expected it to be around 7% higher year-on-year, or 4% at constant exchange rates.
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The AIM-traded firm said operating costs were “well-controlled” in the six months ended 30 September, benefiting from its ongoing drive to increase efficiency across the business.
Excluding investment in its advertising ratings database product ‘AdRatings’, operating cost growth was said to be around 3%.
Normalised first half pre-tax profits, excluding AdRatings and share-based payments, were anticipated to be about £2.4m - approximately 24% higher than in the comparable period.
A total of £1.2m was invested in further expanding the AdRatings asset during the first half, which the board described as “modestly below budget”.
System1 said its financial position remained “strong”, explaining that despite continued relatively high levels of investment and the payment of the 2019 final dividend during the half-year, the period-end cash balance was £4.1m, compared to £4.3m at the end of March.
The board confirmed that the company had no debt.
“As well as ongoing investment in AdRatings, the company continues to invest in its IT infrastructure and data capability,” the board said in its statement.
“System1 also strengthened its senior management team during the first half.”
It noted that key new hires included a chief commercial officer in Karen Wolfe, formerly at Nielsen, and a chief marketing officer in Jon Evans, formerly at Lucozade Ribena Suntory, both of whom joined System1 towards the end of the half.
The company said it would announce its interim results on 7 November.