Sysgroup Share Discussion Threads

[hedgehog 100] 22/11/2021 09:42

ScepticalInvestor22 Nov '21 - 08:01 - 254 of 255 0 0 0
"So it meets their previous profit warning update iow"


There wasn't a profit warning.
They said that revenues would be lower, but profit in line with expectations, which they have repeated today.

The same profit on lower revenues means that margins are increasing.

Early this year I saw a company announce that revenues would be higher than expected, but profit the same, and the shares tanked because of worries about falling margins!

Improved margins are a sign of competitive strength.

And when SYS starts increasing revenues, it will have a double winner.

[weatherman] 22/11/2021 09:37

The market cap figure given by ADVFN is wrong.

[masurenguy] 22/11/2021 09:32

Goes to show how illiquid this is - not a single trade in the first 90 minutes after issuing their interims. The business is profitable and over 50% of the current market value is in net cash !

[scepticalinvestor] 22/11/2021 08:01

So it meets their previous profit warning update iow

[rivaldo] 22/11/2021 07:35

Good to see the confidence in meeting expectations. On track for around 3p-3.5p EPS, with a healthy almost £2m cash pile and confidence that growth will return in what is now a critical sector for every company.

Just a question of time and a little patience.

[masurenguy] 22/11/2021 07:08

Steady as they go !

Interim Results

SysGroup announce its unaudited half year results for the six months ended 30 September 2021.

Financial highlights

-- Revenue of GBP7.58m (H1 FY21: GBP9.01m)
-- Recurring Managed IT Services revenue represented 86% of total revenue (H1 FY21: 83%)
-- Adjusted EBITDA (1) of GBP1.34m (H1 FY21: GBP1.41m), in line with management's expectations
-- Adjusted profit before tax (2) of GBP0.96m (H1 FY21: GBP0.99m)
-- Statutory profit before tax of GBP0.25m (H1 FY21: GBP0.13m)
-- Adjusted basic EPS (3) of 1.5p (H1 FY21: 1.7p)
-- Basic earnings per share of 0.3p (H1 FY21: 0.2p)
-- Cashflow from operations of GBP1.14m (H1 FY21: GBP1.68m)
-- Cash of GBP3.47m at 30 September 2021 (30 September 2020: GBP3.02m)
-- Net cash (4) at 30 September 2021 of GBP1.96m (30 September 2020: GBP1.17m)

Operational highlights

-- Consistently high customer satisfaction levels maintained above 97%
-- Invested to enhance the technology that powers our multi-tenanted SysCloud 2.0 platform
-- Manchester office opened to expand northern sales & marketing presence - refurbishment of Newport office
-- Project Fusion has continued to deliver significant improvements to our business operations from a unified platform of systems across the Group; further functionality for marketing automation, people management and reporting added in H1
-- ESG project commenced with inaugural ESG disclosure to be included in the FY22 annual report

Outlook

-- The long-term outlook for the Group and the market remains very positive as IT has become an increasingly important board agenda item for businesses in the last 18 months
-- Continuing to see companies seek to move towards Cloud rather than on-premise solutions, with the expectation that business-critical IT projects and investment decisions will recover strongly once there is more certainty around the economic environment and the on-going impact of COVID-19
-- The Board remains confident that Adjusted EBITDA for the current financial year will be in line with its expectations

Adam Binks, Chief Executive Officer, commented:"I am pleased with the performance of the business in light of the ongoing economic uncertainty and the Board is confident in meeting expectations for the full year. We have a strong customer base who rely heavily on the business critical support that we provide and we benefit from very high levels of recurring revenue. Throughout the pandemic we have focused on ensuring that our business is optimised to take full advantage once conditions normalise and I am delighted with the progress made. IT infrastructure and support is integral to all businesses and as budget confidence returns we have the right market solutions, the right people to deliver and the right platform to scale rapidly."

[rp19] 09/11/2021 20:18

Keen to see the outlook statement in the results as, based on the recent trading statement, the results in themselves unlikely to be particularly brilliant. But the market looks forward etc.

[robin_lemer] 09/11/2021 17:08

I bought shares as a result of the increase of the holding of Helium. They are successful fund and have noted that over the last few years they have been and out of the shares and their trading has been well timed. Have taken the view they speak to the management and have a good idea next results in two weeks time will be positive and that is the reason for their recent purchase

[rivaldo] 08/11/2021 12:24

RNS - Helium Rising Stars Fund have been buying, and are now up to 6.88, or 3.4m shares, up from 4.65%. Quite an increase, and dated 5/11 so presumably to do with that large trade last Tuesday:

[masurenguy] 05/11/2021 15:07

Carter sold out his complete holding in SYS. I believe that he is a private investor who is also the largest shareholder in Peel Hunt.

[tiltonboy] 05/11/2021 13:07

Thanks gleach, I hadn't seen that.

That is the holding of Darren Carter...not the great Darren Carter who took the winning penalty in the 2001/2 play-off final against Norwich...lol...

I presume he was a holder of one of the companies SYS took over.

[gleach23] 05/11/2021 10:09

Ahead of results on 22nd, couldn't resist a top-up this morning for the reasons highlighted in recent posts although didn't find the lack of face to face meetings due to Covid an entirely convincing explanation for the revenue drop.

Noteworthy trade reported late on Tuesday of 3.55m shares @ 28p will hopefully be a marker for the low point.

[rivaldo] 02/11/2021 07:17

RNS re investor presentation on Investor Meet on November 23rd after the interims - good to see SYS being proactive with investors:

[tiltonboy] 01/11/2021 15:13

Totally agree. It doesn't matter who is buying or selling. All that matters is the company delivers. The share price will sort itself out!

[hastings] 01/11/2021 14:16

That's what makes the market-go-round!

[tiltonboy] 01/11/2021 13:40

Looks like there are a few who are less impressed!

[weatherman] 31/10/2021 16:36

I can see consolidation in this sector, and SYS may receive a bid given its current low rating - imo.

[hastings] 31/10/2021 07:30

Great to have your company here rivaldo and I absolutely agree with your take on this.

[rivaldo] 31/10/2021 07:24

I've picked up some of these at 30p and below. The trading update looked OK to me, with SYS proving that they can continue to trade very profitably - and in line with forecasts - despite the pandemic-induced reduction in sales.

On a P/E of around 8, with a £2m cash pile, and likely to make hay as business activity recovers post-pandemic given their sector, SYS looks very solid value to me at these levels.

[hastings] 29/10/2021 14:56

Well I've added, although shows as a sell.

[hedgehog 100] 29/10/2021 14:27

SYS is also a good play on cybersecurity -


Which has gained even more impetus since the pandemic -

"Wednesday 27 October 2021 7:20 am
Softline to launch $1.5bn London IPO amid cybersecurity frenzy
... When businesses went virtual amid a raft of Covid-19 restrictions worldwide, many realised their cybersecurity was not where it needed to be to handle the transition – which has pushed many to upgrade their digital defences."

[hedgehog 100] 29/10/2021 14:03

There are multiple useful press releases on SYS's website -


For example -

"October 21st, 2021 by Bethany Whelan
Creating a ‘super-brand’: SysGroup targets £100m market cap
CEO and CFO explain how transformational deals and organic growth are key to rapidly scaling a technology company
... “Our plan is to take the business to a £100m market cap,” says CEO Adam Binks. “It only takes two or three strategic acquisitions.” ..."


If the pandemic has depressed valuations in the sector, then this could be the perfect time to pick up some bargains.

[hedgehog 100] 29/10/2021 13:52

At just 28.5p the fall looks overdone, considering that the full year EBITDA forecast is still intact.

In fact, doesn't meeting the EBITDA forecast on revenues lower than forecasted mean that margins are better than forecasted?

Looks a very good value recovery play for H2, which should be lockdown-free unlike H1.

[weatherman] 29/10/2021 13:17

Mkt cap to EBITA ratio of nearly 5 seems too harsh.