Sysgroup Share Discussion Threads

[rivaldo] 05/4/2022 07:47

Yep, very good news. Quite transformational, and immediately earnings-enhancing.

And all paid for without dilution - Santander evidently have great faith in SYS and its management in significantly increasing the available facilities. Which would suggest that they've been given sight of the latest management accounts? Perhaps a clue as to that forthcoming trading update.

Truststream has high recurring revenues, and there's lots of cross-selling opportunities, synergies etc. Plus of course the huge and growing cyber-security market.

There's much to like about today's news.

[hastings] 05/4/2022 07:29

Looks a decent purchase and no dilution.Not that they would want to raise at these levels. Surprised no TU though!

[weatherman] 05/4/2022 07:20

There is the acquisition - looking good to get into managed security.

[hedgehog 100] 04/4/2022 11:51

SYS had cash of £3.47M. at 30 September 2021 (30 September 2020: £3.02M.), and net cash at 30 September 2021 of £1.96M (30 September 2020: £1.17M.), and is profitable.

But the company has been looking for acquisitions, and with the appointment of Zeus something could be in the offing - perhaps something quite substantial.

With depressed tech valuations now looks like a good time to be buying, and acquisition placings tend to be at higher prices than placings to fund losses.

From the current depressed share price of 23.5p, a premium placing should be very possible.


We should receive a year end trading update from SYS for the year to 31st. March soon (it was on 19th. April last year).

And interestingly, SYS has 9 current job opportunities on its website, which suggests that business is good.


"Current Opportunities

We are always on the lookout for sharp, agile and enthusiastic people to join our team! If you are excited by who we are and what we do and want to be part of SysGroup then take a look at the amazing opportunities below."

[scepticalinvestor] 04/4/2022 11:10

Placing ahoy ladies lol

[hastings] 04/4/2022 07:21

Interesting to see a change of broker with Zeus now appointed.

[hedgehog 100] 02/3/2022 17:17

Tiltonboy,

SYS's financial year ends at the end of this month, and we can expect a trading update soon after that year end, in April.

I don't think that it would be good practice for directors to buy in so relatively soon before that, even if it's not an official close period.

Rather, the time to buy would be straight after that update, in a brief window before the two month close period ahead of the final results themselves.

Indeed that was the case two years ago. -

20/04/2020 06:00 UK Regulatory (RNS & others) SysGroup PLC Trading and COVID-19 Update LSE:SYS Sysgroup Plc
" ... The Group's trading for the year is in line with the Board's expectations ..."


21/04/2020 06:00 UK Regulatory (RNS & others) SysGroup PLC Directors Share Purchase LSE:SYS Sysgroup Plc


30/06/2020 06:00 UK Regulatory (RNS & others) SysGroup PLC Final Results LSE:SYS Sysgroup Plc



SYS's first half performance was on course, at which point SYS expressed confidence in its full year outcome.

I think that we would have heard already if there was going to be any dramatic divergence from that.

Moreover, SYS's adjusted annualised eps (earnings per share) based on H1 is 3p per share, so SYS's current share price of just 24p is dirt cheap for a quality, profitable IT services company, in a strong cash position.

22/11/2021 07:00 UK Regulatory (RNS & others) SysGroup PLC Half-year Report LSE:SYS Sysgroup Plc
"... Adjusted EBITDA (1) of GBP1.34m (H1 FY21: GBP1.41m), in line with management's expectations ...
Adjusted basic EPS (3) of 1.5p (H1 FY21: 1.7p) ...
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." ..."

[tiltonboy] 15/2/2022 21:48

Theres's no support....and no insiders buying. Rather suggests that we may not meet numbers this year.

[gleach23] 15/2/2022 20:25

The 23,796 sell @ 24p today chimes with the apparent distressed selling of many small caps currently.

Last year the company cited the inability to hold face to face meetings with clients as a reason for the revenue drop - that being the case, one would hope revenues will now benefit going forward.

[masurenguy] 15/2/2022 15:54

Yes, the shareprice has declined by almost 25% over the past 10 weeks. The company is profitable with a current market cap of circa £12m, including cash of circa £2m. P/S ratio is 0.8 and current year PER is also in single digits. Average daily trading volume of just 13K shares since interims on 7 December, which indicates some bored PI sales as there has not been any newsflow since then.

[tiltonboy] 15/2/2022 12:53

Now at an all-time low!

[hedgehog 100] 04/2/2022 16:42

Nice to see SYS move up today, its first blue day since November.

Though at its current share price of 27p, its market cap. is still just £13.19M. - less than its annual revenue.

For a profitable, cash-rich IT company, with great growth prospects, that looks too cheap, and a good recovery from this level looks very possible.

[yump] 25/11/2021 17:43

Thanks for that. Have to do a bit more reading. They're talking about market cap, which I'm not a great fan of, as that doesn't necessarily mean a great business.

So its basically growth by rationalising admin. by the look of it. ie. cross-sell and lose some overheads. I'd like to find out if there's a scalable part, that's unique to the group, if they're talking about a super-brand.

[hedgehog 100] 25/11/2021 17:19

Yump,

This post by Hastings may help to explain the temporarily fall in gross margins:

hastings 29 Oct '21 - 07:29 - 223 of 266 0 1 0
"I think it’s worth remembering that as part of the amalgamation of various parts of the previously acquired operations they have exited business of low value or earnings. That said, the general climate hasn’t been good as can be seen by others such as iomart. Cash position remains positive and one would expect the situation to improve going forward."

As always with investment, it's the future that matters more than the past.

And regarding scale, this SYS article last month sets out SYS's very clear road map for growth:

"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.” ...
“As we scale, our organic growth will scale with it because our customer base becomes bigger and we have more customers wanting to buy more of our services.
“We’re effectively buying market share to create a super-brand: by bringing these smaller companies into the fold, we’re giving their customer bases access to a broader and higher quality services, which enables them to extract the best value from their managed IT services provider.” ..."

[yump] 25/11/2021 17:00

OK, not less profit then, but not much profit for an IT business, but I take the point about the acquisition.

I always bother when businesses with a decent revenue make acquisitions before they turn a profit, unless they're doing something that requires scale. However, as you say the current results look promising - 10% adjusted PBT not bad.

[hedgehog 100] 25/11/2021 16:52

21/06/2021 06:00 UK Regulatory (RNS & others) SysGroup PLC Final Results LSE:SYS Sysgroup Plc

"Final Results for the year ended 31 March 2021

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 2021.

HIGHLIGHTS

Financial
2021 2020 Change
%
-----------------------------------
Revenue GBP18.13m GBP19.49m -7%
---------- ----------- -------
Recurring revenue as a % of total
revenue 79% 77% +2%
---------- ----------- -------
Gross profit GBP10.50m GBP11.20m -6%
---------- ----------- -------
Adjusted EBITDA (1) GBP2.91m GBP2.81m +4%
---------- ----------- -------
Adjusted EBITDA (1) margin % 16% 14% +2%
---------- ----------- -------
Adjusted PBT (2) GBP2.09m GBP1.76m +18%
---------- ----------- -------
Adjusted Basic EPS (3) 3.5p 3.4p +3%
---------- ----------- -------
Profit/(loss) before tax GBP0.21m GBP(0.23)m -
---------- ----------- -------
Basic EPS 0.5p (0.2)p -
---------- ----------- -------
Operational cashflows GBP2.70m GBP1.93m +40%
---------- ----------- -------
Net cash/(debt) (4) GBP1.88m GBP(0.07)m - ..."




Yump,

SYS's year ending 31.3.20 corresponds pretty well to the start of the pandemic, and in that year SYS actually made less pre-tax profit than in the following year, and the gross profit percentage was also lower than in the following year: 57.46% in 2020, and 57.9% in 2021.

Comparisons before that aren't so like-for-like because of acquisitions, including the particularly large acquisition of Certus IT in early 2019.

But in both 2018 and 2019 SYS made a pre-tax loss.
In 2018 gross profit was £5.59M., with gross margins of 57.4%.
And in 2019 gross profit was £7.78M., with gross margins of 60.92%.

So I can't really see the justification for your statement that SYS has made less profit on increasing revenue.

The gross margin % has fallen a bit since the Certus acquisition, but is now rising again, to 60.2% in the first half of this year.
And in that half SYS has made more pre-tax profit than in the whole of last year.

[yump] 25/11/2021 15:37

Just having a nose around for shares.

Looking over the past few years results, it looks like they've made less profit on increasing revenue. That includes pre-covid. For an IT business that should have good margins, that seems odd.

Is there a simple reason for that ?

[hedgehog 100] 25/11/2021 12:07

I wouldn't be surprised to see SYS tipped in the press soon.

It's so undervalued, and with such good growth prospects.

[the chairman elect] 25/11/2021 08:28

Reference my POST 259 - excellent investor conference call - link to be put on the website?

[rivaldo] 25/11/2021 08:25

Good to see another buy at above the published offer price this morning, this time 12,500 shares at 32.5p.

[rivaldo] 24/11/2021 15:13

I've been topping up here - and someone's just bought 30,151 at a big premium at 33p and cleared out the usually pretty tight market.

The most shares you can now buy online is just 1,000 at 32p - whilst you can sell the unusually large amount of 50,000 at 30.5p.

[weatherman] 22/11/2021 13:21

The report just released says current shares in issue are 49,859,690 - about £15m mkt cap at 30p - still cheap on a PE of 10.

[the chairman elect] 22/11/2021 09:55

INVESTOR meet COMPANY

LSE:SYS are on this tomorrow morning. Anyone can register to join in the SYS company presentation post results.

Sorry that I do not have a link but a quick google should give you that.

[masurenguy] 22/11/2021 09:52

FT states that the number of issued shares is 38.27m, which at 30p gives SYS a market cap of £11.48m. This compares with the ADVFN figure of 12.83m and £3.85m respectively. Therefore cash is circa 17% of the market cap.