Share Name Share Symbol Market Type Share ISIN Share Description
Sysgroup Plc LSE:SYS London Ordinary Share GB00BYT18182 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 43.50 43.00 44.00 43.50 43.50 43.50 10,000 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Media 19.5 -0.2 -0.2 - 10

SysGroup PLC Half-year Report

23/11/2020 7:00am

UK Regulatory (RNS & others)

Sysgroup (LSE:SYS)
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From Oct 2020 to Jan 2021

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RNS Number : 0872G

SysGroup PLC

23 November 2020

23 November 2020

SysGroup plc

("SysGroup" or the "Company" or the "Group")

Half yearly results for the six months ended 30 September 2020

SysGroup plc (AIM:SYS), the multi award-winning m anaged IT services and cloud hosting provider , is pleased to announce its unaudited half year results for the six months ended 30 September 2020 ("H1 2021").

Financial highlights

   --      Revenue of GBP9.01m (H1 2020: GBP9.26m) 
   --      Recurring Managed IT Services revenue represented 83% of total revenue (H1 2020: 80%) 
   --      Adjusted EBITDA (1) increased 19% to GBP1.41m (H1 2020: GBP1.18m) 
   --      Adjusted profit before tax(2) increased by 52% to GBP0.99m (H1 2020: GBP0.65m) 
   --      Statutory profit before tax of GBP0.13m (H1 2020: loss of GBP0.37m) 
   --      Adjusted basic EPS (3) of 1.7p (H1 2020: 1.1p) 
   --      Basic profit per share of 0.2p (H1 2020: loss per share 0.9p) 
   --      Operational cashflows  increased 83% to GBP1.56m (H1 2020: GBP0.85m) 
   --      Cash of GBP3.02m at 30 September 2020 (30 September 2019: GBP2.65m) 
   --      Net cash (4) at 30 September 2020 of GBP1.17m (30 September 2019: net debt of GBP(0.72)m) 

Operational highlights

   --      Resilient COVID-19 response with all team members continuing to work remotely 
   --      Certus and HNS integration completed on time 

-- Project Fusion progressing according to plan to deliver a unified platform of systems across the Group

   --      Closure of Bristol satellite office to reflect new homeworking practices 

Adam Binks, Chief Executive Officer, commented:

"I am pleased to be able to report on a period that has demonstrated the stability, agility and relevance of our business during a global crisis which has resulted in considerable uncertainty for many businesses. Our team has worked tirelessly to continue to provide a robust and uninterrupted service to our customers whilst adapting to new ways of working and, for that effort, I am extremely grateful.

Whilst COVID-19 has had a marked impact on many sectors, it has created a huge opportunity for the IT services sector. The value of robust, flexible and secure IT has never been so important to businesses; outsourced managed services has been recognised as a key component of many businesses' success, growth and continuity. We look forward to capitalising on that trend in the years to come."


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

2. Adjusted profit before tax 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.

 For further information please 
                                           Tel: 0151 559 
  SysGroup Plc                             1777 
  Adam Binks, Chief Executive 
  Martin Audcent, Chief Financial 
   Shore Capital (Nomad and Broker)        Tel: 020 7408 
   Corporate Finance: Edward Mansfield     4090 
   / Daniel Bush 
   Corporate Broking: Fiona Conroy 
                                         Tel: 07780 901 
  Alma PR (Financial PR)                  979 
  Josh Royston / Helena Bogle 

About SysGroup

SysGroup is a leading provider of Managed IT Services, Cloud Hosting, and expert IT Consultancy. The Group delivers solutions that enable clients to understand and benefit from industry leading technologies and advanced hosting capabilities. SysGroup focuses on a customer's strategic and operational requirements - enabling clients to free up resources, grow their core business and avoid the distractions and complexity of delivering IT services.

The Group has offices in Liverpool, London, Newport and Telford.

For more information, visit


The Group delivered solid results in the first half of FY21 including a 19% increase in Adjusted EBITDA to GBP1.41m despite the challenging economic environment which continues to be clouded by the COVID-19 pandemic. Total revenue was largely flat YOY at GBP9.01m with lower Value Added Resale ("VAR") sales which was partially offset by a slight increase in recurring managed IT services revenue which represented 83% of the Group's total revenue (H1 2020: 80%). Our VAR sales, which contributed 17% of the total revenue, were impacted in Q1 due to customers cautiously withholding capex expenditure whilst they assessed the impact of COVID-19 to their own businesses. As decision makers become more confident with the economic landscape, we expect to see this figure recover in the second half of the year and early evidence of this is already being seen.

Following the acquisitions in 2019, the integration of Certus IT Limited ("Certus") and Hub Network Services Limited ("HNS") is now fully complete and the benefits to the Group are starting to be realised. In keeping with our business model of focussing on the UK mid-market, we have exited some lower margin customer contracts that came with these acquisitions. Whilst this has had a small impact on revenue the impact to the Group's profitability is minimal.

As part of the integration, significant efforts have been made to complete the rebranding of the acquired businesses to reflect our operating model of a single go-to-market offering, known as "one SysGroup". I am pleased to report that Certus and HNS are now functioning under the SysGroup brand, with all systems fused onto a single platform providing greater visibility across the enlarged customer base. This has not only provided fast and accurate access to greater business intelligence across the entire Group, but the consolidated platform will enable future acquisitions to be integrated with relative ease going forward.

We have continued to invest in people during the period including in new hires to support future growth and development. In addition, we have continued to invest in training for our sales and leadership teams to ensure they can continue to confidently engage with our customers. Training has been particularly important during the pandemic as staff continue to adapt to different ways of working.

Combined with this we have been particularly pleased to have supported our staff throughout the pandemic and have had no need to make use of the furlough scheme or any of the government backed financial support mechanisms. We also took the decision early on in the pandemic to maintain our fully remote working model through to at least the new calendar year on the basis that a second lockdown would be likely after the summer. In doing so, we have been able to give our staff clarity and peace of mind, which has resulted in a stabilised workforce who have been able to concentrate on continuing to support our customers to the high standards to which they are accustomed.


The Group's strategy remains consistent: to expand its position as a trusted provider of managed IT services to businesses in the UK mid-market. The Board believes that a business focused on the provision of managed IT services offers the highest growth opportunity and the potential for increased margins and longer-term contracts, thereby providing greater revenue visibility.

To deliver against this strategy, the Group has positioned itself as an extension of a customer's existing IT department, with an emphasis on consultative-led sales to guide customers through the complexities and developments in the managed IT services and cloud hosting marketplace. Our primary purpose is to remain abreast of developments in technology and advise our customers accordingly. This leading role is supplemented by exceptional customer service and support, resulting in strong client engagement and embedding SysGroup into their organisations. The Group continues to invest in R&D to ensure its clients are making use of the latest and best solutions available to them whilst maintaining its vendor agnostic approach.

The Company's route to execute this strategy is through a combination of organic and acquisitive growth whilst ensuring cross-selling opportunities are created throughout the acquired customer bases, providing a single go-to-market offering under the SysGroup brand. Whilst COVID-19 has temporarily impacted our ability to acquire quality businesses to add to our platform for the short term, we will continue to assess strategic acquisitions going forward which fit our strict criteria and believe there will be further opportunities in due course.

Results and trading

During the period, the Group delivered revenue of GBP9.01m (H1 2020: GBP9.26m), a decrease of 3%, and Adjusted EBITDA of GBP1.41m (H1 2020: GBP1.18m), an increase of 19%.

Managed IT services revenue of GBP7.46m was slightly higher than H1 2020's GBP7.38m with the decline in Group revenue driven by lower VAR sales in the period. VAR revenue in H1 2021 was GBP1.55m compared to GBP1.88m in H1 2020 and sales were affected in Q1 by customers withholding capex expenditure as an early precaution in response to the impact of COVID-19 on their businesses and markets. This has led to a shift in revenue mix to 83% managed IT services and 17% VAR revenue in the period (H1 2020: 80%:20%) which we see as a temporary position. We have seen VAR sales and orders begin to recover during the latter part of Q2 and cautiously anticipate this to continue into H2 2021 which would lead to a full year revenue mix more similar to FY20.

Gross profit was GBP5.38m with a gross margin of 59.7% (H1 2020: GBP5.47m and 59.1% respectively). The higher gross margin reflects the increase in revenue mix towards managed IT services in the period. Adjusted operating expenses of GBP3.97m were GBP0.32m below the same period last year (H1 2020: GBP4.29m) which is due to the benefit of acquisition synergies and the capitalisation of R&D costs for Project Fusion, discussed in the Operations section below. We have made no use of the government furlough scheme and whilst we have implemented a Group wide recruitment freeze, in certain areas of our business we have continued to make strategic hiring decisions to support continued future growth.

The Group has reported a statutory profit before tax of GBP0.13m which compares to a loss before tax of GBP(0.37)m in H1 2020. This movement is principally due to the increase in Adjusted EBITDA and lower level of exceptional costs in the period.

Adjusted basic earnings per share for H1 2021 was 1.7 pence (H1 2020: 1.1 pence). Basic profit per share for H1

2021 was 0.2 pence (H1 2020: loss per share of 0.9 pence).

The Group has a strong net cash position of GBP1.17m post IFRS16 (H1 2020: net debt GBP(0.72)m), and GBP1.63m pre-IFRS16 (H1 2020: GBP0.14m). The Group's cash balance at 30 September 2020 was GBP3.02m (30 Sept 2019: GBP2.65m) reflecting good working capital control. During the period the Company paid the final earn-out consideration relating to the acquisition of Certus. The full earn-out profit target was achieved and GBP0.975m cash consideration was paid to the vendors of Certus. The Group has made no use of any of the government backed COVID-19 assistance schemes other than to defer the payment of Q1 VAT which amounts to GBP0.28m which will be paid in full prior to 31 March 2021.

Working capital has been managed well with a net GBP0.31m cash inflow in the period (H1 2020: GBP0.04m) and a cash conversion rate of 115% (H1 2020: 96%). On a like for like basis, excluding the benefit of the VAT deferral, cash conversion remains strong at 95% (H1 2020: 96%). This performance has been achieved despite providing financial support to a small number of customers during the period.

Share Option Grants

In July this year, we announced the implementation of a new 2020 SysGroup Long Term Incentive Plan ("2020 LTIP"), together with an initial grant of 400,000 performance shares (the "Award") under the 2020 LTIP. The Remuneration Committee granted 250,000 performance shares to Adam Binks, Chief Executive Officer, and 150,000 performance shares to Martin Audcent, Chief Financial Officer (together the "Executive Directors"). The 2020 LTIP replaced in its entirety the incentive plan set up in June 2018 ("2018 LTIP") and the 1.6 million performance shares granted to the Executive Directors under the 2018 LTIP vested with immediate effect.

In addition to the grant of the 400,000 performance shares to the Executive Directors, 450,000 share options were granted in April 2020 to senior management under the existing 2018 SysGroup EMI Scheme.

Market Opportunity

Despite a subdued market environment, with many prospects hesitant to sign new contracts until they have increased visibility on their own operations, we believe the long term market opportunity for SysGroup remains buoyant, underpinned by the visible need for digital transformation. The accelerated shift towards flexible and remote working has forced many companies to rethink how they operate and adapt their working practices for both the short and long term. This has positioned SysGroup well for the future - now more so than ever, businesses are relying on proven technology to ensure the smooth running of their operations and are seeing the value of outsourced managed IT services. We therefore anticipate significant sales opportunities over the coming years as businesses realise the importance of enhanced IT processes within their operations. We are well placed to support our customers through this period of global change which will be further supported by our buy-and-build strategy.


During H1 we completed the integration of the Certus and HNS businesses and have already begun to see encouraging results. Following completion of phase one of Project Fusion, the unified platform of systems across the Group will enable more efficient working practices and higher quality operating and reporting information. Project Fusion has multiple workstreams for systems covering Customer Relationship Management, Service Desk, Financial Accounts, Marketing and Risk Management, and will greatly benefit the Group as it not only provides enhanced business intelligence but also makes the integration of future acquisitions simpler and easier.

Our customer engagement strategy which was launched in the prior year is designed to help us better identify customer motivations and preferences to ensure we maintain our excellent customer retention rates. Naturally, we have found it difficult to progress this to the fullest extent whilst customers and team members are working remotely, however, we have invested considerable time and resources in training our sales teams to enable them to strengthen customer relationships virtually. Whilst we have started to see initial progress, we see this as a long-term process, which will start to deliver tangible results in future periods.

Following the integration of the HNS business and owing to the success of our homeworking capability, we made the decision to close our Bristol office and transition the team members based from that location to become permanent homeworkers. We expect to see a small operational saving as a result of the closure.


The first half of FY21, whilst clouded with some uncertainty, has demonstrated the resilience of our business model and the clear need for our offering. The integration of the acquired businesses has both streamlined and enhanced our services, providing a consolidated platform from which to operate and we believe this will greatly benefit the Group for the remainder of the year as well as future periods.

The swift invocation of our business continuity plan following the global outbreak of COVID-19 and the transition of all employees to homeworking, has proved to be successful, with our teams providing uninterrupted service and support to our customers throughout the period. The decision to keep all team members working from home has ensured consistency throughout whilst having minimal disruption on the day-to-day running of the Group. I would like to thank our entire team for their continued hard work and dedication through what has been a very challenging time for everybody.

Despite the economic uncertainty that is still apparent, with guidance now re-established in the market, the Board is confident that the Company will meet full year expectations.

Adam Binks

Chief Executive Officer



                                                       Unaudited     Unaudited     Audited 
                                                      six months    six months     year to 
                                                              to            to 
                                                       30-Sep-20     30-Sep-19   31-Mar-20 
                                             Notes       GBP'000       GBP'000     GBP'000 
 Revenue                                       2           9,007         9,260      19,492 
 Cost of sales                                           (3,629)       (3,788)     (8,291) 
 Gross profit                                  2           5,378         5,472      11,201 
 Operating expenses before depreciation, 
  amortisation, exceptional items and 
  share based payments                                   (3,971)       (4,291)     (8,387) 
                                            ------  ------------  ------------ 
 Adjusted EBITDA                                           1,407         1,181       2,814 
------------------------------------------  ------  ------------  ------------  ---------- 
 Depreciation                                              (369)         (427)       (847) 
 Amortisation of intangible assets                         (671)         (636)     (1,321) 
 Exceptional items                             4            (36)         (288)       (475) 
 Share based payments                                      (155)          (95)       (199) 
------------------------------------------  ------  ------------  ------------  ---------- 
 Administrative expenses                                 (5,202)       (5,737)    (11,229) 
 Operating profit/(loss)                                     176         (265)        (28) 
------------------------------------------  ------  ------------  ------------  ---------- 
 Finance costs                                              (51)         (103)       (206) 
==========================================  ======  ============  ============  ========== 
 Profit/(loss) before taxation                               125         (368)       (234) 
 Taxation                                                   (30)          (59)         112 
 Total comprehensive profit/(loss) 
  attributable to the equity holders 
  of the company                                              95         (427)       (122) 
------------------------------------------  ------  ------------  ------------  ---------- 
 Basic earnings per share (pence)              3            0.2p        (0.9p)      (0.2p) 
 Fully diluted earnings per share (pence)      3            0.2p        (0.9p)      (0.2p) 
------------------------------------------  ------  ------------  ------------  ---------- 

All the results arise from continuing operations.



                                               Unaudited   Unaudited     Audited 
                                               30-Sep-20   30-Sep-19   31-Mar-20 
                                     Notes       GBP'000     GBP'000     GBP'000 
 Non-current assets 
 Goodwill                                         15,554      15,578      15,554 
 Intangible assets                                 5,766       6,704       6,188 
 Plant, property and equipment                     1,548       1,977       1,824 
----------------------------------  -------  -----------  ----------  ---------- 
                                                  22,868      24,259      23,566 
 Current assets 
 Trade and other receivables           6           2,492       2,283       2,726 
 Cash and cash equivalents                         3,021       2,647       3,036 
----------------------------------  -------  -----------  ----------  ---------- 
                                                   5,513       4,930       5,762 
 Total Assets                                     28,381      29,189      29,328 
----------------------------------  -------  -----------  ----------  ---------- 
 Equity and Liabilities 
 Equity attributable to the equity shareholders of the parent 
 Called up share capital                             494         494         494 
 Share premium                                     9,080       9,080       9,080 
 Other reserve                                     2,483       2,226       2,328 
 Translation reserve                                   4           4           4 
 Retained earnings                                 8,258       7,856       8,163 
----------------------------------  -------  -----------  ----------  ---------- 
                                                  20,319      19,660      20,069 
 Non-current liabilities 
 Lease liabilities                                   296         540         441 
 Deferred taxation                                 1,082       1,288       1,200 
 Bank loan                                           951       1,284       1,146 
----------------------------------  -------  -----------  ----------  ---------- 
                                                   2,329       3,112       2,787 
 Current liabilities 
 Trade and other payables              7           3,892       3,575       3,488 
 Deferred income                                   1,238       1,297       1,465 
 Contingent consideration                              -       1,000       1,000 
 Lease liabilities                                   270         321         268 
 Bank loan                                           333         224         251 
==================================  =======  ===========  ==========  ========== 
                                                   5,733       6,417       6,472 
 Total Equity and Liabilities                     28,381      29,189      29,328 
----------------------------------  -------  -----------  ----------  ---------- 



                                             Attributable to equity holders of the parent 
                                      Share      Share      Other   Translation   Retained     Total 
                                    capital    premium    reserve       reserve     profit 
                                    GBP'000    GBP'000    GBP'000       GBP'000    GBP'000   GBP'000 
 At 1 April 2019                        494      9,080      2,129             4      8,370    20,077 
 Loss and total comprehensive 
  expense for the period                  -          -          -             -      (427)     (427) 
 Share-based payment charge               -          -         97             -          -        97 
 Adjustment on adoption 
  of IFRS16                               -          -          -             -       (87)      (87) 
--------------------------------  ---------  ---------  ---------  ------------  ---------  -------- 
 At 30 September 2019                   494      9,080      2,226             4      7,856    19,660 
 Profit and total comprehensive 
  income for the period                   -          -          -             -        307       307 
 Share-based payment charge               -          -        102             -          -       102 
--------------------------------  ---------  ---------  ---------  ------------  ---------  -------- 
 At 31 March 2020                       494      9,080      2,328             4      8,163    20,069 
 Profit and total comprehensive 
  income for the period                   -          -          -             -         95        95 
 Share-based payment charge               -          -        155             -          -       155 
 At 30 September 2020                   494      9,080      2,483             4      8,258    20,319 
--------------------------------  ---------  ---------  ---------  ------------  ---------  -------- 

The following describes the nature and purpose of each reserve within equity:

 Reserve               Description and purpose 
--------------------  ---------------------------------------------------- 
 Other reserve         Amount reserved for share-based payments to 
                        be released over the life of the instruments 
                        and the amount subscribed for share capital 
                        in excess of nominal value of acquisition of 
                        another company 
 Retained earnings     All accumulated profits and losses arising 
                        net of distributions to shareholders 
  Share premium 
                        Amounts subscribed for share capital in excess 
                        of the nominal value 
------------------    -------------------------------------------------------- 



                                                 Unaudited     Unaudited     Audited 
                                                six months    six months     Year to 
                                                        to            to 
                                                 30-Sep-20     30-Sep-19   31-Mar-20 
                                                   GBP'000       GBP'000     GBP'000 
 Cashflows used in operating activities 
 Net profit/(loss) after taxation                       95         (427)       (122) 
 Adjustments for: 
 Depreciation and amortisation                       1,040         1,063       2,168 
 Finance costs                                          51           103         206 
 Share based payments                                  155            95         199 
 Taxation                                               30            59       (112) 
--------------------------------------------  ------------  ------------  ---------- 
 Operating cashflows before movements 
  in working capital                                 1,371           893       2,339 
--------------------------------------------  ------------  ------------  ---------- 
 Decrease in trade and other receivables               223           942         501 
 Increase/(decrease) in trade 
  and other payables                                    83         (902)       (533) 
 Operating cashflows before interest 
  and tax                                            1,677           933       2,307 
--------------------------------------------  ------------  ------------  ---------- 
 Interest paid                                        (51)         (103)       (205) 
 Taxation (paid)/refunded                             (69)            21       (172) 
 Operational cashflows                               1,557           851       1,930 
--------------------------------------------  ------------  ------------  ---------- 
 Cashflows from investing activities 
 Payments to acquire property, plant 
  & equipment                                         (95)         (180)       (353) 
 Payments to acquire intangible 
  assets                                             (246)             -       (190) 
 Acquisition of subsidiary companies                 (975)       (1,911)     (1,911) 
 Amounts received in respect of 
  previous acquisitions                                  -           252         252 
 Cash acquired with acquisitions                         -           609         609 
 Net cash used in investing activities             (1,316)       (1,230)     (1,593) 
--------------------------------------------  ------------  ------------  ---------- 
 Cashflows from financing activities 
===========================================   ============  ============ 
 Repayment of loan facility including 
  fees                                               (112)         (113)       (224) 
 Capital repayment of lease liabilities              (144)         (237)       (453) 
--------------------------------------------  ------------  ------------  ---------- 
 Net cash from financing activities                  (256)         (350)       (677) 
--------------------------------------------  ------------  ------------  ---------- 
 Net decrease in cash and cash equivalents            (15)         (729)       (340) 
--------------------------------------------  ------------  ------------  ---------- 
 Cash and cash equivalents at the 
  beginning of the period                            3,036         3,376       3,376 
 Cash and cash equivalents at the 
  end of the period                                  3,021         2,647       3,036 
--------------------------------------------  ------------  ------------  ---------- 




The accounting policies used in the preparation of the unaudited consolidated interim financial information for the six months ended 30 September 2020 are in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRS") as adopted by the European Union and are consistent with those that will be adopted in the annual statutory financial statements for the year ended 31 March 2021.

While the financial information included has been prepared in accordance with the recognition and measurement criteria of IFRS, as adopted by the European Union, these financial statements do not contain sufficient information to comply with IFRSs.

The accounting policies adopted in the interim financial statements are consistent with those adopted in the financial statements for the year ended 31 March 2020.

Exceptional items

The Group presents as exceptional items on the face of the Statement of Comprehensive Income those material items of income and expense which the Directors consider, because of their size or nature and expected non-recurrence, merit separate presentation to facilitate financial comparison with prior periods and to assess trends in financial performance. Exceptional items are included in Administration expenses in the Consolidated Statement of Comprehensive Income but excluded from Adjusted EBITDA as management believe they should be considered separately to gain an understanding of the underlying profitability of the trading businesses.

Going concern

The Directors have prepared the financial statements on a going concern basis which assumes that the Group and the Company will continue to meet liabilities as they fall due.

The Board recognises that whilst the Group is trading in an uncertain economy following the onset of the COVID-19 pandemic, the Group has demonstrated in its H1 results both operational and financial resilience. The Group has an operating model with circa 75% of revenue deriving from contracted managed IT services which is a continuous service supply to customers and this has been largely uninterrupted by the impact of COVID-19. Cash conversion remains strong and the Group has a resilient financial position with a cash balance of GBP3.02m and a net cash position of GBP1.17m at 30 September 2020.

The Directors performed stress tests on the Group's financial forecasts during the period which allowed the Board to assess a significant downside scenario. The projected trading forecasts and resultant cashflows, together with the confirmed loan facilities and other sources of finance, taking account of reasonably possible changes in trading performance, show that the Group can continue to operate within the current facilities available to it.

The Directors therefore have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and they continue to adopt the going concern basis of accounting in preparing the financial statements.


The chief operating decision maker for the Group is the Board of Directors and the Group reports in two segments:

-- Managed IT Services - this segment provides all forms of managed services to customers and includes professional services.

-- Value Added Resale (VAR) - this segment provides all forms of product and licence sales procured from supplier partners.

The monthly management accounts reported to the Board of Directors are reviewed at a consolidated level with the operating segments representative of the business model for growth of recurring contract income in Managed IT Services and VAR sales as a complementary business activity. The Board review the results of the operating segments at a revenue and gross profit level since the Group's management and operational structure supports these operational segments as unified Group functions.

All segments are continuing operations and there are no transactions between segments.

                           Unaudited     Unaudited     Audited 
                          six months    six months     year to 
                                  to            to 
                           30-Sep-20     30-Sep-19   31-Mar-20 
                             GBP'000       GBP'000     GBP'000 
---------------------   ------------  ------------  ---------- 
 Managed IT Services           7,462         7,382      15,092 
 Value Added Resale            1,545         1,878       4,400 
                               9,007         9,260      19,492 
 ---------------------  ------------  ------------  ---------- 
 Gross Profit 
 Managed IT Services           5,049         5,073      10,281 
 Value Added Resale              329           399         920 
                               5,378         5,472      11,201 
 ---------------------  ------------  ------------  ---------- 
                                             Unaudited       Unaudited             Audited 
                                            six months      six months             year to 
                                                    to              to 
                                             30-Sep-20       30-Sep-19           31-Mar-20 
                                               GBP'000         GBP'000             GBP'000 
 Profit/(loss) for the financial year 
  attributable to shareholders                      95           (427)               (122) 
 Adjusted profit for the financial 
  period                                           823             562               1,657 
 Weighted number of equity shares in 
  issue                                     51,584,007      49,419,690          51,374,950 
 Adjusted basic earnings per share 
  (pence)                                         1.7p            1.1p                3.4p 
 Basic earnings per share (pence)                 0.2p          (0.9p)              (0.2p) 
 Diluted earnings per share (pence)               0.2p          (0.9p)              (0.2p) 
----------------------------------------  ------------  --------------  ------------------ 
                                             Unaudited       Unaudited             Audited 
                                            six months      six months             year to 
                                                    to              to 
                                             30-Sep-20       30-Sep-19           31-Mar-20 
                                               GBP'000         GBP'000             GBP'000 
 Profit/(loss) after tax used for basic 
  earnings per share                                95           (427)               (122) 
 Amortisation of intangible assets                 671             636               1,321 
 Exceptional items                                  36             288                 475 
 Share based payments                              155              95                 199 
----------------------------------------  ------------  --------------  ------------------ 
 Tax adjustments                                 (134)            (30)               (216) 
 Adjusted profit used for adjusted 
  earnings per share                               823             562               1,657 
----------------------------------------  ------------  --------------  ------------------ 
                                    Unaudited     Unaudited     Audited 
                                   six months    six months     year to 
                                           to            to 
                                    30-Sep-20     30-Sep-19   31-Mar-20 
                                      GBP'000       GBP'000     GBP'000 
-------------------------------  ------------  ------------  ---------- 
 Integration and restructuring             61           204         390 
 Acquisitions                            (25)            84          85 
                                           36           288         475 
-------------------------------  ------------  ------------  ---------- 

Integration and restructuring costs relate to the exit of the Bristol office and costs incurred for integrating the Certus business operations. The credit of GBP25,000 for acquisitions is the difference between the GBP1m contingent consideration accrued at 30 March 2020 for the Certus earn-out payment and the sum actually paid to the Sellers in H1 of GBP975,000.

 Reconciliation of operating profit             Unaudited       Unaudited              Audited 
  to Adjusted EBITDA                           six months      six months              year to 
                                                       to              to 
                                                30-Sep-20       30-Sep-19            31-Mar-20 
                                                  GBP'000         GBP'000              GBP'000 
 Operating profit/(loss)                              176           (265)                 (28) 
 Depreciation                                         369             427                  847 
 Amortisation of intangible assets                    671             636                1,321 
 EBITDA                                             1,216             798                2,140 
------------------------------------  -------------------  --------------  ------------------- 
 Exceptional items                                     36             288                  475 
 Share based payments                                 155              95                  199 
 Adjusted EBITDA                                    1,407           1,181                2,814 
------------------------------------  -------------------  --------------  ------------------- 
 Reconciliation of profit before                Unaudited       Unaudited              Audited 
  tax to Adjusted Profit before                six months      six months              year to 
  Tax                                                  to              to 
                                                30-Sep-20       30-Sep-19            31-Mar-20 
                                                  GBP'000         GBP'000              GBP'000 
 Profit/(loss) before tax                             125           (368)                (234) 
 Amortisation of intangible assets                    671             636                1,321 
 Exceptional items                                     36             288                  475 
 Share based payments                                 155              95                  199 
------------------------------------  -------------------  --------------  ------------------- 
 Adjusted Profit Before Tax                           987             651                1,761 
------------------------------------  -------------------  --------------  ------------------- 
 Cash conversion                                Unaudited       Unaudited              Audited 
                                               six months      six months              year to 
                                                       to              to 
                                                30-Sep-20       30-Sep-19            31-Mar-20 
                                                  GBP'000         GBP'000              GBP'000 
 Operational cashflows                              1,557             851                1,930 
 Acquisitions, integration and 
  restructuring cashflows                              61             288                  492 
 Cash generated from operations                     1,618           1,139                2,422 
------------------------------------  -------------------  --------------  ------------------- 
 Adjusted EBITDA                                    1,407           1,181                2,814 
------------------------------------  -------------------  --------------  ------------------- 
 Cash conversion                                     115%             96%                  86% 
------------------------------------  -------------------  --------------  ------------------- 
 Net Cash/(debt)                                Unaudited       Unaudited              Audited 
                                               six months      six months              year to 
                                                       to              to 
                                                30-Sep-20       30-Sep-19            31-Mar-20 
                                                  GBP'000         GBP'000              GBP'000 
 Cash balances                                      3,021           2,647                3,036 
 Bank loans - current                               (333)           (224)                (251) 
 Bank loans - non-current                           (951)         (1,284)              (1,146) 
 Lease liabilities                                  (566)           (861)                (708) 
 Contingent consideration                               -         (1,000)              (1,000) 
 Net Cash/(debt)                                    1,171           (722)                 (69) 
-----------------------------------------  --------------  --------------  ------------------- 
                                       Unaudited six     Unaudited            Audited 
                                           months to    six months            year to 
                                           30-Sep-20     30-Sep-19          31-Mar-20 
                                             GBP'000       GBP'000            GBP'000 
============================  ===  =================  ============  ================= 
 Trade debtors                                 1,469         1,166              1,427 
 Prepayments and accrued 
  income                                       1,023         1,117              1,299 
-----------------------------------------  ---------  ------------  ----------------- 
                                               2,492         2,283              2,726 
 -----------                               ---------  ------------  ----------------- 
                                            Unaudited six     Unaudited            Audited 
                                                months to    six months            year to 
                                                30-Sep-20     30-Sep-19          31-Mar-20 
                                                  GBP'000       GBP'000            GBP'000 
=================================  ===  =================  ============  ================= 
 Trade payables                                     1,648         1,622              1,847 
 Corporation tax                                      237           451                158 
 Other taxes and social security                      992           626                552 
 Accruals                                           1,015           876                931 
----------------------------------------------  ---------  ------------  ----------------- 
                                                    3,892         3,575              3,488 
 -----------                                    ---------  ------------  ----------------- 

In February 2019, the Company acquired 100% of the share capital of Certus IT Limited ("Certus"), and the parties agreed an earn-out mechanism for a period of twelve months post-acquisition based on profit performance targets. In February 2020 the earn-out period was completed and Certus successfully achieved the maximum EBITDA target. The company paid GBP975,000 to the Sellers in full settlement of the contingent consideration during H1 FY21.


Copies of this report are available on the Company's website at

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(END) Dow Jones Newswires

November 23, 2020 02:00 ET (07:00 GMT)

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