System1 Share Discussion Threads

[cockerhoop] 04/12/2024 19:20

Like any company it's where they choose to draw the line. At SYS1 they only take direct external costs above the line (such as outsourced costs of panels etc).

All internal costs are included within admin expenses hence the wide disparity between gross and operating profit.

[dozey4] 04/12/2024 18:47

Why the huge difference between gross and net profit I wonder.

[martinmc123] 03/12/2024 10:39

SYS1 – System1
4*
System1 Group the marketing decision-making platform posted interims for the six months ended 30 September 2024 this morning. Total revenue grew by 38% to £18.3m with Platform revenue up 53% on H1 FY24 to £16.7m and now representing 91% of total revenue (H1 FY24: 82%). Gross profit was up 37% to £16m, with PBT up 176% to £2.6m as the benefits of the operational gearing and the Group’s scalable business model now showing through...from WealthOracle

wealthoracle.co.uk/detailed-result-full/SYS1/1048

[adamb1978] 03/12/2024 08:24

Good announcement, if not one which will set the pulses racing. Hint about potential outperformance against market expectations as you say. Still think this is a solid hold and long-term very good bet

[nchanning] 03/12/2024 07:55

Pretty strong hint that they're going to beat revenue expectations, and with the high gross margins we've seen how spectacular upgrades to EPS can be if they do . Cannacord upgrade revenue from 36.5 to 37 , but management indicating a bigger beat than that imo

[chrysalis99] 29/11/2024 17:44

The CEO is so incredibly confident about future prospects that I've been compelled to buy in despite being slightly concerned about not fully understanding the product (despite watching the presentations). Results next week I believe.

[tmfmayn] 29/11/2024 08:36

Rossco, this subject was raised at the AGM. The board claimed there was not a 'linear relationship' between bonuses and gross profit, and bonuses would not absorb another 44pc of gross profit were gross profit to advance by another 6.4m. I interpreted what they said as if gross profit advances another 32pc as per FY24, then another 2.8m would be paid. Anyway, the AGM was recorded on the investormeetcompany platform and can be viewed on YouTube. Have a watch and see what you think.

[rossco] 28/11/2024 14:59

Concerned about the cost of the sales scheme.
In the finals announcement to March 2024 it was stated that the variable linked pay rose by 2.8m. Since the gross profit for the year rose by 6.4m (19.7 to 26.1) that means almost 44% of the increase in gross profit was paid out to staff.
Seems too generous.

[adamb1978] 28/10/2024 11:03

Another NED purchase

[adamb1978] 23/10/2024 07:43

Nice to see a NED purchase

[adamb1978] 22/10/2024 21:36

Just had a look at the annual report and only £474k of that went to the 3 Execs.

Wonder whether they therefore had poorly structured sales bonus plans etc as >£2m for others seems huge for a company of this size?

Can't see how it could have otherwise been so large a number

[mr5k] 22/10/2024 20:13

evenso, that's a very large slug of the p&l going to management.

[cockerhoop] 22/10/2024 19:20

That's not quite how it works Woozle1, the cost of the bonuses will have been included in the P/L of the previous year but the cash paid this year.

[woozle1] 22/10/2024 18:39

"due mainly to the payment of £2.6m of FY24 performance bonuses". if they are paying out nearly all 2024 PBT in bonuses, that may explain the lack of market enthusiasm! I wonder if management shares in the losses/?

[martinmc123] 22/10/2024 10:06

4*
System1, the marketing decision-making platform issued an impressive update on trading for the quarter ended 30 September 2024 (Q2 FY25) and the half-year ended 30 September 2024 (H1 FY25) this morning. Platform Revenue increased by 35% to £8.2m with data sales 32% and data-led consultancy 53% higher than in the same period last year. Total Q2 FY25 Revenue of £8.9m grew by 25% on Q2 FY24, including the impact of lower non-platform revenues. Growth in Group Revenue was driven mainly by the US where Total Revenue rose by over 60%. For the HY period the Company won over 160 new platform clients. Platform Revenue in H1 FY25 increased by 53% versus H1 FY24 to £16.7m with data sales 48% and data-led consultancy 76% higher. Total H1 FY25 Revenue of £18.3m was 38% above the same period last year. The message, the business is still delivering robust topline growth. And this growth is feeding down to bumper profit growth. Gross Profit in H1 FY25...

...from WealthOracle

wealthoracle.co.uk/detailed-result-full/SYS1/895

[nchanning] 22/10/2024 08:56

There's also been a decent H2 weighting in recent years Fy23 - H1 10.5 , H2 12.9FY24 H1 13.3 H2 16.7When you look at that pattern you might see 18.3 H1 as an outstanding result that sets up for a whopping beat ....

[nchanning] 22/10/2024 07:07

Even in line would be 50 % EPS growth . I know everyone in UK small caps is traumatised but what multiple does an 87 % gross margin business growing EPS at 50 % a year deserve ? If you can find me one at 20x please let me know

[hydrus] 22/10/2024 06:46

One assumes that with a PE of c30 a beat for FY is in the price already and an overall in line would be below what the market is actually expecting. I think despite them trailing increased investment in H2 may well still be on track for a beat but perhaps not quite at the level of last year.

[nchanning] 22/10/2024 06:44

Looking at the performance vs H2 of the previous year - 16.7 vs 18.3 - you're still seeing strong growth and you'd expect to beat on the revenue line which only needs a flat H2 to meet expectations . Was hoping for a stronger Q2 but still very optimistic for a FY beat on revenue which translates into a thumping beat on EPS

[boonkoh] 22/10/2024 06:44

2.5m PBT (statutory as well) in H1But this was artificially depressed by the front loading of operating costs. I'm guessing USA headcount, marketing, etc. Say £1m of that cost is a bit "one-off" front loading, which will be matched to revenues to come.So if you assume the adj PBT run rate is c£3.5m, and worst case scenario profits stop growing... That's still a 40.7p EPS for a full year. And so trading at under 18x PE at the moment.(I hold in the Boon Fund)

[nchanning] 22/10/2024 06:37

You'd still say with 54% of the profit forecast in the bag in H1 , the balance of probabilities is heavily skewed towards another beat in EPS for the full year

[hydrus] 22/10/2024 06:29

Cannacord reiterates on track for in-line

[adamb1978] 22/10/2024 06:27

SO they get full marks for a very timely and detailed trading statement - many other companies could learn a lot from this update from SYS1.

The content is a little underwhelming though and puts pay to discussion over the last couple days of 'ahead of' announcements.

yoy growth in data revenues of 36% is very strong, though there's more variation in Predict Your revenues from one quarter to the next than would be ideal. Wonder whether they could subsriptionalise that a little more?

The number of new customer wins is positive and bodes well for the future, but nit sure I see the share price rallying short term on the back of this though

[z1co] 21/10/2024 14:55

Very surprised MM's still won't let you BUY @ £7.10 , not even 50 shares!

[adamb1978] 21/10/2024 08:55

Sure - I dont disagree about the gearing - very normal in software/tech (the industry which I work in!). However the reason I was referring to revenue again relates to timing. Flash revenue figures are very quick to be able to comment on but the further down the P&L you go the more variables: depreciation/amortisation rates, capitalisation policies, tax etc.

People often whinge about companies talking about EBITDA but the reason companies do so is speed and reducing complexity (by commenting on a figure which removes some of the variables).

I think their actual FY25 performance will be closer to current market expectations for FY26 (being £42m and 33p) than current expecations for FY25 (£36.5 and 23.5p).

Will see tomorrow where their confidence and conservatism lies.