System1 reports 'marked increase' in first-half sales

The AIM-traded firm said data products represented 45% of revenue in the second quarter, growing from 28% in the first, with data revenue in the second quarter exceeding the first despite a quarter-on-quarter reduction in total group revenue.

It said the group's first half revenue grew 22% on last year, to £12.3m.

Adjusted operating costs grew as planned, as the group continued to invest in automated products, technology and business development, rising by 10% over the comparable period to £9.0m.

System1 said adjusted pre-tax profits were expected to be around £1.3m in the first half, approximately £0.9m higher than in the comparable period.

Statutory pre-tax profits were expected to be £1.3m, compared with a loss of £0.4m in the first half of last financial year.

Period end cash, net of borrowings, totalled £7.3m, compared with £6.5m at the end of March.

“We have been delighted by the continuing adoption by both new and existing customers of System1's repeatable, fast-turnaround and scalable data products as they displace the historic large bespoke consultancy projects that dominated the group's activity until the second half of last year,” the board said in its statement.

“We believe that the growth in data revenues signals tangible progress towards our strategic goals, and that these revenues will in due course more than offset the reduction in bespoke consultancy projects as more customers switch to using our automated data products.”

In line with previous announcements, System1 said it intended to initiate a share buyback programme after its interim results announcement, repurchasing shares over an extended period to enhance shareholder returns and to satisfy obligations over employee share schemes.

System1 said it would announce its interim results for the six months ended 30 September on 30 November.

At 1332 BST, shares in System1 Group were up 11.4% at 278.5p.