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System1 Group PLC on Wednesday said it was breakeven at the pretax level in the first half of its financial year as revenue fell, and it appointed a new chief executive.
The London-based marketing and brand consultancy company was breakeven following a pretax loss of £6,000 in the six months to September 30 from a profit of £1.3 million the year before.
Revenue declined 15% to £10.5 million from £12.4 million, with the Innovation product group experiencing the largest decline of 52% to £1.6 million from £3.3 million the year prior. System1 said this reflects the later availability of an automated solution in that category, which launched in May.
Shares in System1 were down 17% to 135.00 pence on Wednesday afternoon in London.
System1 said employment costs rose as planned in the period to increase sales, marketing, and IT and development in order to scale up through partnerships and its automated testing platform.
System1 capitalised £65,000 of development costs in respect of its credit platform, the notifications service and the team management system.
System1 added that the higher exit run-rate for expenditure in the first half of the year, combined with exchange rate and inflationary pressures, are likely to increase expenditure and erode profitability in the second half.
‘We have a great client list - but we need to grow it a lot more, take the opportunity to do more business with all our customers and expand our routes to market,’ Founder & CEO John Kearon said.
‘That way we will grow our revenues significantly, have much more recurring and repeating activity, and significantly grow the value of the business.’
Current Chief Operating Officer, James Gregory, will take over as CEO on December 1 as Kearon takes up the role of president on the same day. System1 said Gregory will lead the execution of its new strategy, complete its digital transformation, and ‘scale the business’.
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