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System1 Group PLC shares plunged on Tuesday as the firm said it expects its full year financial performance to be ‘materially below’ current market expectations. Shares in System1 were down 36% to 256.00 pence in London on Tuesday afternoon. The London-based marketing firm said it believes market expectations for the 2026 financial year to be revenue of £42.1 million and adjusted pretax profit of £5.8 million. The company said as a result of trading in the first half of the year, it expects revenue to be in line with the £37 million achieved in the prior year, with adjusted pretax profit between £2.0 million and £2.5 million. It reported adjusted pretax profit of £5.3 million in financial 2025, which ended on March 31. System1 said trading in the current quarter to the end of September has continued broadly in line with the first quarter. It expects platform revenue in the first half of the year to be similar to the £16.7 million from a year ago. ‘Whilst the board had expected the global impact of US trade tariffs to be temporary, the backdrop to trading in [the second quarter] is similar to what we outlined for the first quarter. The company is continuing to see lower, but ongoing, spend from many of its largest clients, due to the wider macroeconomic uncertainty,’ System1 said. This slowdown in spending, along with exchange rate headwinds, has led to the performance in the second quarter, the company said. Overall revenue in the first half of the year is expected to be 5% lower than last year due to the continued planned reduction in non-platform business. ‘Notwithstanding the challenging market backdrop throughout [the first half], System1 has continued to win new mandates with a number of the world’s largest brands, including for its innovation product, which is expected to result in revenues from new business wins to be at a similar level to [the first half of financial 2025],’ System1 added. The company said it remains confident in its long-term growth prospects. It started a £2 million investment in future growth during the year, which has now largely been committed and will impact the next year. However, System1 said it is keeping a ‘tight rein’ on non-growth driven expenditure due to the current trading environment. The firm will release first half revenue figures on October 22, followed by interim results on December 2. ‘While we are seeing a number of new customer wins, these are not yet offsetting the lower spend we are seeing from our existing customer base, and it is disappointing to see the general trading environment in [the second quarter] not improving,’ said Chief Executive Officer James Gregory. ‘But I remain confident that we will return to growth, and we have committed to investment to support this. At the present time our revised outlook represents a cautious view given the ongoing macro-economic uncertainties.’ Copyright 2025 Alliance News Ltd. All Rights Reserved.
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