SysGroup
30p (SYS; AIM)
SysGroup has announced that it expects to report revenue for the six months ended September 30 of £7.58m, 15.8% lower than the same period last year. As noted at the time of the group's fiscal 2021 final results, customers have continued to defer and curtail expenditure decisions as a result of the pandemic and the sales teams have continued to face restrictions in their ability to have in-person interactions with customers and prospects to develop the sales pipeline. Operationally, performance has been robust, with the company continuing to benefit from lower overheads as a result of integration synergies delivered from past acquisitions. Accordingly, management expects adjusted EBITDA to be £1.34m for the first half which is in line with expectations (H1 2021: £1.41m). Net cash at the period end was £1.96m (3.8p per share), up from £1.17m a year earlier.
Despite the adverse impact of the pandemic on customer decision making, it looks like SysGroup will be able to report adjusted EBITDA broadly in line with the prior year. The long-term outlook for the business and market remains positive and likely to benefit from an increasing number of companies moving towards Cloud rather than on-premise solutions. We expect IT projects and investment decisions, as a business-critical item, to recover strongly once there is more certainty around the economic environment and the on-going impact of Covid-19. Hold.
