SysGroup posts record revenues after spate of acquisitions

Telford-based MSP reports 46 per cent jump in revenue after a number of structural changes in company

Telford-based MSP SysGroup is in shape to hit the M&A trail, according to an analyst, after the firm posted a 46 per cent jump in revenue in 2017.

SysGroup's top line swelled by 46 per cent to £10.5m for its financial year ending 31 March 2018.

It organically grew revenue by 21 per cent year on year to £8.6m, with its acquisition of Rockford IT for £3.9m in November last year contributing to its overall revenue boost.

SysGroup (formerly Daily Internet) has put in place some major changes in the last three years. It recently underwent a corporate rebrand to unify various arms it has acquired, including NetPlan, System Professional and Rockford.

Adam Binks, who was installed as CEO in April, said the revenue growth signifies a "transformational year" for the company.

"Through excellent traction gained in the second half of the year, we have delivered on market expectations while continuing to grow the team, service offering and customer base," he said.

"Our sales pipeline continues to grow, and I am confident we are now well placed to take advantage of the strong market dynamics as the demand for managed IT services and cloud hosting continues to grow."Looking forward, we remain committed to investment in order to accelerate our organic growth strategy while continuing to assess complementary strategic acquisition opportunities."

With offices in London, Liverpool and Telford, the acquisitions have allowed SysGroup to increase its headcount by 168 per cent, with plans to take on more staff. It has also announced a number of new executive appointments who will take up their positions in the coming weeks, including former NCC Group financial controller Martin Audcent as CFO.According to analyst TechMarketView, SysGroup's 2018 turnover was driven largely by its hosting and managed services segment, which accounts for 68 per cent of its revenue, with the remainder generated through reselling activity.

Martin Courtney, principal analyst at TechMarketView, said the company is now in a "better shape" to continue its expansion plans through further acquisitions, after slashing its net debt from £3.1m to £920,000 throughout the year.
"With the integration of those businesses now complete, coupled with fresh boardroom impetus from the appointment of ex-NCC Group financial controller Martin Audcent as CFO, we expect SysGroup to set about maximising profitability by reducing operational cost wherever possible," he said.