SysGroup claims growth surge validates buy-and-build blueprint

Liverpool-headquartered MSP sees revenues surge 53 per cent to £19.5m

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IT managed services provider SysGroup claims its buy-and-build strategy has been vindicated by its latest annual numbers, which show a boom in revenues and underlying profits.

In its year to 31 March 2020, the Liverpool-headquartered, LSE-listed firm doubled adjusted EBITDA to £2.8m on revenues that soared 53 per cent to £19.5m.

Some £15.1m (or 77 per cent) of the top line was drawn from recurring managed IT services revenues, with £4.4m generated from value-added resale.

In a stock exchange announcement, CEO Adam Binks (pictured) said the impact of COVID-19 has presented SysGroup with "significant opportunities", claiming businesses are seeing the value of outsourced managed IT services "more than ever before".

SysGroup branched out from its focus on datacentre and cloud last June by acquiring managed connectivity provider Hub Network Services (HNS) for £1.45m.

Work to integrate the capabilities and process of HNS - along with 2018 acquisition Certus - into a single platform under a unified offering is "largely complete", SysGroup said, adding that it continues to evaluate further acquisitions.

Founded in 2007, Cisco, Dell, HP, Veeam, VMWare, Fortinet, Kaspersky and WatchGuard partner SysGroup harbours ambitions of becoming "the leading provider of managed IT services to businesses in the UK", positioning itself as an extension of a customer's existing IT department. It now has offices in London, Newport, Bristol and Telford.

Chairman Michael Edelson said SysGroup's growth surge "validates the success of management's buy-and-build strategy".

"We will continue to consider further acquisitions which fit our strict criteria and help us to meet our goals and believe that the current environment will present further opportunities," he said.

Binks added: "As we look ahead, I remain optimistic for continued growth, supported by a robust balance sheet, a diverse customer base and the growing relevance of our solutions. We will be focusing on those organisations that have learned the lessons of lockdown and need a trusted partner to help them transition through the complexities of the technological landscape. Those organisations that think this was just a blip and go back to the old ways of doing things will not survive in our new world."