MSP SysGroup weathers COVID with EBITDA increase

SysGroup has published buoyant H1 results despite disruption from the pandemic, with EBITDA up nearly a fifth.

Revenue for the half ending 30 September 2020 was down 2.7 per cent to £9.01m, while gross profit dipped 1.7 per cent to just under £4m.

But adjusted EBITDA was up 19 per cent to £1.41m, largely as a result of reduced exceptional items.

Adam Binks, CEO at SysGroup, said: "I am pleased to be able to report on a period that has demonstrated the stability, agility and relevance of our business during a global crisis which has resulted in considerable uncertainty for many businesses.

"Our team has worked tirelessly to continue to provide a robust and uninterrupted service to our customers whilst adapting to new ways of working and, for that effort, I am extremely grateful.

"Whilst COVID-19 has had a marked impact on many sectors, it has created a huge opportunity for the IT services sector.

"The value of robust, flexible and secure IT has never been so important to businesses; outsourced managed services has been recognised as a key component of many businesses' success, growth and continuity."

SysGroup said that its product resale business dropped slightly to £1.55m as businesses reduced their capex spend earlier in the year but said this was partially offset by a "slight increase" in recurring managed services revenue.

Recurring revenue made up 83 per cent of sales in the half, up from 80 per cent in the same half last year.

The firm said that it has now integrated the acquisitions of Certus IT and Hub Network Services and exited the "lower margin" customer contracts that came with the two businesses.

SysGroup said it expects to hit its full-year guidance, adding that it has not made use of the furlough scheme but has moved to a remote working model and frozen recruitment.