SysGroup CEO bullish despite COVID impact on sales and customer spending

CEO Adam Binks remains upbeat as rise in before tax adjusted profits is recorded

SysGroup's sales dipped for the year ending 31 March, caused by "the impact of the pandemic" on its sales team and customer spending according to the company's CEO.

Revenue stood at £18.13m for the year, down seven per cent from £19.49m, though the company's adjusted profit before tax figure was recorded as £2.09m, an 18 per cent rise from £1.76m.

In his report, CEO Adam Binks said the pandemic meant customers had "deferred spending decisions", coupled with its sales teams being "unable to have in-person interactions", contributing to a fall in revenue.

"The business has performed well over the last year given the significant challenges posed by a full 12-month period of lockdown restrictions," he said.

"Improved profit and steady revenue figures, despite ongoing investment for the future growth of SysGroup, reflect our high levels of recurring revenues and strong operational controls.

"The pandemic has made our industry more relevant than ever so as lockdown restrictions ease and greater economic certainty returns, I have no doubt that investment into IT will be a major priority for many business leaders."

Adjusted EBITDA was up four per cent from £2.81m to £2.91m, which Binks said was "particularly impressive in light of the ongoing investment into the business", but gross profit slipped to £10.5m from £11.2m.

The company had net cash of £1.88m, an increase from net debt of £0.07m the prior year, with adjusted earnings per share of 3.5p, up marginally from 3.4p.

SysGroup has invested significantly in growth recently, expanding with a new Manchester office which will create up to 10 new roles in the first 12 months, with plans to create an additional 20 roles in the next three years.

A key focus for the managed IT services and cloud hosting company has been on "the full integration of its recent acquisitions", it says, having made several additions in recent years including the £9m purchase of Certus IT in February 2019 and Hub Network Services for £1.45m in June 2019.