SysGroup expecting to post 'strong' EBITDA despite 'expected decline in revenue'

The IT services, cyber security and cloud hosting provider says the figure is line with market expectations

The SysGroup is expecting to post a "strong" adjusted EBITDA of more than £2m despite expecting a decline in revenue.

The IT services, cyber security and cloud hosting provider has provided a trading update for the period ended 31 March 2022.

It says it expects to report an adjusted EBITDA of £2.8m.

The company says this is despite the "expected decline in revenue compared to the prior period".

'External challenges faced throughout the industry'

It said the industry has faced external challenges over the last two years, with customers deferring spending on enhanced IT projects.

But during the latter part of H2 FY22, SysGroup saw "enhanced" trading conditions with both new and existing clients.

Whilst trading conditions are not yet at pre-pandemic levels, SysGroup said customers are "once again starting to feel confident to commit to spending on enhancements to their essential IT services".

The group also ended the financial year with £3m of net cash which is ahead of market expectation.

Adam Binks, SysGroup CEO, said: "This is a very robust performance given the headwinds faced for a prolonged period of time. Our business has proved to be resilient which reflects both the quality of our offering and the core nature of the services that we provide."

SysGroup is 'well positioned'

SysGroup also said the acquisition of Truststream has added further capabilities to its managed security service offering.

"The group is well positioned to deepen it existing client relationships and is looking forward to the future," it said.

Binks added: "The strong EBITDA performance and cash generation demonstrate the operational strength and financial discipline of the group and investments in prior periods mean that we are ready to scale as conditions improve. We will do so both organically and through further earnings enhancing M&A, as evidenced by the post year end acquisition of Truststream Security Solutions.

"We have started to see the first green shoots of recovery in customer spending and look forward to the future with confidence."