6th Feb 2020 12:04
(Alliance News) - System1 Group PLC on Thursday said it will return GBP1.5 million through a share buyback programme, despite issuing a profit warning for financial 2020.
Shares in the company were down 23% at 222.50 pence each at midday in London.
The online market research agency said trading to date in the fourth quarter of financial 2020 has been disappointing due in the "ongoing transition of sales talent, and subsequent disruption and decline in adhoc revenue from smaller clients."
The London-based company, as a result, is predicting a slight year-on-year drop in gross profit for the year ending March 31. Combined with increased investment costs, normalised pretax profit, which excludes share based payments and AdRatings database, is anticipated to be materially below current market expectations.
In financial 2019, System1's gross profit amounted to GBP22.1 million and underlying pretax profit, excluding AdRatings, totaled GBP3.7 million.
System1 said it continues to invest heavily in its AdRatings database, sales talent, digitisation and automation and, as a result, underlying overhead costs, excluding share based payments and AdRatings, are expected to increase 4% to 6% over financial 2020.
The company currently has GBP4.2 million in cash and no debt. It plans to conduct the GBP1.5 million share buyback after its trading update in April. subject to its share price and cash balance at the time.
By Tapan Panchal; [email protected]
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