25th Oct 2022 11:57
(Alliance News) - System1 Group PLC on Tuesday said its financial performance is set to worsen in its half year, but it has made progress in its US trademark proceedings.
The London-based marketing and brand consultancy company said total revenue, in the six months to September 30, fell 15% year-on-year to GBP10.5 million from GBP12.4 million. The decline was in line with management expectations.
Data revenue grew 38% to GBP6.2 million, making up 59% of total revenue during the period. This was "the highest absolute six-month revenue for our automated predictions and the highest proportion of group revenue since launching in 2020", the firm said.
However, the strong performance in Data was not enough to offset a sizable 46% drop in consultancy, which fell to GBP4.3 million from GBP7.9 million.
Gross profit dropped 18% to GBP8.5 million from GBP10.4 million, as margins were squeezed by region and product mix. The firm now expects to report an adjusted pretax profit of GBP400,000, compared to a profit of GBP1.3 million a year before.
"At statutory pre-tax profit level, the company expects to break even in the first half, down GBP1.3 million on H1 last year," it said.
Its shares rose 9.5% to 230.00 pence each in London on Tuesday morning.
System1 also updated on its US litigation for trademark infringement, competition and deceptive trade practices against System1 LLC. Earlier in October, a US court ruled against LLC's motion to dismiss, meaning the case will proceed.
That same week, the firm also made progress in registering "System1" with the United States Patent & Trademark Office, for use in classes 35 and 38. This matches the registrations the firm also holds in the UK, EU and elsewhere.
System1 will update on its ongoing strategic review alongside its interim results, to be released on November 30.
By Elizabeth Winter; [email protected]
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