26 October 2022

SysGroup plc

("SysGroup" or the "Group")

Trading Update

Notice of Results

SysGroup plc (AIM:SYS), the multi award-winning managed IT services, cyber security and cloud hosting provider, is pleased to provide a trading update for the six month period ended 30 September 2022 (H1 FY23), together with a notice of results.

Group trading performance

The Board is pleased to report a strong trading performance, despite the challenging macro-economic environment. As previously announced, the Group made the successful acquisitions of Truststream and Orchard earlier this year and the integration of both are progressing well. The Board is pleased with the performance of both companies to date and is already seeing early signs of the potential benefits of the cross-sell opportunities.

As such, the Group expects to report revenue for H1 FY23 of £11.32m (H1 FY22: £7.58m) and Adjusted EBITDA¹ of £1.67m (H1 FY22: £1.34m), both of which are in line with current market expectations. Further, the Group also finished the half year with a healthy gross cash balance of £4.22m (H1 FY22: £3.47m) and a net debt position of £1.92m (H1 FY22: net cash of £1.96m) excluding contingent consideration of £3.08m relating to the acquisition of Truststream.

Outlook

The Group has maintained its trading momentum with its sales pipeline continuing to grow and the investment made in FY22 in to our new Manchester sales and marketing hub is starting to materialise. Whilst there is still progress to be made, the team is now at full complement and is making good progress.  Our customers continue to rely on SysGroup as a critical supplier of managed IT services and our teams are as committed as ever to deliver the Group's services.

The need for managed IT services remains prevalent and as businesses increasingly seek to invest in technology to increase efficiencies and improve their margins, SysGroup is ideally placed to capitalise on this growing market opportunity.

The Board is fully committed to SysGroup's business model and remains confident that the Group will meet market expectations for the full financial year.

Notice of results

SysGroup expects to publish its half year results for the six month period ended 30 September 2022 on 21 November 2022.

Adam Binks, Chief Executive Officer, commented:

"I am pleased with the progress that we have made in H1 FY23. To have delivered a revenue and Adjusted EBITDA¹ performance in line with current market expectations, despite the numerous macro-economic challenges, is testament to the resilience of our strategy and hard work of our team.

The benefits of the recent Truststream and Orchard acquisitions are already clear and the enlarged customer base is fully engaged in understanding what additional support we can provide from our enhanced service offering.

I remain grateful for the continued commitment of our teams, who continue to drive the Group forward and support our customers at an increasingly important time."

Notes

1.  Adjusted EBITDA is earnings before interest, taxation, depreciation, amortisation of intangible assets, exceptional items and share based payments.

About SysGroup

SysGroup is a leading provider of managed IT services, cloud hosting, cyber security and expert IT consultancy. The Group delivers solutions that enable clients to benefit from industry leading technologies and delivers managed solutions with security, compliance and governance from the core. SysGroup focuses on a customer's strategic and operational requirements - enabling clients to free up resources, grow their core business and avoid the distractions and complexity of managing IT services.

The Group has offices in Bristol, Edinburgh, Liverpool, London, Manchester and Newport.

For more information, visit http://www.sysgroup.com