System1 Group PLC (AIM: SYS1)

 ("System1", or "the Company", or "the Group")

Trading Update

System1 Group issues the following update on trading for the six months to 30 September 2021. The Company will announce its interim results on 30 November 2021.

The first half of the current year (H1) saw a marked increase in sales of automated data products including Test Your Ad. Data products represented 45% of Revenue in Q2, growing from 28% in Q1. Data Revenue in Q2 exceeded Q1 despite a quarter-on-quarter reduction in total Group Revenue. The Group's H1 Revenue grew 22% on last year to £12.3m.

Adjusted Operating Costs* grew as planned as the Group continued to invest in automated products, technology and business development, increasing by 10% over the comparable period to £9.0m. 

Adjusted Pre-tax Profits are expected to be some £1.3m in H1, approximately £0.9m higher than in the comparable period. Statutory Pre-tax Profits are expected to be £1.3m compared with a loss of £0.4m in the first half of last financial year.

Period end cash, net of borrowings, was £7.3m, compared with £6.5m at end-March 2021.

We have been delighted by the continuing adoption by both new and existing customers of System1's repeatable, fast-turnaround and scalable data products as they displace the historic large bespoke consultancy projects that dominated the Group's activity until H2 last year.  We believe that the growth in data revenues signals tangible progress towards our strategic goals, and that these revenues will in due course more than offset the reduction in bespoke consultancy projects as more customers switch to using our automated data products.

In line with previous communications, the Group intends after the interim results announcement to initiate a share buyback programme to repurchase its shares over an extended period, in order to enhance shareholder returns and to satisfy obligations in relation to employee share schemes.

The Company can be found at www.system1group.com.

* Adjusted Operating Costs exclude impairment, interest, share based payments, bonuses, severance costs and government support related to the Covid pandemic. Adjusted figures exclude items, positive and negative, that impede easy understanding of underlying performance.

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication of this announcement, this information is now considered to be in the public domain.

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