System1 Group PLC (AIM: SYS1)

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

Quarterly Trading Update

To accompany the publication of its preliminary results for the year ended March 31 2022, System1 today issues the following update on trading for the quarter ended 30 June 2022 (Q1).

Revenue in Q1 declined 20% on the comparable period last year to £5.2m, and Data products accounted for £2.9m, representing 57% of the quarter's revenue, the highest absolute and relative quarterly performance for our automated predictions since launch in 2020. Compared with the previous quarter, total revenue was 1% lower and Data revenue grew by 21%.

Q1 period-end cash, net of borrowings, was £7.1m, compared with £8.7m at end-March 2022.

Although lower than the comparable period last year, revenue and profitability were broadly in line with the Board's expectations and reflected inflationary pressures, tighter marketing budgets for some customers and continued softness in bespoke consultancy revenues, particularly in the USA where we have only recently filled a number of vacancies in the sales team.

Notwithstanding the Q1 performance, the Board is cognisant of market headwinds, including some customers' withdrawal from Russia and the possibility of recession in major economies that could squeeze their marketing budgets. If that were to materialise, the Company's revenues and profits for remainder of the year would be adversely affected.

As previously announced, the Company intends to return up to £1.5m of excess cash by way of a tender offer at the earliest opportunity. Pending the preparation of the materials for the proposed tender offer, the Company will seek to buy shares back on market, as separately announced today. The tender offer will seek to return the balance of the £1.5m, after deducting the value of shares bought back on market from today until the announcement of the tender offer.

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

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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