Source - LSE Regulatory
RNS Number : 7901V
System1 Group PLC
06 December 2023
 

Press Release

6 December 2023

 

System1 Group PLC (AIM: SYS1)

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

 

Unaudited interim results for the six months ended 30 September 2023

 

System1 Group the marketing decision-making platform www.system1group.com announces its unaudited interim results for the six months ended 30 September 2023 ("H1", "H1 FY24").

 



H1

FY24

H1

FY23

Change**



£m

£m

%

Management Basis*

 









Revenue


13.3

 10.5

27%

Gross Profit


11.7

 8.5

37%

Adjusted Operating Costs


(9.8)

 (8.9)

10%

Adjusted Profit/(Loss)before Taxation


1.9

 (0.4)

NM






Statutory Basis

 









Revenue


13.3

 10.5

27%

Gross Profit


11.7

 8.5

37%

Operating Costs


(11.1)

 (8.6)

27%

Other Operating Income


0.3

 0.1

47%

Profit before Taxation


0.9

 0.0

NM

Income Tax Expense


(0.3)

 (0.2)

46%

Profit/(Loss) for the Period


0.6

 (0.2)

NM

Diluted Earnings per Share


4.9p

(1.7p)





 

* Adjusted Operating Costs exclude impairment, other interest, share based payments, bonuses and commissions, severance costs, IP litigation costs, and other staff costs (sabbatical and holiday provisions). Adjusted Profit/(Loss) Before Taxation is Gross Profit less Adjusted Operating Costs and excludes Other Operating Income. Adjusted figures exclude items, positive and negative, that impede easy understanding of underlying performance. Details can be found in note 12 of the interim statements.

 

** Percentages and totals are based on numbers rounded to £'000s

 

H1 Highlights

·      Platform revenue (Predict Your and Improve Your) grew 44% on H1 FY23 to £10.9m and represented 82% of total revenue (H1 FY23: 73%). Total revenue increased by 27%.

·      Revenue growth in all regions including the Americas.

·      New partnerships launched with Pinterest, Finecast, JC Decaux and Teads, contributing to strong growth in ad testing revenue.

·      Increased focus on non-TV format ad testing with the launches of TYA Digital, TYA Audio.

·      Innovation product launches during calendar 2024.

·      136 new platform clients in H1 (H1 FY23: 69) and improved retention of existing customers.

·      Cost of sales down 17% due to platform and supply chain efficiencies.  

·      Gross profit margin increased to 87.8% (H1 FY23: 81.5%).

·      Average H1 headcount down 6% to 143 (H1 FY23: 152).

·      Benefits of operational gearing and our scalable business model showing through: Adjusted profit before taxation increased to £1.9m (H1 FY23: £0.4m loss); £0.9m statutory profit before tax (H1 FY23: £0.0m).

·      £0.6m free cash flow in H1 (H1 FY23: outflow of £2.6m). Cash balance of £6.3m as at 30 September 2023 (31 March 2023: £5.7m).

·      Diluted and basic earnings per share 4.9p (H1 FY23 diluted and basic loss per share: 1.7p).

 

Current Trading & Outlook

·    Second half of the year has started well, and at this stage we expect H2 revenue to exceed H1.

·    Gross profit margin to date remains close to that achieved in H1, and well above recent historic levels.

·    Despite a difficult economic environment in some key markets, and challenging conditions for media owners and advertisers, we believe System1 can continue to grow profitably by gaining market share from large incumbents that we believe have less predictive products.

 

 

System1 CEO James Gregory commented:

 

"One year after our strategic review there are signs that the Company's fame-building activity and renewed focus on execution are working. We are helping even more of the world's largest advertisers make confident creative decisions and won over 100 new clients in H1, including a global top three advertiser, a leading global breakfast foods company, a leading European car manufacturer, a leading budget airline, a 'big four' UK supermarket, and a multinational consumer goods company. Platform revenue comprised 82% of total revenue in H1, ahead of our plan and well above last year's level."

 

 

Further information on 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.

 

For further information, please contact:

 

System1 Group PLC

Tel: +44 (0)20 7043 1000


James Gregory, CEO

Chris Willford, Chief Financial Officer






Canaccord Genuity Limited

Tel: +44 (0)20 7523 8000

Simon Bridges / Andrew Potts/ Harry Rees


 



 

Interim Statement

 

 

Financial Performance

 

KPIs

H1 FY24

H1 FY23

Platform Revenue as a % total Revenue

82

73

Platform Revenue growth %

44

33

Gross Profit % Revenue

87.8

81.5

Adjusted EBITDA £m 1

1.7

0.8

Adjusted EBITDA % Revenue

13

8

"Rule of 40" 2

           57

42 

Free cash flow3

0.6

(2.7)

Net cash £m

6.3

5.7


 


1 Statutory profit before taxation + share-based payments + interest, depreciation and amortisation

2 Platform Revenue growth % + Adjusted Group EBITDA % Group Revenue

3 Cash flow after interest and before debt raising/reduction, buybacks/dividends.

 

Total revenue increased by 27% and Platform revenue (Predict Your and Improve Your) grew 44% on H1 FY23 to £10.9m and represented 82% of total revenue (H1 FY23: 73%).  Revenue grew in all regions including the Americas. In the US platform revenue rose by 32% and total revenue by 22%.

 

New "fame" partnerships were launched with Pinterest, Finecast, JC Decaux and Teads, contributing to strong growth in ad testing revenue, which was 48% higher than in H1 FY23.

 

We launched new non-TV ad testing formats in H1 including TYA Digital and TYA Audio and are planning  Innovation product launches during calendar 2024.

 

Our fame-building, products and partnerships helped the Company to win 136 new platform clients in H1 (H1 FY23: 69). Furthermore, we retained 128 existing H1 platform clients in H1 compared with 99 in H1 FY23.

 

Gross profit margin increased from 81.5% in H1 FY23 to 87.8% due to platform and supply chain efficiencies, price increases and favourable product and geographic mix versus the comparable period.

 

Adjusted Operating Costs increased by 10% versus H1 last year due to increased marketing expenditure, costs relating to enhanced ongoing sector and geographic coverage of the TYA Premium database, and lower net capitalisation of IT development costs. 

 

Statutory basis costs increased by £2.4m on H1 FY23, reflecting, in addition to the Adjusted Operating Costs, performance-related pay compared to a very low H1 FY23 base, adverse currency effects, and a £0.1m provision against rent deposits made by System1 in respect of WeWork office leases.

 

Overall average headcount decreased by 6% to 143 FTE with increases in Sales & Marketing more than offset by reductions in Operations and IT.

 

Intellectual Property Litigation

On 30 June 2023 the Company announced that a settlement had been reached with System1 Inc regarding the use of the "System1" trademark. The parties have signed a global agreement which governs the co-existence of their respective use of the "System1" mark in connection with their operations. As part of this agreement, the Company is receiving a fixed undisclosed payment payable in instalments. The first instalment due under this agreement was received in August 2023 and has been recognised in other operating income. The parties have agreed to keep further detail of their agreement confidential.

 

Tax

The Group has recognised a tax charge of £0.3m in the six months to 30 September 2023 (H1 FY23: tax charge of £0.2m). The H1 FY24 figure includes a receipt of £0.2m in respect of R&D tax credit claims in the UK. The tax charge arises from trading profits in non-UK jurisdictions which cannot be offset against trading losses elsewhere.

 

Earnings Per Share

Diluted and Basic Earnings per Share improved from a loss of 1.7p to an H1 FY24 earnings per share of 4.9p, in line with the increase in profits for H1 FY24.



 

 

Cash

The Group ended the period with cash balances of £6.3m, and no borrowings (FY23: net cash of £5.7m). Free cash flow after property lease costs and interest income amounted to an inflow of £0.6m in the first half (H1: FY23: outflow of £2.7m).

 

Balance Sheet

Total equity increased to £9.3m (31 March 2023: £8.6m), arising from the year-to-date post-tax profit of £0.6m and a small £0.1m gain on foreign currency reserves. Intangible assets have increased by £0.3m as a result of the capitalisation of £0.5m of certain platform development costs, offset by amortisation charges on completed projects.

 

Current Trading & Outlook

The second half of the year has started well, and at this stage we expect H2 revenue to exceed H1. The gross profit margin in the third quarter to date remains close to that achieved in H1, and well above recent historic levels. Despite a difficult economic environment in some key markets, and challenging conditions for media owners and advertisers, we believe System1 can continue to grow profitably by gaining market share from large incumbents that we believe have less predictive products.

 

James Gregory

Chief Executive Officer


Chris Willford

Chief Financial Officer

 



 

Condensed Consolidated Income Statement

for the 6 months ended 30 September 2023

 


Note

Sep-23

Sep-22

 


£'000

£'000





Revenue

3

13,305

          10,496

Cost of sales


(1,620)

           (1,946)

Gross profit


11,685

          8,550





Administrative expenses


(11,070)

           (8,696)

Other operating income


330

                 224



 


Operating profit

 

945

            78





Finance expense


(20)

               (84)



 


Profit/(Loss) before taxation

 

925

            (6)





Income tax expense


(298)

             (204)





Profit/(Loss) for the period

 

627

            (210)





Attributable to the equity holders of the Company

 

627

 

            (210)





Earnings per share attributable to equity holders of the Company

 







Basic earnings/(loss) per share

4

4.9p

(1.7p)

Diluted earnings/(loss) per share

4

4.9p

(1.7p)

 



 

CONDENSED Consolidated Statement of Comprehensive Income

for the 6 months ended 30 September 2023

 



Sep-23

Sep-22

 


£'000

£'000





Profit/(loss) for the period

 

 627    

          (210)





Other comprehensive income:

 



Items that may be subsequently reclassified to profit/(loss)

 

Currency translation differences on translating foreign operations

57

            447

Other comprehensive income for the period, net of tax

57

            447





Total comprehensive income for the period attributable to equity holders of the Company

684

   

   237





 



 

CONDENSED Consolidated Balance Sheet

as at 30 September 2023

 

Registered no. 05940040

 


Note

Sep-23

Mar-23

 


£'000

£'000





ASSETS

 



Non-current assets

 



Property, plant, and equipment

7

735

       1,162

Intangible assets

8

1,650

          1,396

Deferred tax asset


132

          203



2,517

       2,761

Current assets

 



Contract assets


170

          102

Trade and other receivables


6,563

       6,344

Income taxes receivable


74

55

Cash and cash equivalents


6,281

       5,719



13,088

     12,220





Total assets

 

15,605

     14,981





EQUITY

 



Attributable to equity holders of the Company

 


Share capital

10

132

          132

Share premium account


1,601

       1,601

Merger reserve


477

          477

Foreign currency translation reserve


480

         423

Retained earnings


6,641

       5,974

Total equity

 

9,331

       8,607





LIABILITIES

 



Non-current liabilities

 



Provisions


329

          353

Lease liabilities

9

-

          362



329

       715

Current liabilities

 



Provisions


96

          101

Lease liabilities

9

922

       1,094

Contract liabilities


796

          764

Trade and other payables


4,131

       3,700



5,945

       5,659



 


Total liabilities

 

6,274

     6,374

Total equity and liabilities

 

15,605

     14,981





 



 

CONDENSED Consolidated Statement of Cash Flows

for the 6 months ended 30 September 2023

 


Note

Sep-23

Sep-22

 


£'000

£'000





Net cash generated from/(used in) operations

11

      1,900

      (1,297)

Tax paid


        (252)

        (187)

Net cash generated from/(used in) operating activities

 

      1,648

      (1,484)





Cash flows from investing activities

 



Purchases of property, plant, and equipment

7

         (38)

         (3)

Purchase of intangible assets

             8

         (500)

         (654)

Net cash used by investing activities

 

       (538)

       (657)



 


Net cash flow before financing activities

 

      1,110

      (2,141)





Cash flows from financing activities

 



Interest paid


         (20)

         (84)

Property lease liability payments


       (533)

       (433)

Purchase of own shares


-

(135)

Net cash used by financing activities

 

       (553)

       (652)





Net increase/(decrease) in cash and cash equivalents

 

      557

      (2,793)





Cash and cash equivalents at beginning of period

 

      5,719

      11,174

Exchange gain on cash and cash equivalents


       5

       683





Cash and cash equivalents at end of period

 

    6,281

    9,064







Sep-23

Sep-22

 


£'000

£'000





Net cash flow before financing activities


      1,110

      (2,141)

Net cash flow for property leases


       (553)

       (468)

Operating cash flow


      557

     (2,609)





 



 

Consolidated Statement of Cash Flows (continued)

for the 6 months ended 30 September 2023

 

 

Consolidated Movements in Net Cash/(Debt)



Cash and cash equivalents

Borrowings

Lease liabilities

Total

 


£'000

£'000

£'000

£'000







At 1 April 2022

 

      11,174

    (2,500)

    (2,508)

     6,166

Cash flows


      (2,793)

             -

        478

     (2,315)

Non-cash charges






Interest on lease liabilities


             -

             -

        (45)

        (45)

Exchange and other non-cash movements


       683

             -

            -

      683

At 30 September 2022

 

    9,064

    (2,500)

    (2,075)

     4,489

 

Consolidated Movements in Net Cash/(Debt)



Cash and cash equivalents

Borrowings

Lease liabilities

Total

 


£'000

£'000

£'000

£'000







At 1 April 2023

 

      5,719

    -

    (1,456)

     4,263

Cash flows


      557

             -

        553

     1,110

Non-cash charges






Interest on lease liabilities


             -

             -

        (20)

        (20)

Exchange and other non-cash movements


       5

             -

            1

      6

At 30 September 2023

 

    6,281

    -

    (922)

     5,359



 

Consolidated Statement of Changes in Equity

for the 6 months ended 30 September 2023

 



Share capital

Share premium account

Merger reserve

Foreign currency translation reserve

Retained earnings

Total

 


£'000

£'000

£'000

£'000

£'000

£'000

 








At 1 April 2022

 

        132

      1,601

        477

       196

      5,857

      8,263

 








Loss for the period


            -

             -

            -

            -

      (210)

      (210)

Other comprehensive income:








- currency translation differences


            -

             -

            -

          447

            -

          447

 







 

Total comprehensive income

 

        -

-

-

447

(210)

      237

 








Transactions with owners:








Employee share options:








- value of employee services


            -

             -

            -

            -

          182

          182

Purchase of own shares






(135)

(135)

 








At 30 September 2022

 

        132

      1,601

        477

        643

      5,694

      8,547

 








At 1 April 2022


        132

      1,601

        477

       196

      5,857

      8,263

 








Profit for the period


            -

             -

            -

            -

      404

      404

Other comprehensive income:








- currency translation differences


            -

             -

            -

          227

            -

          227

 







 

Total comprehensive income


        -

      -

        -

        227

      404

      631

 








Transactions with owners:








Employee share options:








- value of employee services


            -

             -

            -

            -

        (153)

         (153)

Purchase of own shares






(134)

(134)

 








At 31 March 2023


        132

      1,601

        477

        423

      5,974

      8,607

 







 

 







 

At 1 April 2023

 

        132

      1,601

        477

       423

      5,974

      8,607

 








Profit for the period


            -

             -

            -

            -

      627

      627

Other comprehensive income:








- currency translation differences


            -

             -

            -

          57

            -

          57

 







 

Total comprehensive income

 

        -

      -

        -

        57

      627

      684

 








Transactions with owners:








Employee share options:








- value of employee services


            -

             -

            -

            -

          40

          40

 








At 30 September 2023

 

        132

      1,601

        477

        480

      6,641

      9,331

 










 

Notes to the Condensed Consolidated Financial Statements

for the 6 months ended 30 September 2023

 

System1 Group PLC (the "Company") was incorporated on 19 September 2006 in the United Kingdom. The Company's principal operating subsidiary, System1 Research Limited, was at that time already established, having been incorporated on 29 December 1999. The address of the Company's registered office is 4 More London Riverside, London, UK SE1 2AU. The Company's shares are listed on the AIM Market of the London Stock Exchange ("AIM").

 

The Company and its subsidiaries (together the "Group") provide predictive marketing data and market research consultancy.

 

The Board of Directors approved these interim financial statements for the six months ended 30 September 2023 for issuance on 6 December 2023.

 

The financial information set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006 and is unaudited. The Group's latest statutory financial statements were for the year ended 31 March 2023 and these have been approved by the Board of Directors and filed with the Registrar of Companies. These accounts, which contained an unqualified audit report under Section 495, did not include a reference to any matters to which the auditor drew attention by way of emphasis of matter and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.

 

1.   Basis of Preparation

This condensed consolidated interim financial information has been prepared in accordance with UK adopted IAS 34 Interim Financial Reporting and on the going concern basis. The Group is mindful of the current economic backdrop in Europe, and the Board continues to review the performance of the Group monthly, and senior management has a weekly assessment of sales revenue and gross profit. The Group also prepares and reviews cash flow forecasts and is confident that the going concern assessment remains appropriate. The results presented in this report are unaudited and they have been prepared in accordance with the recognition and measurement principles of UK-adopted International Accounting Standards that are expected to be applicable to the financial statements for the year ending 31 March 2024 and on the basis of the accounting policies to be used in those financial statements. The condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements, being the statutory financial statements for System1 Group plc, as at 31 March 2023, which have been prepared in accordance with UK adopted International Accounting Standards with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.

 

The preparation of financial statements in accordance with UK-adopted International Accounting Standards ("UK-adopted IFRS") requires the use of certain critical accounting estimates.

 

2.   Principal accounting policies

The principal accounting policies adopted are consistent with those of the financial statements for the year ended 31 March 2023.



 

 

3.   Segment Information

The financial performance of the Group's geographic operating units ("Reportable Segments") is set out below.

 



Sep-23

Sep-22

 


Revenue

Revenue



£'000

£'000





By location of customer

 



Americas


      4,748

      4,050

United Kingdom


      5,610

      3,844

Rest of Europe


      2,182

      1,864

APAC


         765

         738



    13,305

    10,496

*Segmental revenue is revenue generated from external customers and so excludes intercompany revenue and is attributable to geographical areas based upon the location in which the service is delivered.

 

Consolidated balance sheet information is regularly provided to the Executive Directors while segment balance sheet information is not. Accordingly, the Company does not disclose segment balance sheet information here.

 



Sep-23

Sep-22

 


Revenue

Revenue
*As restated



£'000

£'000





By product variant

 



Predict Your (data)


      9,036

      6,175

Improve Your (data-led consultancy)


1,902

1,447

Standard (platform revenue)

 

10,938

7,622

Other consultancy (non-platform)


2,367

2,874



    13,305

    10,496





By product group

 



Communications (Ad Testing)


      10,377

      7,022

Brand (Brand Tracking)


      1,420

      1,865

Innovation


      1,508

      1,609



    13,305

    10,496

*Following the expansion of the Group's data and platform-led offering, revenue segments in respect of "By product variant" were revised during the second half of the year ended 31 March 2023 to reflect the new structure of the Group's internal reporting. The comparatives have been re-stated accordingly.

 

4.   Earnings Per Share


Sep-23

Sep-22

 



Profit/(Loss) attributable to equity holders of the Company, in £'000

627

(210)

Weighted average number of Ordinary Shares in issue

12,678,929

12,717,762

Basic earnings/(loss) per share

4.9p

(1.7p)




Profit/(Loss) attributable to equity holders of the Company, in £'000

627

(210)

Weighted average number of Ordinary Shares in issue

12,678,929

12,717,762

Share options*

12,823

13,000

Weighted average number of Ordinary Shares for diluted earnings per share

12,691,752

12,730,762

Diluted earnings/(loss) per share

4.9p

(1.7p)

     *The impact of share options is anti-dilutive in the period ended 30 September 2022 due to the loss.

 

5.   Headcount

The average number of staff employed by the Group during the period was as follows:



Sep-23

Sep-22

 


No.

No.





Sales and marketing


          50

          47

Operations


          39

          45

IT


          32

          38

Administration


          22

          22



        143

        152

 

6.   Dividends

The Company did not pay dividends in the six months ended 30 September 2023 and 30 September 2022. The Company does not propose the payment of an interim dividend.

 

No dividends were paid to the Company's directors.



 

 

7.   Property, Plant, and Equipment



Right-of-use assets

Furniture and fixtures

Computer hardware

Total

 


£'000

£'000

£'000

£'000







At 1 April 2022

 





Cost


       3,555

        33

         192

       3,780

Accumulated depreciation


     (1,584)

       (29)

        (113)

     (1,726)

Net book value


       1,971

          4

           79

       2,054







Net book value, at 1 April 2022

       1,971

          4

           79

           2,054

Additions

            -

           -

         -

           30

         30

Foreign exchange

            -

            49

            -

            2

            51

Depreciation charge for the year

        (894)

          (3)

          (76)

          (973)

Net book value, at 31 March 2023

       1,126

       1

            35

           1,162







At 31 March 2023

 





Cost


       2,050

          11

         206

       2,267

Accumulated depreciation


        (924)

        (10)

          (171)

        (1,105)

Net book value


       1,126

            1

           35

       1,162







At 1 April 2023

 





Cost


       2,050

        11

         206

       2,267

Accumulated depreciation


     (924)

       (10)

        (171)

     (1,105)

Net book value


       1,126

          1

           35

       1,162

 






Net book value, at 1 April 2023

       1,126

          1

           35

       1,162

Additions


         -

            -

           38

         38

Foreign exchange


              1

            -

            -

            1

Depreciation charge for the year

        (440)

          -

          (26)

        (466)

Net book value, at 30 September 2023

       687

            1

           47

       735

 






At 30 September 2023

 





Cost


       2,061

          11

         244

       2,316

Accumulated depreciation


        (1,374)

        (10)

          (197)

        (1,581)

Net book value


       687

            1

           47

       735

 






 

 

No impairment charges or reversals have been recorded in the six months ended 30 September 2023, and there have been no substantive changes to leasehold arrangements.



 

 

8.   Intangible assets



Development costs

Software licences

Total

 


£'000

£'000

£'000






At 1 April 2022

 




Cost


       -

       525

       525

Accumulated depreciation


     -

     (143)

     (143)

Net book value


       -

         382

       382






Net book value, at 1 April 2022

       -

         382

       382

Additions


           1,225

 -

           1,225

Depreciation charge for the year

(101)

          (110)

     (211)

Net book value, at 31 March 2023

       1,124

           272

       1,396






At 31 March 2023

 




Cost


       1,225

         525

         1,750

Accumulated depreciation


     (101)

        (253)

        (354)

Net book value


       1,124

           272

           1,396






At 1 April 2023

 




Cost


       1,225

         525

         1,750

Accumulated depreciation


     (101)

        (253)

        (354)

Net book value


       1,124

           272

           1,396

 





Net book value, at 1 April 2023

       1,124

           272

           1,396

Additions


500

           -

         500

Depreciation charge for the year

        (194)

          (52)

        (246)

Net book value, at 30 September 2023

       1,430

           220

       1,650

 





At 30 September 2023

 




Cost


       1,725

         525

       2,250

Accumulated depreciation


        (295)

          (305)

        (600)

Net book value


       1,430

           220

       1,650

 





 

In the 12 months to 31 March 2023, the Company capitalised £1,225k of costs related to the development of the "Test Your" platform (carrying value £865k at 31 March 2023), which completed during the year ended 31 March 2023, and the Supply Chain Automation platform (carrying value £259k at 31 March 2023), which is due for completion in the year ended 31 March 2024. A further £500k has been capitalised in respect of the Supply Chain Automation project in the six months ended 30 September 2023.

 

Development costs in respect of completed projects are tested for impairment where impairment indicators exist. Development costs in respect of ongoing projects are tested for impairment at each reporting date. The carrying value of the assets in each case are assigned to their respective cash generating units for the purposes of assessing future cashflows. The principal assumptions used in the forecasts were the timing and amount of future revenues and cost savings, which were derived from the latest forecasts approved by the Board. Following the assessment, the Board have determined that no impairment of assets is required at 30 September 2023. Capitalised platform development costs are being amortised over a 3-year period.



 

 

9.   Borrowings

 

The analysis of the maturity of lease liabilities is as follows:



Sep-23

Mar-23

 


£'000

£'000





Within one year


      934

      1,031

Later than 1 but no later than 5 years

      -

         457

More than 5 years


             -

 -

Minimum lease payments

      934

      1,488

Future finance charges


       (12)

         (32)

Recognised as a liability

      922

      1,456





The present value of finance lease liabilities is as follows:







Sep-23

Mar-23

 


£'000

£'000





Within one year


      922

      1,094

Later than 1 but no later than 5 years

      -

         362

More than 5 years


 -

 -



      922

      1,456

 

On 22 February 2023, the Company entered into an Overdraft Facility with HSBC. The facility of up to a maximum of £1,500,000, is secured over the Company's trade receivables, and incurs interest at 3% above the Bank of England base rate on drawn balances. The facility has no fixed end date and can be cancelled by either party at any time. During the period ended 30 September 2023, the Company has not drawn any amounts under the facility, and no amounts have been drawn to the date of the signing of these financial statements.

 

10.  Share Capital

The share capital of System1 Group PLC consists only of fully paid Ordinary Shares ("Shares") with a par value of one penny each. All Shares are equally eligible to receive dividends and the repayment of capital and represent one vote at the Annual General Meeting.

 



Sep-23

Mar-23

 


No.

£'000

No.

£'000







Allotted, called up, and fully paid ordinary shares

    13,226,773

         132

 13,226,773

            132

At 1 April and at 30 September













Sep-23

Mar-23

 


Treasury shares

Weighted average exercise price per share

Treasury shares

Weighted average exercise price per share

 


No.

Pence

No.

Pence

Shares held by Treasury

 





At 1 April


        547,844

 

        487,151


Purchase of treasury shares


                    -

 

          60,693


Transfer of shares to satisfy options exercise

         -

            -

      -

         -

At 30 September


        547,844

 

        547,844


 



 

 

11.  Net Cash Generated from Operations



Sep-23

Sep-22

 


£'000

£'000





Profit/(loss) before taxation

 

     925

     (6)

Depreciation of property, plant, and equipment

        466

496

Amortisation and impairment of intangible assets

          246

58

Interest paid


          20

          84

Share-based payment expense


          40

          182

(Increase)/decrease in contract assets


        (69)

        47

Increase in trade and other receivables

      (219)

(1,001)

Increase/(decrease) in trade and other payables

        432

(819)

Increase in deferred income

        32

51

Decrease in provisions


          (29)

          (65)

Exchange differences on operating items

      56

(324)

Net cash generated from/(used in) operations


     1,900

     (1,297)





 

 

12.  Reconciliation between Operating Costs and Adjusted Operating Costs:



Sep-23

Sep-22

 


£'000

£'000





Administrative expenses


          11,070

       8,696

Finance expense


               20

            84

Total operating costs


          11,090

       8,780





Less: Adjusting items

 



Compensation for loss of office


                 35

             -

Bonus and commissions expense


               1,124

            64

Share-based payment expense*


              52

            189

Other interest expense


-

             48

Other staff costs


                (22)

          5

Foreign exchange loss/(gain)


74

(490)

Trademark litigation


               20

            9



               1,283

            (175)





Adjusted operating costs


          9,807

       8,955





*Inclusive of social security accrued in respect of share options

 

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