System1 Group PLC (LON:SYS1) shares fell on Friday morning as the company reported 68% decline in profit, as clients cut spending on market research and costs rose.
The AIM-listed firm said for the year ended 31 March 2018, its gross profit declined 18% to £22.2mln from £26.9mln, and pre-tax profit fell by 68% to £1.99mln from £6.28mln a year ago.
READ: System1 Group shares drop as it warns on first half profits as slower than expected start to the year has continued
Revenue declined 18% to £26.9mln from £32.8mln a year ago.
The board proposed to pay a final dividend of 6.4p per share which is maintained at the same level as the prior year despite the lower profits.
John Kearon, chief executive officer said the company was slow to appreciate the speed and scale of change occurring in the market.
”The realisation that client budget-cuts were significant and probably permanent galvanised us to react, rethink and reinvent,” Kearon said.
He added: “The result, we believe, is a more competitive and scalable offer, with the potential to build a much larger and more stable business over the years to come. 2018-2019 will be a period of transition as we seek to sell-in our new and modified product offers against a challenging market backdrop."
In morning trading, System1 shares fell 10% to 270.0p.