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System1 surges as profits recover after difficult prior year

The AIM-listed firm, which specialises in market research, said in a trading update for the year ended 31 March that its pre-tax profits were up 80% year-on-year at £3.7mln
Market research
Client cut backs on market research spending and rising costs in the previous full year caused profits to plunge 68% to £1.99mln

System1 Group PLC (LON:SYS1) shares surged in early trading on Monday after its profits recovered in its latest 12 months following a plunge the year before.

The AIM-listed firm, which specialises in market research, said in a trading update for the year ended 31 March that its pre-tax profits were up 80% year-on-year at £3.7mln.

The results stood in contrast to last year’s profit figure, which plunged 68% to £1.99mln as clients cut back on market research spending and costs rose.

READ: System1 Group shares fall as marketing agency reports 68% decline in profit

However, over the last 12 months System1 said it had “tightly controlled” its operating costs, which were 9% lower year-on-year, and had ended the year with a cash balance of £4.3mln despite a £3.1mln investment in its Ad Rating subscriptions service, which allows clients to compare the effectiveness of their adverts with competitors.

Gross profit, the company’s main top-line performance measure, was down 1% in the year at £22mln, although System1 said in the second half the figure was 4% ahead of the prior year.

Looking ahead, the company said it would continue investing in the Ad Rating service, with a wide scale launch planned in the new financial year.

Shares were up 13% at 224p.

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System1 Group Timeline

Newswire
January 16 2015

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