SCISYS posts ‘creditable’ first half as CGI takeover nears

SCISYS posts ‘creditable’ first half as CGI takeover nears

Supplier of software and IT services for space, government, media, commerce and defence sectors SCISYS Group PLC (LON: SSY) posted somewhat downbeat fundamentals alongside solid operational progress, ahead of their anticipated acquisition by CGI Group Holdings Europe Ltd.

The Group was largely preoccupied during the first half by their upcoming takeover by CGI, with a cash offer of 254.15p per share being accepted in August.

There was some good financial progress to report on SCISYS’s behalf, with revenues rising 2% year-on-year to £29.4 million and their order book increasing from £92.2 million to £102.5 million on-year.

However, there was some downward movement in the Company’s fundamentals, with adjusted operating profit contracting from £2.5 million to under half that sum, at £1.2 million, for H1 2019. The overview for SCISYS shareholders was similarly tepid, with adjusted basic EPS narrowing from 6.1p to 2.2p on-year and the Group’s dividend yield decreasing from 1.60% to 0.95% during the course of the first half.

Operationally, the Company reported impressive progress. Their Enterprise Solutions and Defence division delivered ‘record’ first half results, Space division in Germany secured further Galileo ground segment orders of €9.7 million and their Media Solutions division registered a newsroom software deal with ‘a major European broadcaster’.

SCISYS Group comments

Mike Love, Chairman, said,

“We are pleased with our continued solid operational performance and my thanks goes out to the divisions and staff for achieving these results.  Understandably, the takeover offer from CGI that was announced on 14 June significantly occupied SCISYS senior management and resulted in some exceptional expenditure. Notwithstanding this, we have delivered a creditable set of results for the period.”

“Our shareholders voted to approve the CGI takeover on 7 August which we expect to complete in the second half of 2019; we are currently working with CGI to obtain the necessary regulatory approvals for the bid to proceed to the final Court approval stage.”

“The business continues to perform in line with board expectations though, as already highlighted and in common with previous years, we expect our 2019 results to be more weighted towards the second half of the financial year.”

Investor notes

The Company’s shares stand at 254.00p per share 19/09/19 12:30 BST. Analysts from finnCap reiterated their ‘Corporate’ stance on SCISYS Group stock, their p/e ratio is 19.08.

Elsewhere in the tech sector, there were updates from; Pebble Beach Systems Group PLC (LON: PEB), ULS Technology PLC (LON: ULS), Midwich Group PLC (LON: MIDW), ProPhotonix Ltd (LON: PPIX), Frontier Developments PLC (LON: FDEV), Gamma Communications PLC (LON: GAMA) and Maintel Holdings plc (LON: MAI).