SysGroup shares were down 1.6% to 26p in early afternoon trading following a reported 19% slide in revenue to £14.7 million in FY 2022 against £18.1 million in FY 2021, alongside a gross profit decline of 15% to £8.9 million from £10.5 million as a result of disruption from Covid-19.
SysGroup highlighted an adjusted EBITDA fall of 3% to £2.8 million compared to £2.9 million, along with an adjusted EBITDA rise of 3% to 19% from 16% year-on-year, and noted its performance delivered in line with management expectations.
The company mentioned an adjusted pre tax profit decrease of 2% to £2.04 million from £2.09 million, with a 192% surge in pre-tax profit to £600,000 against £210,000 the year before.
The firm reported a 16% drop in cashflow from operations to £2.4 million compared to £2.9 million and a net cash jump of 59% to £2.9 million compared to £1.8 million.
“The Adjusted EBITDA performance and strong cash generation in a year when turnover was impacted by COVID highlights the strength of our business model. We have invested to drive future growth whilst maintaining prudent financial discipline throughout the business,” said SysGroup CEO Adam Binks.
“Operationally, the Group is ideally placed to take advantage of conditions as they begin to normalise and we have started to see the early green shoots of such a recovery.”
SysGroup mentioned two acquisitions in its post period-end developments, with the purchase of Edinburgh company Truststream Security Solutions, a cyber security solutions firm which provides Sysgroup with a base in Scotland.
The company also bought Independent Network Solutions, which trades as Orchard Computers and additionally enhances the firm’s Southwest presence and complements its South Wales operations.
“The acquisitions of Truststream and Orchard added further customers, expertise and geographical reach and demonstrate our ongoing commitment to be consolidators in this highly fragmented market,” said Binks.
“M&A activity in our sector is picking up and we believe there will be further opportunities that we can take advantage of during the course of this year.”
“With a clear strategy for both organic and inorganic growth, the Board is confident in the future.”
The technology company said it saw initial “green shoots of recovery” in its outlook, with M&A activity and its client pipeline supporting its businesses going forward in FY 2023.
The company noted an adjusted EPS rise of 3% to 3.6p compared to 3.5p and a basic EPS increase of 80% to 0.9p from 0.5p. SysGroup did not declare a dividend for FY 2022.