Almost a quarter of the share price been wiped off in early morning trading.
Companies: System1 Group
Market research company System1 (LON: SYS1) will hold their AGM today, where Chairman Ken Ford will make announcements to shareholders regarding the companies lowered profit expectations for the current financial year.
The company released an announcement this morning ahead of the meeting, which has seen shares dive over 23%.
The slower than expected start to the financial year has continued, with the Group expecting H1 gross profit to be up to 11% lower than the prior year. A number of contributing factors including a more competitive market are noted to be the cause.
Costs are also expected to grow; 15% for H1 or 10% over the full financial year. This, they say, is due to "continued investment in senior hires in the US, and one-off severance costs."
Despite the slow start and "lack of revenue visibility", Management expects Gross Profit to move back to growth in H2.
The announcement went on to say...
"As of now, we anticipate a little over break-even in Profit Before Tax in H1 (prior year: £2.8m) and a decline in full year Profit Before Tax of approximately 10-15% from the £6.3m achieved last year."
A more detailed announcement on H1 results will be released late October.
Full year reports for the 5 years to 2017 present healthy growth figures across the board, with revenue, operating profit, net profit and working capital all growing steady throughout this period. This would explain the high PE ratio of 21x against an industry median of 13x, as general consensus shows dividend growth and EPS growth both hovering around 10%. for the coming 2 years.