The stock continues its recent bad run as trading "continues to be worse than anticipated", leading to a downgrade in forecasts.
Companies: System1 Group
System1 (LON: SYS1) has started 2018 off on the wrong foot as it warned on full-year profits sending the stock into a nosedive on Monday morning.
Shares in SYS1 were down 23% at the time of writing after Management said that further to its H1 18 profit warning in October, which sent shares into a spiral, Q3 trading has "continued to be worse than anticipated".
As a result, it issued a grim profit warning...
"Subject to its normal lack of revenue visibility, the Company now anticipates Gross Profit for the year to 31 March 2018 will be around 20% less than the prior year."
It also warned overhead growth is likely to be in the "low to mid-single digits" and it expects:
"Profit before Tax for the full year to be a little over break-even (2016/17: £6.3m)."
Despite the tough times in the UK, the Group did manage to win its first clients in Continental Europe and in the US.
The advertising and marketing agency saw a rally in its share price in the first half of 2017 but this soon reversed and now trades at c. 306p, a third of the 1020p price in May of last year. Prior to today's downgrades consensus was forecasting Net Profits of c. £3.7m from Revenues of £30m. It has a current operating margin of 19% and a cash balance of £4.6m with no debt.