System1 profits rise as cost-cutting efforts pay dividends

2nd Nov 2018 09:57

(Sharecast News) - Marketing services group System1 saw profits rise 28% in the first half of its trading year after cost-cutting in its consulting business helped offset lower revenues.System1 told investors on Friday that pre-tax profits for the six months ended 30 September had come in at £1.08m, despite a 5% slip in revenues to £13.2m.The AIM-listed outfit, which saw a sharp decline in profits in its last trading year, reduced staffing numbers in its consulting business 19% to 140 throughout the half, helping it reduce overheads by 18%.System1 said its cost-cutting exercises had helped the division double its profits and offset a £1.1m loss in its ad ratings business as a result of an increased level of investment spending.The group kept its interim dividend unchanged at 1.1p per share but warned shareholders that may fall during the second half depending on the scale of its further investments in ad ratings.Chief executive John Kearon, said: "We are excited about our new ad ratings service based on our tried and tested core IP - for its future potential both to support the existing consulting business, as well as provide a new scalable revenue stream.""Meanwhile we believe that as our new product configurations and more competitive pricing take hold, our existing business will continue to stabilise and in time return to growth."As of 1000 BST, System1 shares were untraded at 180p.