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SysGroup grows managed services as H1 revenues dip
Channel player shares financial update indicating it’s lining up behind AI as an area for growth
Half-year results from managed service player SysGroup showed a mixed picture, but there was some momentum in its ambition to develop the business.
The firm shared numbers for the six months ended 30 September, with revenues declining by $3 year-on-year to £10.96m and the period including pre-tax profits of £0.99m. Managed services revenues improved by 8%, now accounting for 84% of the firm’s total business.
The channel player has also been going through some management changes, with the period including the arrival of Heejae Chae as executive chair and Paul Edwards as new non-executive director.
H1 also saw the firm increase its investment in the hardware supporting its SysCloud infrastructure, and embarked on a fresh strategy to be able to deliver more artificial intelligence (AI) and machine learning (ML) solutions, with the business investing in an engineering team to support that ambition.
Chae used his comments accompanying the results to focus on the areas where the business was investing in future growth.
“Our strategy aims to position SysGroup as the go-to end-to-end data solution provider for small and medium-sized businesses [SMBs] embarking on their AI/ML journey,” he said. “AI’s prominence is undeniable, with daily media coverage and increasing demand for AI strategies at the board level of every company.
“We recognise a significant market gap: while many SMBs are eager to adopt AI/ML, they often lack a clear strategy or implementation path. There is a great demand for a partner to support their development of an AI/ML strategy and transition from the current platform.”
Moves made
That conviction that AI and ML will be areas for growth heading into the second half of the year and beyond have been supported by moves made by SysGroup in H1.
“We have made significant investments in both technology and people,” said Chae. “We have recruited a team of ML engineers from industry leaders such as AWS, JP Morgan, Validus and McLaren, and significantly strengthened the senior management team to help take us on this journey, bringing together the right skillsets and mindset.”
His H1 highlights also included the growing revenues coming from managed services, with the recurring business helping to put SysGroup on a firmer footing.
“The core business, which has more than 80% recurring revenues, provides a very solid base from which we can expand, giving us very good revenue certainty and visibility, albeit in the short term we may see our overall bottom-line performance impacted marginally, reflecting the investment we are making in the company to drive revenue growth in future financial years,” said Chae.
“Throughout the organisation, we are reinforcing a culture of customer focus and outstanding service underpinned by innovation, entrepreneurialism and high performance,” he added. “While we are at the early stage of our journey, I am excited at the potential of what we are building at SysGroup combined with the considerable unexploited market opportunity that lays ahead of us.”
