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System1 Betting Big on Ad Ratings Launch

October 15 2018

In a trading update for the six months to September 30th, UK-based insight and advertising agency System1 has announced a jump in underlying profit, but a slower than hoped turnaround for its key indicator, gross profit. Meanwhile the firm is investing heavily in its new Ad Ratings product.

John KearonSystem1 Group, previously known as BrainJuicer, said half-year Gross Profit ('our main top-line performance indicator') stabilized but at a slower rate than anticipated. It expects the figure to be about 5% down on H1 2017. However, due to tight control of operating costs, underlying profits are expected to be around £1.9m, up 73% from £1.1m a year previously.

This excludes the heavy investment made in the firm's new Ad Ratings subscription service, announced in June - System1 has pumped £1.7m into this in the six months, and said 'further material investment' would be made in the next half year, supporting a 'phased launch' scheduled for the end of the financial year (ie Jan to March 2019).

The Ad Ratings investment has been the main contributor to a fall in the company's still healthy cash balance, from £5.8n to £3.6m within the last six months. System1 has no debt.

The results follow a difficult year for the company (ending 31st March 2018), with sharp declines in revenue (down 18%) and profit before tax (down 68%).

CEO John Kearon is pictured. Web site: www.system1group.com .

All articles 2006-20 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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