Review of strategic options
31 August 2022
System1 Group PLC (AIM: SYS1)
("System1", or "the Company", or "the Group")
Review of strategic options for increasing shareholder value
Following a review of the Company's recent performance, the board of the Company (the "Board") has decided to conduct a review of its strategic options for growing the business and increasing shareholder value (the "Review").
In recent years the Company has invested significantly in developing and launching the "Test Your…" marketing technology platform which provides automated predictions on the effectiveness of advertisements (Test Your Ad), innovations (Test Your Idea) and brand strength (Test Your Brand). In addition, System1 has reshaped much of the business, automated many of its products, raised its industry profile and developed a management team capable of achieving its goal of becoming the world's marketing decision-making platform.
The current strategy has led to significant growth in Test Your Ad revenues for the Group, and the launch of additional products such as Test Your Brand and Test Your Idea. System1 has also developed partnerships with companies including ITV, LinkedIn, Globo and a number of creative agencies to increase the number of customers that benefit from its automated prediction products. At the same time, the Group's revenue from its historic bespoke consulting services has been impacted as customers convert to the faster, cheaper standard products.
The Company estimates that its target markets of predicting and improving advertising, brand and innovation effectiveness represent about $10bn of the ca $90bn spent annually on market research according to ESOMAR (esomar.org). Currently with the Company having less than a 1% share of its target market, the Board believes that System1 is very well placed to enjoy significant growth in the next decade.
Whilst the Company can continue with its current strategy, the Board believes that it is important to ensure that it has explored all strategic options to capitalise on System1's current market opportunity to deliver shareholder value, including considering the value it can create in its current form, the options for increasing organic growth through forming partnerships, and external or internal investment to grow revenue by leveraging the significant investment made in automated predictions technology. The initial conclusions of the Review are expected to be ready by the end of November. The Board has decided to postpone the currently planned tender offer and the current share buyback programme, with decisions on future returns of capital being considered as part of the overall Review.
The Review will be led by the Company's independent Non-executive Directors, supported by the Company's retained advisor, Canaccord Genuity, with another adviser/s if required.
The Board has also today separately announced the appointment of Conrad Bona as a non-executive director of the Company.
This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. Upon the publication of this announcement, this inside information is now considered to be in the public domain and the Company confirms that it currently has no inside information.
The Company can be found at www.system1group.com .
For further information, please contact:
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System1 Group PLC |
Tel: +44 (0)20 7043 1000 |
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John Kearon, Founder and Chief Executive Officer |
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Chris Willford, Chief Financial Officer |
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Canaccord Genuity Limited (Nominated Adviser & Broker) |
Tel: +44 (0)20 7523 8000 |
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Simon Bridges / Andrew Potts |
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