Tech company eyes acquisitions amid expected revenue drop | Northwest Business News

Adam Binks

SysGroup, headquartered in Liverpool, is expected to show declining revenue but expects to grow both organically and through acquisitions.

In a business update for the period ended March 31, 2022, he said the expected decline in revenue comes as customers continue to defer spending on improved IT projects.

The company is a provider of managed IT, cybersecurity and cloud hosting services.

However, despite external challenges in its industry over the past two years, the company expects to report adjusted EBITDA of £2.8m for the period. He said this was “in line with market expectations”.

The company said the adjusted EBITDA performance reflects the “underlying strength” of its business with strong operational management and full-year earnings from acquisition synergies. It added that this was further supported by the quality of its managed services revenue and its sustainable margins.

Adam Binks, Managing Director, said: “This is a very solid performance considering the headwinds experienced over an extended period. Our business has proven resilient, which reflects both the quality of our offering and the essential nature of the services we provide.

“The strong EBITDA performance and cash generation demonstrate the group’s operational strength and financial discipline and the investments from previous periods mean that we are ready to evolve as conditions improve. We will do so at the both organically and through further profit-enhancing mergers and acquisitions, as evidenced by the acquisition of Truststream Security Solutions after year-end.”

Looking ahead, he added: “We have started to see the first green shoots of customer spending recovery and look to the future with confidence.”

Earlier this month, SysGroup acquired Edinburgh-based managed cybersecurity services provider Trustream in a deal worth up to £8.5m.

He picked up the business for an initial cash consideration of £4.8 million with a maximum consideration of £3.075 million over a 24 month period.

The acquisition was financed from the group’s existing cash resources, backed by an £8m revolving credit facility provided by Santander.

Advisors for the deal were not disclosed.