Buoyant SCISYS says it has ‘mitigated Brexit risks’ with parent company move to Ireland

January 25, 2019
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A flurry of new business won by its space division in December gave specialist IT and software group SCISYS a better-than-expected end to 2018, it said in a trading update today.

The Chippenham-headquartered group landed a series of contract wins with an aggregate value of £23m during the month. That bolstered its order book and also means that its results for 2018 will “comfortably meet current market guidance in respect of revenues and adjusted operating profit”, it said. 

SCISYS, which provides complex IT systems to the space, media & broadcast, government, defence and commerce sectors, relocated its parent company to Dublin last year to ensure it was eligible to bid for EU-funded space-related work.

The move appears to have paid off – despite the costs linked to it, the group said today.

Its trading update said its closing 2018 order book was in the region of £100m against £91.3m at the end of 2017, while its year-end net debt reduced to £3.1m from £5.9m.

It said this was despite the “substantial exceptional cash costs” of its Brexit contingency plans and payment of a final earnout settlement relating to its December 2016 acquisition of German media group Annova.

Its update said: “We continue to see solid organic growth across the group, notably in our Space and Enterprise Solutions & Defence (ESD) divisions; both saw a significant expansion in the size of their respective teams to meet demand.

“Since the re-location of the group’s parent company to Ireland at the end of November, the directors have been pleased to announce a succession of strategic orders for the Space division, including key contract wins for the EU-funded Galileo satellite navigation programme.  

“ESD’s order book was further underpinned by a significant defence sector contract win in December 2018.

“Accordingly, the directors believe that they have mitigated Brexit risks particularly affecting the group and are on a good footing to navigate Brexit going forward.”

It said intra-group currency hedging arrangements would continue to mitigate exchange-rate risks. 

Annova was re-named SCISYS Media Solutions GmbH in December and a formal merger is planned with SCISYS’ Media & Broadcast division this year – ahead of previously anticipated timescales.

SCISYS chairman Mike Love said: “We remain optimistic and confident for the Group’s prospects going forward, given in particular the strength of its order book and end of year net debt position. SCISYS is well positioned to deal with Brexit and other challenges faced by the business community in 2019.” 

SCISYS employs around 600 staff across its offices in Chippenham, Bristol, Leicester and Reading and in Germany.

 

It expects to report its preliminary results for the year ended December 31 on March 28.

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