£53.3m market cap

180p last close

SCISYS Group provides a range of professional services in support of the planning, development and use of computer systems in the space, media/broadcast and defence sectors, as well as to other public and private sector enterprises.

Investment summary

SCISYS released a confident trading update and we maintain our forecasts. Cash flow was healthy, with net debt of £3.1m slightly better than the £3.7m we expected. The order book (c £100m at end-FY18) has been bolstered by c £23m of contract wins since mid-December, of which c £8m were after the period end. Both the Space and ESD divisions saw a significant expansion in headcount to meet demand. The move to redomicile to an EU country (Ireland) before the final Brexit deal is already paying off, as c £18m of this business was only winnable if the group parent company was based in an EU country, due to Brexit. With Space and ESD showing solid organic growth, and the full benefits from the M&B/Annova merger yet to flow, we believe the stock is attractive on c 14x our FY19e EPS.

Y/E Dec
Revenue (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2016A 45.7 4.0 3.0 9.2 19.6 15.2
2017A 57.2 5.6 3.8 10.0 18.0 5.1
2018E 56.0 6.2 4.4 12.0 15.0 8.7
2019E 60.1 6.7 5.0 12.7 14.2 8.4
Last updated on 28/01/2019
Industry outlook

SCISYS is a specialist provider of high-value IT solutions, focusing on specialist markets of space, media and broadcast, and defence sectors, along with other public and private sector enterprises. In recent years, weakness across the group’s significant public sector customer base has been offset by strong performances from space and defence. The acquisition of ANNOVA Systems in 2016 added critical mass to the Media & Broadcast activities while extending the previous radio-focused offering into television and online.

Last updated on 28/01/2019
Share price graph
Balance sheet
Forecast net debt (£m) 3.7
Forecast gearing ratio (%) 14
Price performance
Actual (9.6) (10.9) 23.7
Relative* (10.9) (3.6) 30.6
52-week high/low 194.0p/113.5p
*% relative to local index
Key management
Mike Love Chairman
Klaus Heidrich CEO
Chris Cheetham FD

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