SCISYS Group

LN: SSY

£63.1m market cap

213p 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 reported strong performance in FY18, led by the UK-focused Enterprise Solutions and Defence (ESD) division, which benefited from a reinvigorated sales team. We expect the Space division to lead growth in FY19, following the recent spate of contract wins, while the enlarged Media Solutions division has excellent potential for margin recovery. We upgraded our revenue forecasts but maintained profits as the group needs to invest in its infrastructure to sustain growth. Noting management’s new goal to achieve revenue of £75m and operating profit of £7.0m by end FY22, we believe the stock is attractive on c 14x our FY20e EPS.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 53.2 5.4 3.6 9.3 22.9 6.0
2018A 58.4 6.5 4.6 13.1 16.3 11.1
2019E 61.5 6.7 5.0 12.7 16.8 9.9
2020E 63.5 7.0 5.4 13.4 15.9 9.5
Last updated on 17/05/2019
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 17/05/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (£m) 0.3
Forecast gearing ratio (%) 1
Price performance
%
1m
3m
12m
Actual 10.4 20.7 24.2
Relative* 12.2 18.6 32.0
52-week high/low 213.0p/140.5p
*% relative to local index
Key management
Mike Love Chairman
Klaus Heidrich CEO
Chris Cheetham FD

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