System1 reduces overheads to fight profit fall

In its statement it said by introducing new products and reducing its cost base it had reduced overhead costs over the whole year by 2%.

This followed an 8% increase in overhead costs in the first half of the year.

The decline in overhead costs was partly a result of a fall in share based payments – following the sharp fall in its share price over the past 12 months – from £0.7m last year to approximately £0.1m this year. Employee bonuses had also been reduced from £2.3m last year to less than £0.1m this year, and staff numbers have fallen in the second half of the year. 

In turn, System1 now expects pre-tax profits to be between £1.6m and £2.0m for the year.

Shareholders received £4.2m in dividends during 2017/18 and it reports a net cash balance of £5.7m for the year, compared with £8.3m the previous year.

Its audited financial results will be released on 1 June 2018.