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SysGroup backing artificial intelligence
Firm shares FY numbers and indicates it is committed to investing in artificial intelligence to position itself as an expert provider to the SME community
The narrative emerging from managed service player SysGroup in the past 18 months has been one of developing the business and improving financial fortunes.
The past year has seen the business go through some senior management changes, including the arrival of Heejae Chae as executive chair and Paul Edwards as non-executive director. The business has also been making sure it’s in a position to be a major provider of artificial intelligence (AI) and digital support for small and medium-sized enterprises (SMEs).
For the year ended 31 March, the channel player reported a 5% increase in revenues to £22.7m from £21.6m, which was bolstered by a growth in security sales in the second half. Recurring revenues, as a percentage of the total, was also up to 76%.
Pre-tax losses of £6.6m, up from last year’s £0.3m, were largely explained by £1.8m in exceptional costs, including upgrading its leadership team, which saw the replacement of 11 senior leaders, including CEO and chief financial officer, with six fresh faces. There was also a £3.7m impairment of historic acquisitions as part of the implementation of the firm’s fresh strategy.
That strategy has seen SysGroup position itself as an AI and digital specialist targeting the AI market, with the business recruiting an AI team, rebuilding the go-to-market organisation and refreshing its board with expertise to support its ambitions.
Heejae Chae, executive chairman at SysGroup, has been overseeing a lot of that strategy, making his own investment in the business.
“Over the past year, the group has completely transformed its strategy, execution and leadership,” he said. “Since acquiring a 14% share and becoming the executive chairman, we have repositioned the company as the preferred technology partner for small and medium businesses in their AI and digital transformation efforts. AI will have a significant impact on businesses and represents a key opportunity for transformation. Our goal is to guide SMBs through the complex AI value chain and support their transformation journey from start to finish.”
Equity raise
The fiscal year also saw the business raise £11.2m through an equity raise to gain funds to improve its position, with investments going into R&D with access to facilities in eastern Europe and India.
The firm is also backing AI to a significant extent, with Chae outlining steps it has taken internally to be able to demonstrate the positive impact the technology can have on a business.
“In order to showcase the impact of AI transformation, we are implementing 31 use cases internally to transform SysGroup to demonstrate the benefits of AI,” he said. “This will allow us to serve as a live case study of best practices for our customers and achieve significant productivity gains.”
Chae also indicated that some of those funds could be used in M&A activity to provide more muscle for the business. “We are actively seeking complementary acquisitions to expand our technical capabilities and customer base,” he said.
The fiscal year also saw the firm achieve AWS Select Tier Service Partner status (Level 2), and since March, it has been able to gain Advanced Tier Service Partner status (Level 3), too. SysGroup also recently became one of only two UK Zscaler Managed Security Service Partners.
Chae said the business was in a good position looking forward, and backing technologies that would deliver future growth.
“I am very excited about the company’s potential and future prospects,” he said. “AI will be the transformational technology of our generation, and will continue to gather momentum as the technology improves and benefits are crystallised. As with any innovation, its adoption will not be a straight line and will follow a J-curve. Our mission is to inform and support British SMBs, which account for 99.2% of the total business population, in this journey.”
